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ART 68-71: Rights and Obligations between Husband and Wife

ILUSORIO VS BILDNER
PARDO, J.:
May a wife secure a writ of habeas corpus to compel her husband to live with her in conjugal bliss? The answer is no.
Marital rights including coverture and living in conjugal dwelling may not be enforced by the extra-ordinary writ of habeas
corpus.
A writ of habeas corpus extends to all cases of illegal confinement or detention, or by which the rightful custody of a
person is withheld from the one entitled thereto. Slx
"Habeas corpus is a writ directed to the person detaining another, commanding him to produce the body of the prisoner at
a designated time and place, with the day and cause of his capture and detention, to do, submit to, and receive
whatsoever the court or judge awarding the writ shall consider in that behalf."
It is a high prerogative, common-law writ, of ancient origin, the great object of which is the liberation of those who may be
imprisoned without sufficient cause. It is issued when one is deprived of liberty or is wrongfully prevented from exercising
legal custody over another person.
The petition of Erlinda K. Ilusorio is to reverse the decision of the Court of Appeals and its resolution dismissing the
application for habeas corpus to have the custody of her husband, lawyer Potenciano Ilusorio and enforce consortium as
the wife.
On the other hand, the petition of Potenciano Ilusorio is to annul that portion of the decision of the Court of Appeals giving
Erlinda K. Ilusorio visitation rights to her husband and to enjoin Erlinda and the Court of Appeals from enforcing the
visitation rights.
The undisputed facts are as follows: Scslx
Erlinda Kalaw Ilusorio is the wife of lawyer Potenciano Ilusorio.
Potenciano Ilusorio is about 86 years of age possessed of extensive property valued at millions of pesos. For many years,
lawyer Potenciano Ilusorio was Chairman of the Board and President of Baguio Country Club.
On July 11, 1942, Erlinda Kalaw and Potenciano Ilusorio contracted matrimony and lived together for a period of thirty (30)
years. In 1972, they separated from bed and board for undisclosed reasons. Potenciano lived at Urdaneta Condominium,
Ayala Ave., Makati City when he was in Manila and at Ilusorio Penthouse, Baguio Country Club when he was in Baguio
City. On the other hand, Erlinda lived in Antipolo City.
Out of their marriage, the spouses had six (6) children, namely: Ramon Ilusorio (age 55); Erlinda Ilusorio Bildner (age 52);
Maximo (age 50); Sylvia (age 49); Marietta (age 48); and Shereen (age 39).
On December 30, 1997, upon Potencianos arrival from the United States, he stayed with Erlinda for about five (5) months
in Antipolo City. The children, Sylvia and Erlinda (Lin), alleged that during this time, their mother gave Potenciano an
overdose of 200 mg instead of 100 mg Zoloft, an antidepressant drug prescribed by his doctor in New York, U.S.A. As a
consequence, Potencianos health deteriorated.
On February 25, 1998, Erlinda filed with the Regional Trial Court, Antipolo City a petition for guardianship over the person
and property of Potenciano Ilusorio due to the latters advanced age, frail health, poor eyesight and impaired judgment.
On May 31, 1998, after attending a corporate meeting in Baguio City, Potenciano Ilusorio did not return to Antipolo City
and instead lived at Cleveland Condominium, Makati. Slxsc
On March 11, 1999, Erlinda filed with the Court of Appeals a petition for habeas corpus to have the custody of lawyer
Potenciano Ilusorio. She alleged that respondents refused petitioners demands to see and visit her husband and
prohibited Potenciano from returning to Antipolo City.
After due hearing, on April 5, 1999, the Court of Appeals rendered decision the dispositive portion of which reads:
"WHEREFORE, in the light of the foregoing disquisitions, judgment is hereby rendered:
"(1) Ordering, for humanitarian consideration and upon petitioners manifestation, respondents Erlinda K.
Ilusorio Bildner and Sylvia Ilusorio-Yap, the administrator of Cleveland Condominium or anywhere in its
place, his guards and Potenciano Ilusorios staff especially Ms. Aurora Montemayor to allow visitation
rights to Potenciano Ilusorios wife, Erlinda Ilusorio and all her children, notwithstanding any list limiting
visitors thereof, under penalty of contempt in case of violation of refusal thereof; xxx
"(2) ORDERING that the writ of habeas corpus previously issued be recalled and the herein petition for
habeas corpus be DENIED DUE COURSE, as it is hereby DISMISSED for lack of unlawful restraint or
detention of the subject of the petition.
"SO ORDERED."
Hence, the two petitions, which were consolidated and are herein jointly decided.

As heretofore stated, a writ of habeas corpus extends to all cases of illegal confinement or detention, or by which the
rightful custody of a person is withheld from the one entitled thereto. It is available where a person continues to be
unlawfully denied of one or more of his constitutional freedoms, where there is denial of due process, where the restraints
are not merely involuntary but are unnecessary, and where a deprivation of freedom originally valid has later become
arbitrary. It is devised as a speedy and effectual remedy to relieve persons from unlawful restraint, as the best and only
sufficient defense of personal freedom. Jksm
The essential object and purpose of the writ of habeas corpus is to inquire into all manner of involuntary restraint, and to
relieve a person therefrom if such restraint is illegal.
To justify the grant of the petition, the restraint of liberty must be an illegal and involuntary deprivation of freedom of
action. The illegal restraint of liberty must be actual and effective, not merely nominal or moral.
The evidence shows that there was no actual and effective detention or deprivation of lawyer Potenciano Ilusorios liberty
that would justify the issuance of the writ. The fact that lawyer Potenciano Ilusorio is about 86 years of age, or under
medication does not necessarily render him mentally incapacitated. Soundness of mind does not hinge on age or medical
condition but on the capacity of the individual to discern his actions.
After due hearing, the Court of Appeals concluded that there was no unlawful restraint on his liberty.
The Court of Appeals also observed that lawyer Potenciano Ilusorio did not request the administrator of the Cleveland
Condominium not to allow his wife and other children from seeing or visiting him. He made it clear that he did not object to
seeing them.
As to lawyer Potenciano Ilusorios mental state, the Court of Appeals observed that he was of sound and alert mind,
having answered all the relevant questions to the satisfaction of the court.
Being of sound mind, he is thus possessed with the capacity to make choices. In this case, the crucial choices revolve on
his residence and the people he opts to see or live with. The choices he made may not appeal to some of his family
members but these are choices which exclusively belong to Potenciano. He made it clear before the Court of Appeals that
he was not prevented from leaving his house or seeing people. With that declaration, and absent any true restraint on his
liberty, we have no reason to reverse the findings of the Court of Appeals.
With his full mental capacity coupled with the right of choice, Potenciano Ilusorio may not be the subject of visitation rights
against his free choice. Otherwise, we will deprive him of his right to privacy. Needless to say, this will run against his
fundamental constitutional right. Es m
The Court of Appeals exceeded its authority when it awarded visitation rights in a petition for habeas corpus where Erlinda
never even prayed for such right. The ruling is not consistent with the finding of subjects sanity.
When the court ordered the grant of visitation rights, it also emphasized that the same shall be enforced under penalty of
contempt in case of violation or refusal to comply. Such assertion of raw, naked power is unnecessary.
The Court of Appeals missed the fact that the case did not involve the right of a parent to visit a minor child but the right of
a wife to visit a husband. In case the husband refuses to see his wife for private reasons, he is at liberty to do so without
threat of any penalty attached to the exercise of his right.
No court is empowered as a judicial authority to compel a husband to live with his wife. Coverture cannot be enforced by
compulsion of a writ ofhabeas corpus carried out by sheriffs or by any other mesne process. That is a matter beyond
judicial authority and is best left to the man and womans free choice.
WHEREFORE, in G. R. No. 139789, the Court DISMISSES the petition for lack of merit. No costs.
In G. R. No. 139808, the Court GRANTS the petition and nullifies the decision of the Court of Appeals insofar as it gives
visitation rights to respondent Erlinda K. Ilusorio. No costs.
SO ORDERED.
ART 87: Donation between Spouses during the Marriage
ARCABA VS TABANCURA
MENDOZA, J.:
Petitioner Cirila Arcaba seeks review on certiorari of the decision of the Court of Appeals, which affirmed with
modification the decision of the Regional Trial Court, Branch 10, Dipolog City, Zamboanga del Norte in Civil Case No.
4593, declaring as void a deed of donation inter vivos (A contract which takes place by the mutual consent, of the giver,
who divests himself of the thing given in order to transmit the title of it to the donee gratuitously, and the donee, who
accepts the thing and acquires a legal title to it) executed by the late Francisco T. Comille in her favor and its subsequent
resolution denying reconsideration.
The facts are as follows:

On January 16, 1956, Francisco Comille and his wife Zosima Montallana became the registered owners of Lot No.
437-A located at the corner of Calle Santa Rosa (now Balintawak Street) and Calle Rosario (now Rizal Avenue) in Dipolog
City, Zamboanga del Norte. The total area of the lot was 418 square meters.After the death of Zosima on October 3,
1980, Francisco and his mother-in-law, Juliana Bustalino Montallana, executed a deed of extrajudicial partition with waiver
of rights, in which the latter waived her share consisting of one-fourth (/ 4) of the property to Francisco. On June 27, 1916,
Francisco registered the lot in his name with the Registry of Deeds.
Having no children to take care of him after his retirement, Francisco asked his niece Leticia Bellosillo, the latters
cousin, Luzviminda Paghacian, and petitioner Cirila Arcaba, then a widow, to take care of his house, as well as the store
inside.
Conflicting testimonies were offered as to the nature of the relationship between Cirila and Francisco. Leticia
Bellosillo said Francisco and Cirila were lovers since they slept in the same room, while Erlinda Tabancura, another niece
of Francisco, claimed that the latter had told her that Cirila was his mistress. On the other hand, Cirila said she was a
mere helper who could enter the masters bedroom only when the old man asked her to and that Francisco in any case
was too old for her. She denied they ever had sexual intercourse.
It appears that when Leticia and Luzviminda were married, only Cirila was left to take care of Francisco. Cirila
testified that she was a 34-year old widow while Francisco was a 75-year old widower when she began working for the
latter; that he could still walk with her assistance at that time; and that his health eventually deteriorated and he became
bedridden. Erlinda Tabancura testified that Franciscos sole source of income consisted of rentals from his lot near the
public streets. He did not pay Cirila a regular cash wage as a househelper, though he provided her family with food and
lodging.
On January 24, 1991, a few months before his death, Francisco executed an instrument denominated Deed of
Donation Inter Vivos, in which he ceded a portion of Lot 437-A, consisting of 150 square meters, together with his house,
to Cirila, who accepted the donation in the same instrument. Francisco left the larger portion of 268 square meters in his
name. The deed stated that the donation was being made in consideration of the faithful services [Cirila Arcaba] had
rendered over the past ten (10) years. The deed was notarized by Atty. Vic T. Lacaya, Sr. and later registered by Cirila as
its absolute owner.
On October 4, 1991, Francisco died without any children. In 1993, the lot which Cirila received from Francisco had a
market value of P57,105.00 and an assessed value of P28,550.00.
On February 18, 1993, respondents filed a complaint against petitioner for declaration of nullity of a deed of
donation inter vivos, recovery of possession, and damages. Respondents, who are the decedents nephews and nieces
and his heirs by intestate succession, alleged that Cirila was the common-law wife of Francisco and the donation inter
vivos made by Francisco in her favor is void under Article 87 of the Family Code, which provides:
Every donation or grant of gratuitous advantage, direct or indirect, between the spouses during the marriage shall
be void, except moderate gifts which the spouses may give each other on the occasion of any family rejoicing. The
prohibition shall also apply to persons living together as husband and wife without a valid marriage.
On February 25, 1999, the trial court rendered judgment in favor of respondents, holding the donation void under this
provision of the Family Code. The trial court reached this conclusion based on the testimony of Erlinda Tabancura and
certain documents bearing the signature of one Cirila Comille. The documents were (1) an application for a business
permit to operate as real estate lessor, dated January 8, 1991, with a carbon copy of the signature Cirila Comille; (2) a
sanitary permit to operate as real estate lessor with a health certificate showing the signature Cirila Comille in black
ink; and (3) the death certificate of the decedent with the signature Cirila A. Comille written in black ink. The dispositive
portion of the trial courts decision states:
WHEREFORE, in view of the foregoing, judgment is rendered:
1. Declaring the Deed of Donation Inter Vivos executed by the late Francisco Comille recorded as Doc. No. 7; Page No. 3;
Book No. V; Series of 1991 in the Notarial Register of Notary Public Vic T. Lacaya (Annex A to the Complaint) null and
void;
2. Ordering the defendant to deliver possession of the house and lot subject of the deed unto the plaintiffs within thirty (30)
days after finality of this decision; and finally
3. Ordering the defendant to pay attorneys fees in the sum of P10,000.00.
SO ORDERED.
Petitioner appealed to the Court of Appeals, which rendered on June 19, 2000 the decision subject of this appeal. As
already stated, the appeals court denied reconsideration. Its conclusion was based on (1) the testimonies of Leticia,
Erlinda, and Cirila; (2) the copies of documents purportedly showing Cirilas use of Franciscos surname; (3) a pleading in
another civil case mentioning payment of rentals to Cirila as Franciscos common-law wife; and (4) the fact that Cirila did
not receive a regular cash wage.

Petitioner assigns the following errors as having been committed by the Court of Appeals:
(a) The judgment of the Court of Appeals that petitioner was the common-law wife of the late Francisco Comille is not
correct and is a reversible error because it is based on a misapprehension of facts, and unduly breaks the chain of
circumstances detailed by the totality of the evidence, its findings being predicated on totally incompetent or hearsay
evidence, and grounded on mere speculation, conjecture or possibility. (Salazar v. Gutierrez, 33 SCRA 243 and other
cases; cited in Quiason, Philippine Courts and their Jurisdictions, 1993 ed., p. 604)
(b) The Court of Appeals erred in shifting the burden of evidence from the plaintiff to defendant. (Bunyi v. Reyes, 39
SCRA 504; Quiason, id.)
(c) The Court of Appeals decided the case in a way probably not in accord with law or with the applicable jurisprudence in
Rodriguez v. Rodriguez, 20 SCRA 908, and Liguez v. CA, 102 Phil. 577, 584.
The issue in this case is whether the Court of Appeals correctly applied Art. 87 of the Family Code to the
circumstances of this case. After a review of the records, we rule in the affirmative.
The general rule is that only questions of law may be raised in a petition for review under Rule 45 of the Rules of
Court, subject only to certain exceptions: (a) when the conclusion is a finding grounded entirely on speculations, surmises,
or conjectures; (b) when the inference made is manifestly mistaken, absurd, or impossible; (c) where there is grave abuse
of discretion; (d) when the judgment is based on a misapprehension of facts; (e) when the findings of fact are conflicting;
(f) when the Court of Appeals, in making its findings, went beyond the issues of the case and the same are contrary to the
admissions of both appellant and appellee; (g) when the findings of the Court of Appeals are contrary to those of the trial
court; (h) when the findings of fact are conclusions without citation of specific evidence on which they are based; (i) when
the finding of fact of the Court of Appeals is premised on the supposed absence of evidence but is contradicted by the
evidence on record; and (j) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the
parties and which, if properly considered, would justify a different conclusion. It appearing that the Court of Appeals based
its findings on evidence presented by both parties, the general rule should apply.
In Bitangcor v. Tan, we held that the term cohabitation or living together as husband and wife means not only
residing under one roof, but also having repeated sexual intercourse. Cohabitation, of course, means more than sexual
intercourse, especially when one of the parties is already old and may no longer be interested in sex. At the very least,
cohabitation is the public assumption by a man and a woman of the marital relation, and dwelling together as man and
wife, thereby holding themselves out to the public as such. Secret meetings or nights clandestinely spent together, even if
often repeated, do not constitute such kind of cohabitation; they are merely meretricious. In this jurisdiction, this Court has
considered as sufficient proof of common-law relationship the stipulations between the parties, a conviction of
concubinage, or the existence of illegitimate children.
Was Cirila Franciscos employee or his common-law wife? Cirila admitted that she and Francisco resided under one
roof for a long time. It is very possible that the two consummated their relationship, since Cirila gave Francisco
therapeutic massage and Leticia said they slept in the same bedroom. At the very least, their public conduct indicated
that theirs was not just a relationship of caregiver and patient, but that of exclusive partners akin to husband and wife.
Aside from Erlinda Tabancuras testimony that her uncle told her that Cirila was his mistress, there are other
indications that Cirila and Francisco were common-law spouses. Seigfredo Tabancura presented documents apparently
signed by Cirila using the surname Comille. As previously stated, these are an application for a business permit to
operate as a real estate lessor, a sanitary permit to operate as real estate lessor with a health certificate, and the death
certificate of Francisco. These documents show that Cirila saw herself as Franciscos common-law wife, otherwise, she
would not have used his last name. Similarly, in the answer filed by Franciscos lessees (renter) in Erlinda Tabancura, et
al. vs. Gracia Adriatico Sy and Antonio Sy, RTC Civil Case No. 4719 (for collection of rentals), these lessees referred to
Cirila as the common-law spouse of Francisco. Finally, the fact that Cirila did not demand from Francisco a regular cash
wage is an indication that she was not simply a caregiver-employee, but Franciscos common law spouse. She was, after
all, entitled to a regular cash wage under the law. It is difficult to believe that she stayed with Francisco and served him out
of pure beneficence. Human reason would thus lead to the conclusion that she was Franciscos common-law spouse.
Respondents having proven by a preponderance of evidence that Cirila and Francisco lived together as husband and
wife without a valid marriage, the inescapable conclusion is that the donation made by Francisco in favor of Cirila is void
under Art. 87 of the Family Code.
WHEREFORE, the decision of the Court of Appeals affirming the decision of the trial court is hereby AFFIRMED.
SO ORDERED.

ART 105-133: Conjugal Partnership of Gains


A. Concept

G.R. No. 156125


August 25, 2010
FRANCISCO MUOZ, JR., Petitioner,
vs.
ERLINDA RAMIREZ and ELISEO CARLOS, Respondents.
DECISION
BRION, J.:
We resolve the present petition for review on certiorari filed by petitioner Francisco Muoz, Jr. (petitioner) to challenge the
decision and the resolution of the Court of Appeals (CA) in CA-G.R. CV No. 57126. The CA decision set aside the
decision of the Regional Trial Court (RTC), Branch 166, Pasig City, in Civil Case No. 63665. The CA resolution denied the
petitioners subsequent motion for reconsideration.
FACTUAL BACKGROUND
The facts of the case, gathered from the records, are briefly summarized below.
Subject of the present case is a seventy-seven (77)-square meter residential house and lot located at 170 A. Bonifacio
Street, Mandaluyong City (subject property), covered by Transfer Certificate of Title (TCT) No. 7650 of the Registry of
Deeds of Mandaluyong City in the name of the petitioner.
The residential lot in the subject property was previously covered by TCT No. 1427, in the name of Erlinda Ramirez,
married to Eliseo Carlos (respondents).
On April 6, 1989, Eliseo, a Bureau of Internal Revenue employee, mortgaged TCT No. 1427, with Erlindas consent, to the
Government Service Insurance System (GSIS) to secure a P136,500.00 housing loan, payable within twenty (20) years,
through monthly salary deductions of P1,687.66. The respondents then constructed a thirty-six (36)-square meter, twostory residential house on the lot.
On July 14, 1993, the title to the subject property was transferred to the petitioner by virtue of a Deed of Absolute Sale,
dated April 30, 1992, executed by Erlinda, for herself and as attorney-in-fact of Eliseo, for a stated consideration
of P602,000.00.
On September 24, 1993, the respondents filed a complaint with the RTC for the nullification of the deed of absolute sale,
claiming that there was no sale but only a mortgage transaction, and the documents transferring the title to the petitioners
name were falsified.
The respondents alleged that in April 1992, the petitioner granted them a P600,000.00 loan, to be secured by a first
mortgage on TCT No. 1427; the petitioner gave Erlinda a P200,000.00 advance to cancel the GSIS mortgage, and made
her sign a document purporting to be the mortgage contract; the petitioner promised to give theP402,000.00 balance
when Erlinda surrenders TCT No. 1427 with the GSIS mortgage cancelled, and submits an affidavit signed by Eliseo
stating that he waives all his rights to the subject property; with the P200,000.00 advance, Erlinda paid
GSIS P176,445.27 to cancel the GSIS mortgage on TCT No. 1427; in May 1992, Erlinda surrendered to the petitioner the
clean TCT No. 1427, but returned Eliseos affidavit, unsigned; since Eliseos affidavit was unsigned, the petitioner refused
to give the P402,000.00 balance and to cancel the mortgage, and demanded that Erlinda return the P200,000.00
advance; since Erlinda could not return the P200,000.00 advance because it had been used to pay the GSIS loan, the
petitioner kept the title; and in 1993, they discovered that TCT No. 7650 had been issued in the petitioners name,
cancelling TCT No.1427 in their name.
The petitioner countered that there was a valid contract of sale. He alleged that the respondents sold the subject property
to him after he refused their offer to mortgage the subject property because they lacked paying capacity and were
unwilling to pay the incidental charges; the sale was with the implied promise to repurchase within one year, during which
period (from May 1, 1992 to April 30, 1993), the respondents would lease the subject property for a monthly rental
of P500.00; when the respondents failed to repurchase the subject property within the one-year period despite notice, he
caused the transfer of title in his name on July 14, 1993; when the respondents failed to pay the monthly rentals despite
demand, he filed an ejectment case against them with the Metropolitan Trial Court (MeTC), Branch 60, Mandaluyong City,
on September 8, 1993, or sixteen days before the filing of the RTC case for annulment of the deed of absolute sale.
During the pendency of the RTC case, or on March 29, 1995, the MeTC decided the ejectment case. It ordered Erlinda
and her family to vacate the subject property, to surrender its possession to the petitioner, and to pay the overdue rentals.
In the RTC, the respondents presented the results of the scientific examination conducted by the National Bureau of
Investigation of Eliseos purported signatures in the Special Power of Attorney dated April 29, 1992 and the Affidavit of
waiver of rights dated April 29, 1992, showing that they were forgeries.
The petitioner, on the other hand, introduced evidence on the paraphernal nature of the subject property since it was
registered in Erlindas name; the residential lot was part of a large parcel of land owned by Pedro Ramirez and Fructuosa
Urcla, Erlindas parents; it was the subject of Civil Case No. 50141, a complaint for annulment of sale, before the RTC,
Branch 158, Pasig City, filed by the surviving heirs of Pedro against another heir, Amado Ramirez, Erlindas brother; and,
as a result of a compromise agreement, Amado agreed to transfer to the other compulsory heirs of Pedro, including
Erlinda, their rightful shares of the land.
THE RTC RULING

In a Decision dated January 23, 1997, the RTC dismissed the complaint. It found that the subject property was Erlindas
exclusive paraphernal property that was inherited from her father. It also upheld the sale to the petitioner, even without
Eliseos consent as the deed of absolute sale bore the genuine signatures of Erlinda and the petitioner as vendor and
vendee, respectively. It concluded that the NBI finding that Eliseos signatures in the special power of attorney and in the
affidavit were forgeries was immaterial because Eliseos consent to the sale was not necessary.
The respondents elevated the case to the CA via an ordinary appeal under Rule 41 of the Revised Rules of Court.
THE CA RULING
The CA decided the appeal on June 25, 2002. Applying the second paragraph of Article 158 of the Civil Code and
Calimlim-Canullas v. Hon. Fortun, the CA held that the subject property, originally Erlindas exclusive paraphernal property,
became conjugal property when it was used as collateral for a housing loan that was paid through conjugal funds
Eliseos monthly salary deductions; the subject property, therefore, cannot be validly sold or mortgaged without Eliseos
consent, pursuant to Article 124 of the Family Code. Thus, the CA declared void the deed of absolute sale, and set aside
the RTC decision.
When the CA denied the subsequent motion for reconsideration, the petitioner filed the present petition for review on
certiorari under Rule 45 of the Revised Rules of Court.
THE PETITION
The petitioner argues that the CA misapplied the second paragraph of Article 158 of the Civil Code and CalimlimCanullas because the respondents admitted in the complaint that it was the petitioner who gave the money used to cancel
the GSIS mortgage on TCT No. 1427; Article 120 of the Family Code is the applicable rule, and since the value of the
house is less than the value of the lot, then Erlinda retained ownership of the subject property. He also argues that the
contract between the parties was a sale, not a mortgage, because (a) Erlinda did not deny her signature in the
document; (b) Erlinda agreed to sign a contract of lease over the subject property; and, (c) Erlinda executed a letter, dated
April 30, 1992, confirming the conversion of the loan application to a deed of sale.
THE CASE FOR THE RESPONDENTS
The respondents submit that it is unnecessary to compare the respective values of the house and of the lot to determine
ownership of the subject property; it was acquired during their marriage and, therefore, considered conjugal property.
They also submit that the transaction between the parties was not a sale, but an equitable mortgage because (a) they
remained in possession of the subject property even after the execution of the deed of absolute sale, (b) they paid the
1993 real property taxes due on the subject property, and (c) they receivedP200,000.00 only of the total stated price
of P602,000.00.
THE ISSUE
The issues in the present case boil down to (1) whether the subject property is paraphernal or conjugal; and, (2) whether
the contract between the parties was a sale or an equitable mortgage.
OUR RULING
We deny the present Petition but for reasons other than those advanced by the CA.
This Court is not a trier of facts. However, if the inference, drawn by the CA, from the facts is manifestly mistaken, as in
the present case, we can review the evidence to allow us to arrive at the correct factual conclusions based on the record.
First Issue:
Paraphernal or Conjugal?
As a general rule, all property acquired during the marriage, whether the acquisition appears to have been made,
contracted or registered in the name of one or both spouses, is presumed to be conjugal unless the contrary is proved.
In the present case, clear evidence that Erlinda inherited the residential lot from her father has sufficiently rebutted this
presumption of conjugal ownership.Pursuant to Articles 92 and 109 of the Family Code, properties acquired by gratuitous
title by either spouse, during the marriage, shall be excluded from the community property and be the exclusive property
of each spouse. The residential lot, therefore, is Erlindas exclusive paraphernal property.
The CA, however, held that the residential lot became conjugal when the house was built thereon through conjugal funds,
applying the second paragraph of Article 158 of the Civil Code and Calimlim-Canullas. Under the second paragraph of
Article 158 of the Civil Code, a land that originally belonged to one spouse becomes conjugal upon the construction of
improvements thereon at the expense of the partnership. We applied this provision in Calimlim-Canullas, where we held
that when the conjugal house is constructed on land belonging exclusively to the husband, the land ipso facto becomes
conjugal, but the husband is entitled to reimbursement of the value of the land at the liquidation of the conjugal
partnership.
The CA misapplied Article 158 of the
Civil Code and Calimlim-Canullas
We cannot subscribe to the CAs misplaced reliance on Article 158 of the Civil Code and Calimlim-Canullas.
As the respondents were married during the effectivity of the Civil Code, its provisions on conjugal partnership of gains
(Articles 142 to 189) should have governed their property relations. However, with the enactment of the Family Code on

August 3, 1989, the Civil Code provisions on conjugal partnership of gains, including Article 158, have been superseded
by those found in the Family Code (Articles 105 to 133). Article 105 of the Family Code states:
xxxx
The provisions of this Chapter [on the Conjugal Partnership of Gains] shall also apply to conjugal partnerships of gains
already established between spouses before the effectivity of this Code, without prejudice to vested rights already
acquired in accordance with the Civil Code or other laws, as provided in Article 256.
Thus, in determining the nature of the subject property, we refer to the provisions of the Family Code, and not the Civil
Code, except with respect to rights then already vested.
Article 120 of the Family Code, which supersedes Article 158 of the Civil Code, provides the solution in determining the
ownership of the improvements that are made on the separate property of the spouses, at the expense of the partnership
or through the acts or efforts of either or both spouses. Under this provision, when the cost of the improvement and any
resulting increase in value are more than the value of the property at the time of the improvement, the entire property of
one of the spouses shall belong to the conjugal partnership, subject to reimbursement of the value of the property of the
owner-spouse at the time of the improvement; otherwise, said property shall be retained in ownership by the ownerspouse, likewise subject to reimbursement of the cost of the improvement.
In the present case, we find that 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, not the entire amount of the GSIS housing loan plus interest,
since the petitioner advanced the P176,445.27 paid by Erlinda to cancel the mortgage in 1992. Considering
the P136,500.00 amount of the GSIS housing loan, it is fairly reasonable to assume that the value of the residential lot is
considerably more than the P60,755.76 amount paid by Eliseo through monthly salary deductions.
Thus, the subject property remained the exclusive paraphernal property of Erlinda at the time she contracted with the
petitioner; the written consent of Eliseo to the transaction was not necessary. The NBI finding that Eliseos signatures in
the special power of attorney and affidavit were forgeries was immaterial.
Nonetheless, the RTC and the CA apparently failed to consider the real nature of the contract between the parties.
Second Issue:
Sale or Equitable Mortgage?
Jurisprudence has defined an equitable mortgage "as one which although lacking in some formality, or form or words, or
other requisites demanded by a statute, nevertheless reveals the intention of the parties to charge real property as
security for a debt, there being no impossibility nor anything contrary to law in this intent."
Article 1602 of the Civil Code enumerates the instances when a contract, regardless of its nomenclature, may be
presumed to be an equitable mortgage: (a) when the price of a sale with right to repurchase is unusually inadequate;
(b) when the vendor remains in possession as lessee or otherwise; (c) when upon or after the expiration of the right
to repurchase another instrument extending the period of redemption or granting a new period is executed; (d) when the
purchaser retains for himself a part of the purchase price; (e) when the vendor binds himself to pay the taxes on
the thing sold; and, (f) in any other case where it may be fairly inferred that the real intention of the parties is that
the transaction shall secure the payment of a debt or the performance of any other obligation. These instances
apply to a contract purporting to be an absolute sale.
For the presumption of an equitable mortgage to arise under Article 1602 of the Civil Code, two (2) requisites must concur:
(a) that the parties entered into a contract denominated as a contract of sale; and, (b) that their intention was to secure an
existing debt by way of a mortgage. Any of the circumstances laid out in Article 1602 of the Civil Code, not the
concurrence nor an overwhelming number of the enumerated circumstances, is sufficient to support the conclusion that a
contract of sale is in fact an equitable mortgage.
Contract is an equitable mortgage
In the present case, there are four (4) telling circumstances pointing to the existence of an equitable mortgage.
First, the respondents remained in possession as lessees of the subject property; the parties, in fact, executed a one-year
contract of lease, effective May 1, 1992 to April 30, 1993.
Second, the petitioner retained part of the "purchase price," the petitioner gave a P200,000.00 advance to settle the GSIS
housing loan, but refused to give the P402,000.00 balance when Erlinda failed to submit Eliseos signed affidavit of waiver
of rights.
Third, respondents paid the real property taxes on July 8, 1993, despite the alleged sale on April 30, 1992;payment of real
property taxes is a usual burden attaching to ownership and when, as here, such payment is coupled with continuous
possession of the property, it constitutes evidence of great weight that the person under whose name the realty taxes
were declared has a valid and rightful claim over the land.
Fourth, Erlinda secured the payment of the principal debt owed to the petitioner with the subject property. The records
show that the petitioner, in fact, sent Erlinda a Statement of Account showing that as of February 20, 1993, she
owed P384,660.00, and the daily interest, starting February 21, 1993, was P641.10. Thus, the parties clearly intended an
equitable mortgage and not a contract of sale.

That the petitioner advanced the sum of P200,000.00 to Erlinda is undisputed. This advance, in fact, prompted the latter to
transfer the subject property to the petitioner. Thus, before the respondents can recover the subject property, they must
first return the amount of P200,000.00 to the petitioner, plus legal interest of 12% per annum, computed from April 30,
1992.
We cannot sustain the ballooned obligation of P384,660.00, claimed in the Statement of Account sent by the
petitioner, sans any evidence of how this amount was arrived at. Additionally, a daily interest of P641.10 orP19,233.00 per
month for a P200,000.00 loan is patently unconscionable. While parties are free to stipulate on the interest to be imposed
on monetary obligations, we can step in to temper the interest rates if they are unconscionable.
In Lustan v. CA, where we established the reciprocal obligations of the parties under an equitable mortgage, we ordered
the reconveyance of the property to the rightful owner therein upon the payment of the loan within ninety (90) days from
the finality of the decision.
WHEREFORE, in light of all the foregoing, we hereby DENY the present petition. The assailed decision and resolution of
the Court of Appeals in CA-G.R. CV No. 57126 are AFFIRMED with the following MODIFICATIONS:
1. The Deed of Absolute Sale dated April 30, 1992 is hereby declared an equitable mortgage; and
2. The petitioner is obligated to RECONVEY to the respondents the property covered by Transfer Certificate of
Title No. 7650 of the Register of Deeds of Mandaluyong City, UPON THE PAYMENT OF P200,000.00, with 12%
legal interest from April 30, 1992, by respondents within NINETY DAYS FROM THE FINALITY OF THIS
DECISION.
Costs against the petitioner.
SO ORDERED.

B. Liabilities of the Conjugal Partnership


AYALA INVESTMENTS VS CA
MARTINEZ, J.:
Under Article 161 of the Civil Code, what debts and obligations contracted by the husband alone are considered for
the benefit of the conjugal partnership which are chargeable against the conjugal partnership? Is a surety agreement or
an accommodation contract entered into by the husband in favor of his employer within the contemplation of the said
provision?
These are the issues which we will resolve in this petition for review.
The petitioner assails the decision dated April 14, 1994 of the respondent Court of Appeals in Spouses Alfredo and
Encarnacion Ching vs. Ayala Investment and Development Corporation, et. al., docketed as CA-G.R. CV No.
29632, upholding the decision of the Regional Trial Court of Pasig, Branch 168, which ruled that the conjugal partnership
of gains of respondents-spouses Alfredo and Encarnacion Ching is not liable for the payment of the debts secured by
respondent-husband Alfredo Ching.
A chronology of the essential antecedent facts is necessary for a clear understanding of the case at bar.
Philippine Blooming Mills (hereinafter referred to as PBM) obtained a P50,300,000.00 loan from petitioner Ayala
Investment and Development Corporation (hereinafter referred to as AIDC). As added security for the credit line extended
to PBM, respondent Alfredo Ching, Executive Vice President of PBM, executed security agreements on December 10,
1980 and on March 20, 1981 making himself jointly and severally answerable with PBMs indebtedness to AIDC.
PBM failed to pay the loan. Thus, on July 30, 1981, AIDC filed a case for sum of money against PBM and
respondent-husband Alfredo Ching with the then Court of First Instance of Rizal (Pasig), Branch VIII, entitled Ayala
Investment and Development Corporation vs. Philippine Blooming Mills and Alfredo Ching, docketed as Civil Case No.
42228.
After trial, the court rendered judgment ordering PBM and respondent-husband Alfredo Ching to jointly and severally
pay AIDC the principal amount of P50,300,000.00 with interests.
Pending appeal of the judgment in Civil Case No. 42228, upon motion of AIDC, the lower court issued a writ of
execution pending appeal. Upon AIDCs putting up of an P8,000,000.00 bond, a writ of execution dated May 12, 1982 was
issued. Thereafter, petitioner Abelardo Magsajo, Sr., Deputy Sheriff of Rizal and appointed sheriff in Civil Case No.
42228, caused the issuance and service upon respondents-spouses of a notice of sheriff sale dated May 20, 1982 on
three (3) of their conjugal properties. Petitioner Magsajo then scheduled the auction sale of the properties levied.

On June 9, 1982, private respondents filed a case of injunction against petitioners with the then Court of First
Instance of Rizal (Pasig), Branch XIII, to enjoin the auction sale alleging that petitioners cannot enforce the judgment
against the conjugal partnership levied on the ground that, among others, the subject loan did not redound to the benefit
of the said conjugal partnership. Upon application of private respondents, the lower court issued a temporary restraining
order to prevent petitioner Magsajo from proceeding with the enforcement of the writ of execution and with the sale of the
said properties at public auction.
AIDC filed a petition for certiorari before the Court of Appeals, questioning the order of the lower court enjoining the
sale. Respondent Court of Appeals issued a Temporary Restraining Order on June 25, 1982, enjoining the lower
court from enforcing its Order of June 14, 1982, thus paving the way for the scheduled auction sale of respondentsspouses conjugal properties.
On June 25, 1982, the auction sale took place. AIDC being the only bidder, was issued a Certificate of Sale by
petitioner Magsajo, which was registered on July 2, 1982. Upon expiration of the redemption period, petitioner sheriff
issued the final deed of sale on August 4, 1982 which was registered on August 9, 1983.
In the meantime, the respondent court, on August 4, 1982, decided CA-G.R. SP No. 14404, in this manner:
WHEREFORE, the petition for certiorari in this case is granted and the challenged order of the respondent
Judge dated June 14, 1982 in Civil Case No. 46309 is hereby set aside and nullified. The same petition
insofar as it seeks to enjoin the respondent Judge from proceeding with Civil Case No. 46309 is, however,
denied. No pronouncement is here made as to costs. x x x x.
On September 3, 1983, AIDC filed a motion to dismiss the petition for injunction filed before Branch XIII of the CFI of
Rizal (Pasig) on the ground that the same had become moot and academic with the consummation of the
sale. Respondents filed their opposition to the motion arguing, among others, that where a third party who claims
ownership of the property attached or levied upon, a different legal situation is presented; and that in this case, two (2) of
the real properties are actually in the name of Encarnacion Ching, a non-party to Civil Case No. 42228.
The lower court denied the motion to dismiss. Hence, trial on the merits proceeded. Private respondents presented
several witnesses. On the other hand, petitioners did not present any evidence.
On September 18, 1991, the trial court promulgated its decision declaring the sale on execution null and
void. Petitioners appealed to the respondent court, which was docketed as CA-G.R. CV No. 29632.
On April 14, 1994, the respondent court promulgated the assailed decision, affirming the decision of the regional trial
court. It held that:
The loan procured from respondent-appellant AIDC was for the advancement and benefit of Philippine
Blooming Mills and not for the benefit of the conjugal partnership of petitioners-appellees.
xxx

xxx

xxx

As to the applicable law, whether it is Article 161 of the New Civil Code or Article 1211 of the Family Codesuffice it to say that the two provisions are substantially the same. Nevertheless, We agree with the trial court
that the Family Code is the applicable law on the matter x x x x x x.
Article 121 of the Family Code provides that The conjugal partnership shall be liable for: x x x (2) All debts and
obligations contracted during the marriage by the designated Administrator-Spouse for the benefit of the
conjugal partnership of gains x x x. The burden of proof that the debt was contracted for the benefit of the
conjugal partnership of gains, lies with the creditor-party litigant claiming as such. In the case at bar,
respondent-appellant AIDC failed to prove that the debt was contracted by appellee-husband, for the benefit of
the conjugal partnership of gains.
The dispositive portion of the decision reads:
WHEREFORE, in view of all the foregoing, judgment is hereby rendered DISMISSING the appeal. The
decision of the Regional Trial Court is AFFIRMED in toto.
Petitioner filed a Motion for Reconsideration which was denied by the respondent court in a Resolution dated
November 28, 1994.
Hence, this petition for review. Petitioner contends that the respondent court erred in ruling that the conjugal
partnership of private respondents is not liable for the obligation by the respondent-husband.
Specifically, the errors allegedly committed by the respondent court are as follows:

I. RESPONDENT COURT ERRED IN RULING THAT THE OBLIGATION INCURRED BY RESPONDENT


HUSBAND DID NOT REDOUND TO THE BENEFIT OF THE CONJUGAL PARTNERSHIP OF THE PRIVATE
RESPONDENT.
II

RESPONDENT COURT ERRED IN RULING THAT THE ACT OF RESPONDENT HUSBAND IN SECURING
THE SUBJECT LOAN IS NOT PART OF HIS INDUSTRY, BUSINESS OR CAREER FROM WHICH HE
SUPPORTS HIS FAMILY.

Petitioners in their appeal point out that there is no need to prove that actual benefit redounded to the benefit of the
partnership; all that is necessary, they say, is that the transaction was entered into for the benefit of the conjugal
partnership. Thus, petitioners aver that:
The wordings of Article 161 of the Civil Code is very clear: for the partnership to be held liable, the husband
must have contracted the debt for the benefit of the partnership, thus:
Art. 161. The conjugal partnership shall be liable for:
1)

all debts and obligations contracted by the husband for the benefit of the conjugal
partnership x x x.

There is a difference between the phrases: redounded to the benefit of or benefited from (on the one hand)
and for the benefit of (on the other). The former require that actual benefit must have been realized; the latter
requires only that the transaction should be one which normally would produce benefit to the partnership,
regardless of whether or not actual benefit accrued.
We do not agree with petitioners that there is a difference between the terms redounded to the benefit of or
benefited from on the one hand; and for the benefit of on the other. They mean one and the same thing. Article 161
(1) of the Civil Code and Article 121 (2) of the Family Code are similarly worded, i.e., both use the term for the benefit
of. On the other hand, Article 122 of the Family Code provides that The payment of personal debts by the husband or
the wife before or during the marriage shall not be charged to the conjugal partnership except insofar as they redounded
to the benefit of the family. As can be seen, the terms are used interchangeably.
Petitioners further contend that the ruling of the respondent court runs counter to the pronouncement of this Court in
the case of Cobb-Perezvs. Lantin, that the husband as head of the family and as administrator of the conjugal partnership
is presumed to have contracted obligations for the benefit of the family or the conjugal partnership.
Contrary to the contention of the petitioners, the case of Cobb-Perez is not applicable in the case at bar. This Court
has, on several instances, interpreted the term for the benefit of the conjugal partnership.
In the cases of Javier vs. Osmea, Abella de Diaz vs. Erlanger & Galinger, Inc., Cobb-Perez vs. Lantin and GTractors, Inc. vs. Court of Appeals, cited by the petitioners, we held that:
The debts contracted by the husband during the marriage relation, for and in the exercise of the industry or
profession by which he contributes toward the support of his family, are not his personal and private debts,
and the products or income from the wifes own property, which, like those of her husbands, are liable for the
payment of the marriage expenses, cannot be excepted from the payment of such debts. (Javier)
The husband, as the manager of the partnership (Article 1412, Civil Code), has a right to embark the
partnership in an ordinary commercial enterprise for gain, and the fact that the wife may not approve of a
venture does not make it a private and personal one of the husband. (Abella de Diaz)
Debts contracted by the husband for and in the exercise of the industry or profession by which he contributes
to the support of the family, cannot be deemed to be his exclusive and private debts. (Cobb-Perez)
x x x if he incurs an indebtedness in the legitimate pursuit of his career or profession or suffers losses in a
legitimate business, the conjugal partnership must equally bear the indebtedness and the losses, unless he
deliberately acted to the prejudice of his family. (G-Tractors)
However, in the cases of Ansaldo vs. Sheriff of Manila, Fidelity Insurance & Luzon Insurance Co., Liberty Insurance
Corporation vs. Banuelos, and Luzon Surety Inc. vs. De Garcia, cited by the respondents, we ruled that:
The fruits of the paraphernal property which form part of the assets of the conjugal partnership, are subject to
the payment of the debts and expenses of the spouses, but not to the payment of the personal obligations
(guaranty agreements) of the husband, unless it be proved that such obligations were productive of some
benefit to the family. (Ansaldo; parenthetical phrase ours.)

When there is no showing that the execution of an indemnity agreement by the husband redounded to the
benefit of his family, the undertaking is not a conjugal debt but an obligation personal to him. (Liberty
Insurance)
In the most categorical language, a conjugal partnership under Article 161 of the new Civil Code is liable only
for such debts and obligations contracted by the husband for the benefit of the conjugal partnership. There
must be the requisite showing then of some advantage which clearly accrued to the welfare of the
spouses. Certainly, to make a conjugal partnership respond for a liability that should appertain to the husband
alone is to defeat and frustrate the avowed objective of the new Civil Code to show the utmost concern for the
solidarity and well-being of the family as a unit. The husband, therefore, is denied the power to assume
unnecessary and unwarranted risks to the financial stability of the conjugal partnership. (Luzon Surety, Inc.)
From the foregoing jurisprudential rulings of this Court, we can derive the following conclusions:
(A) If the husband himself is the principal obligor in the contract, i.e., he directly received the money and services to be
used in or for his own business or his own profession, that contract falls within the term x x x x obligations for the benefit
of the conjugal partnership. Here, no actual benefit may be proved. It is enough that the benefit to the family is apparent
at the time of the signing of the contract. From the very nature of the contract of loan or services, the family stands to
benefit from the loan facility or services to be rendered to the business or profession of the husband. It is immaterial, if in
the end, his business or profession fails or does not succeed. Simply stated, where the husband contracts obligations on
behalf of the family business, the law presumes, and rightly so, that such obligation will redound to the benefit of the
conjugal partnership.
(B) On the other hand, if the money or services are given to another person or entity, and the husband acted only as
a surety or guarantor, that contract cannot, by itself, alone be categorized as falling within the context of obligations for
the benefit of the conjugal partnership. The contract of loan or services is clearly for the benefit of the principal debtor
and not for the surety or his family. No presumption can be inferred that, when a husband enters into a contract of surety
or accommodation agreement, it is for the benefit of the conjugal partnership. Proof must be presented to establish
benefit redounding to the conjugal partnership.
Thus, the distinction between the Cobb-Perez case, and we add, that of the three other companion cases, on the
one hand, and that of Ansaldo, Liberty Insurance and Luzon Surety, is that in the former, the husband contracted the
obligation for his own business; while in the latter, the husband merely acted as a surety for the loan contracted by
another for the latters business.
The evidence of petitioner indubitably show that co-respondent Alfredo Ching signed as surety for the P50M loan
contracted on behalf of PBM. Petitioner should have adduced evidence to prove that Alfredo Chings acting as surety
redounded to the benefit of the conjugal partnership. The reason for this is as lucidly explained by the respondent court:
The loan procured from respondent-appellant AIDC was for the advancement and benefit of Philippine
Blooming Mills and not for the benefit of the conjugal partnership of petitioners-appellees. Philippine
Blooming Mills has a personality distinct and separate from the family of petitioners-appellees - this despite
the fact that the members of the said family happened to be stockholders of said corporate entity.
xxx

xxx

xxx

x x x. The burden of proof that the debt was contracted for the benefit of the conjugal partnership of gains, lies
with the creditor-party litigant claiming as such. In the case at bar, respondent-appellant AIDC failed to prove
that the debt was contracted by appellee-husband, for the benefit of the conjugal partnership of gains. What is
apparent from the facts of the case is that the judgment debt was contracted by or in the name of the
Corporation Philippine Blooming Mills and appellee-husband only signed as surety thereof. The debt is clearly
a corporate debt and respondent-appellants right of recourse against appellee-husband as surety is only to
the extent of his corporate stockholdings. It does not extend to the conjugal partnership of gains of the family
of petitioners-appellees. x x x
x x x.
Petitioners contend that no actual benefit need accrue to the conjugal partnership. To support this contention, they
cite Justice J.B.L. Reyes authoritative opinion in the Luzon Surety Company case:
I concur in the result, but would like to make of record that, in my opinion, the words all debts and obligations
contracted by the husband for the benefit of the conjugal partnership used in Article 161 of the Civil Code of
the Philippines in describing the charges and obligations for which the conjugal partnership is liable do not
require that actual profit or benefit must accrue to the conjugal partnership from the husbands transaction; but
it suffices that the transaction should be one that normally would produce such benefit for the
partnership. This is the ratio behind our ruling in Javier vs. Osmea, 34 Phil. 336, that obligations incurred by
the husband in the practice of his profession are collectible from the conjugal partnership.

The aforequoted concurring opinion agreed with the majority decision that the conjugal partnership should not be
made liable for the surety agreement which was clearly for the benefit of a third party. Such opinion merely registered an
exception to what may be construed as a sweeping statement that in all cases actual profit or benefit must accrue to the
conjugal partnership. The opinion merely made it clear that no actual benefits to the family need be proved in some cases
such as in the Javier case. There, the husband was the principal obligor himself. Thus, said transaction was found to be
one that would normally produce x x x benefit for the partnership. In the later case of G-Tractors, Inc., the husband was
also the principal obligor - not merely the surety. This latter case, therefore, did not create any precedent. It did not also
supersede the Luzon Surety Company case, nor any of the previous accommodation contract cases, where this Court
ruled that they were for the benefit of third parties.
But it could be argued, as the petitioner suggests, that even in such kind of contract of accommodation, a benefit for
the family may also result, when the guarantee is in favor of the husbands employer.
In the case at bar, petitioner claims that the benefits the respondent family would reasonably anticipate were the
following:
(a)
The employment of co-respondent Alfredo Ching would be prolonged and he would be entitled to his
monthly salary ofP20,000.00 for an extended length of time because of the loan he guaranteed;
(b)
The shares of stock of the members of his family would appreciate if the PBM could be rehabilitated
through the loan obtained;
(c)
His prestige in the corporation would be enhanced and his career would be boosted should PBM
survive because of the loan.
However, these are not the benefits contemplated by Article 161 of the Civil Code. The benefits must be one directly
resulting from the loan. It cannot merely be a by-product or a spin-off of the loan itself.
In all our decisions involving accommodation contracts of the husband, we underscored the requirement that: there
must be the requisite showing x x x of some advantage which clearly accrued to the welfare of the spouses or benefits to
his family or that such obligations are productive of some benefit to the family. Unfortunately, the petition did not
present any proof to show: (a) Whether or not the corporate existence of PBM was prolonged and for how many months
or years; and/or (b) Whether or not the PBM was saved by the loan and its shares of stock appreciated, if so, how much
and how substantial was the holdings of the Ching family.
Such benefits (prospects of longer employment and probable increase in the value of stocks) might have been
already apparent or could be anticipated at the time the accommodation agreement was entered into. But would those
benefits qualify the transaction as one of the obligations x x x for the benefit of the conjugal partnership? Are indirect
and remote probable benefits, the ones referred to in Article 161 of the Civil Code? The Court of Appeals in denying the
motion for reconsideration, disposed of these questions in the following manner:
No matter how one looks at it, the debt/credit extended by respondents-appellants is purely a corporate debt
granted to PBM, with petitioner-appellee-husband merely signing as surety. While such petitioner-appelleehusband, as such surety, is solidarily liable with the principal debtor AIDC, such liability under the Civil Code
provisions is specifically restricted by Article 122 (par. 1) of the Family Code, so that debts for which the
husband is liable may not be charged against conjugal partnership properties. Article 122 of the Family Code
is explicit The payment of personal debts contracted by the husband or the wife before or during the
marriage shall not be charged to the conjugal partnership except insofar as they redounded to the benefit of
the family.
Respondents-appellants insist that the corporate debt in question falls under the exception laid down in said
Article 122 (par. one). We do not agree. The loan procured from respondent-appellant AIDC was for the sole
advancement and benefit of Philippine Blooming Mills and not for the benefit of the conjugal partnership of
petitioners-appellees.
x x x appellee-husband derives salaries, dividends benefits from Philippine Blooming Mills (the debtor
corporation), only because said husband is an employee of said PBM. These salaries and benefits, are not
the benefits contemplated by Articles 121 and 122 of the Family Code. The benefits contemplated by the
exception in Article 122 (Family Code) is that benefit derived directly from the use of the loan. In the case at
bar, the loan is a corporate loan extended to PBM and used by PBM itself, not by petitioner-appellee-husband
or his family. The alleged benefit, if any, continuously harped by respondents-appellants, are not only
incidental but also speculative.
We agree with the respondent court. Indeed, considering the odds involved in guaranteeing a large amount
(P50,000,000.00) of loan, the probable prolongation of employment in PBM and increase in value of its stocks, would be
too small to qualify the transaction as one for the benefit of the suretys family. Verily, no one could say, with a degree of
certainty, that the said contract is even productive of some benefits to the conjugal partnership.

We likewise agree with the respondent court (and this view is not contested by the petitioners) that the provisions of
the Family Code is applicable in this case. These provisions highlight the underlying concern of the law for the
conservation of the conjugal partnership; for the husbands duty to protect and safeguard, if not augment, not to dissipate
it.
This is the underlying reason why the Family Code clarifies that the obligations entered into by one of the spouses
must be those that redounded to the benefit of the family and that the measure of the partnerships liability is to the extent
that the family is benefited.
These are all in keeping with the spirit and intent of the other provisions of the Civil Code which prohibits any of the
spouses to donate or convey gratuitously any part of the conjugal property. Thus, when co-respondent Alfredo Ching
entered into a surety agreement he, from then on, definitely put in peril the conjugal property (in this case, including the
family home) and placed it in danger of being taken gratuitously as in cases of donation.
In the second assignment of error, the petitioner advances the view that acting as surety is part of the business or
profession of the respondent-husband.
This theory is new as it is novel.
The respondent court correctly observed that:
Signing as a surety is certainly not an exercise of an industry or profession, hence the cited cases of CobbPerez vs. Lantin; Abella de Diaz vs. Erlanger & Galinger; G-Tractors, Inc. vs. CA do not apply in the instant
case. Signing as a surety is not embarking in a business.
We are likewise of the view that no matter how often an executive acted or was persuaded to act, as a surety for his own
employer, this should not be taken to mean that he had thereby embarked in the business of suretyship or guaranty.
This is not to say, however, that we are unaware that executives are often asked to stand as surety for their
companys loan obligations. This is especially true if the corporate officials have sufficient property of their own;
otherwise, their spouses signatures are required in order to bind the conjugal partnerships.
The fact that on several occasions the lending institutions did not require the signature of the wife and the husband
signed alone does not mean that being a surety became part of his profession. Neither could he be presumed to have
acted for the conjugal partnership.
Article 121, paragraph 3, of the Family Code is emphatic that the payment of personal debts contracted by the
husband or the wife before or during the marriage shall not be charged to the conjugal partnership except to the extent
that they redounded to the benefit of the family.
Here, the property in dispute also involves the family home. The loan is a corporate loan not a personal
one. Signing as a surety is certainly not an exercise of an industry or profession nor an act of administration for the
benefit of the family.
On the basis of the facts, the rules, the law and equity, the assailed decision should be upheld as we now uphold
it. This is, of course, without prejudice to petitioners right to enforce the obligation in its favor against the PBM receiver in
accordance with the rehabilitation program and payment schedule approved or to be approved by the Securities &
Exchange Commission.
WHEREFORE, the petition for review should be, as it is hereby, DENIED for lack of merit.
SO ORDERED.

CHING VS CA
CALLEJO, SR., J.:
This petition for review, under Rule 45 of the Revised Rules of Court, assails the Decision of the Court of Appeals (CA)
dated November 27, 1995 in CA-G.R. SP No. 33585, as well as the Resolution on April 2, 1996 denying the petitioners
motion for reconsideration. The impugned decision granted the private respondents petition forcertiorari and set aside the
Orders of the trial court dated December 15, 1993 and February 17, 1994 nullifying the attachment of 100,000 shares of
stocks of the Citycorp Investment Philippines under the name of petitioner Alfredo Ching.
The following facts are undisputed:

On September 26, 1978, the Philippine Blooming Mills Company, Inc. (PBMCI) obtained a loan of P9,000,000.00 from the
Allied Banking Corporation (ABC). By virtue of this loan, the PBMCI, through its Executive Vice-President Alfredo Ching,
executed a promissory note for the said amount promising to pay on December 22, 1978 at an interest rate of 14% per
annum. As added security for the said loan, on September 28, 1978, Alfredo Ching, together with Emilio Taedo and
Chung Kiat Hua, executed a continuing guaranty with the ABC binding themselves to jointly and severally guarantee the
payment of all the PBMCI obligations owing the ABC to the extent of P38,000,000.00. The loan was subsequently
renewed on various dates, the last renewal having been made on December 4, 1980.
Earlier, on December 28, 1979, the ABC extended another loan to the PBMCI in the amount of P13,000,000.00 payable in
eighteen months at 16% interest per annum. As in the previous loan, the PBMCI, through Alfredo Ching, executed a
promissory note to evidence the loan maturing on June 29, 1981. This was renewed once for a period of one month.
The PBMCI defaulted in the payment of all its loans. Hence, on August 21, 1981, the ABC filed a complaint for sum of
money with prayer for a writ of preliminary attachment against the PBMCI to collect the P12,612,972.88 exclusive of
interests, penalties and other bank charges. Impleaded as co-defendants in the complaint were Alfredo Ching, Emilio
Taedo and Chung Kiat Hua in their capacity as sureties of the PBMCI.
The case was docketed as Civil Case No. 142729 in the Regional Trial Court of Manila, Branch XVIII. In its application for
a writ of preliminary attachment, the ABC averred that the "defendants are guilty of fraud in incurring the obligations upon
which the present action is brought in that they falsely represented themselves to be in a financial position to pay their
obligation upon maturity thereof." Its supporting affidavit stated, inter alia, that the "[d]efendants have removed or
disposed of their properties, or [are] ABOUT to do so, with intent to defraud their creditors."
On August 26, 1981, after an ex-parte hearing, the trial court issued an Order denying the ABCs application for a writ of
preliminary attachment. The trial court decreed that the grounds alleged in the application and that of its supporting
affidavit "are all conclusions of fact and of law" which do not warrant the issuance of the writ prayed for. On motion for
reconsideration, however, the trial court, in an Order dated September 14, 1981, reconsidered its previous order and
granted the ABCs application for a writ of preliminary attachment on a bond of P12,700,000. The order, in relevant part,
stated:
With respect to the second ground relied upon for the grant of the writ of preliminary attachment ex-parte, which is the
alleged disposal of properties by the defendants with intent to defraud creditors as provided in Sec. 1(e) of Rule 57 of the
Rules of Court, the affidavits can only barely justify the issuance of said writ as against the defendant Alfredo Ching who
has allegedly bound himself jointly and severally to pay plaintiff the defendant corporations obligation to the plaintiff as a
surety thereof.
WHEREFORE, let a writ of preliminary attachment issue as against the defendant Alfredo Ching requiring the sheriff of
this Court to attach all the properties of said Alfredo Ching not exceeding P12,612,972.82 in value, which are within the
jurisdiction of this Court and not exempt from execution upon, the filing by plaintiff of a bond duly approved by this Court in
the sum of Twelve Million Seven Hundred Thousand Pesos (P12,700,000.00) executed in favor of the defendant Alfredo
Ching to secure the payment by plaintiff to him of all the costs which may be adjudged in his favor and all damages he
may sustain by reason of the attachment if the court shall finally adjudge that the plaintiff was not entitled thereto.
SO ORDERED.
Upon the ABCs posting of the requisite bond, the trial court issued a writ of preliminary attachment. Subsequently,
summonses were served on the defendants, save Chung Kiat Hua who could not be found.
Meanwhile, on April 1, 1982, the PBMCI and Alfredo Ching jointly filed a petition for suspension of payments with the
Securities and Exchange Commission (SEC), docketed as SEC Case No. 2250, at the same time seeking the PBMCIs
rehabilitation.
On July 9, 1982, the SEC issued an Order placing the PBMCIs business, including its assets and liabilities, under
rehabilitation receivership, and ordered that "all actions for claims listed in Schedule "A" of the petition pending before any
court or tribunal are hereby suspended in whatever stage the same may be until further orders from the Commission." The
ABC was among the PBMCIs creditors named in the said schedule.
Subsequently, on January 31, 1983, the PBMCI and Alfredo Ching jointly filed a Motion to Dismiss and/or motion to
suspend the proceedings in Civil Case No. 142729 invoking the PBMCIs pending application for suspension of payments
(which Ching co-signed) and over which the SEC had already assumed jurisdiction. On February 4, 1983, the ABC filed its
Opposition thereto.
In the meantime, on July 26, 1983, the deputy sheriff of the trial court levied on attachment the 100,000 common shares of
Citycorp stocks in the name of Alfredo Ching.
Thereafter, in an Order dated September 16, 1983, the trial court partially granted the aforementioned motion by
suspending the proceedings only with respect to the PBMCI. It denied Chings motion to dismiss the complaint/or suspend
the proceedings and pointed out that P.D. No. 1758 only concerns the activities of corporations, partnerships and

associations and was never intended to regulate and/or control activities of individuals. Thus, it directed the individual
defendants to file their answers.
Instead of filing an answer, Ching filed on January 14, 1984 a Motion to Suspend Proceedings on the same ground of the
pendency of SEC Case No. 2250. This motion met the opposition from the ABC.
On January 20, 1984, Taedo filed his Answer with counterclaim and cross-claim. Ching eventually filed his Answer on
July 12, 1984.
On October 25, 1984, long after submitting their answers, Ching filed an Omnibus Motion, again praying for the dismissal
of the complaint or suspension of the proceedings on the ground of the July 9, 1982 Injunctive Order issued in SEC Case
No. 2250. He averred that as a surety of the PBMCI, he must also necessarily benefit from the defenses of his principal.
The ABC opposed Chings omnibus motion.
Emilio Y. Taedo, thereafter, filed his own Omnibus Motion praying for the dismissal of the complaint, arguing that the ABC
had "abandoned and waived" its right to proceed against the continuing guaranty by its act of resorting to preliminary
attachment.
On December 17, 1986, the ABC filed a Motion to Reduce the amount of his preliminary attachment bond
fromP12,700,000 to P6,350,000. Alfredo Ching opposed the motion, but on April 2, 1987, the court issued an Order
setting the incident for further hearing on May 28, 1987 at 8:30 a.m. for the parties to adduce evidence on the actual value
of the properties of Alfredo Ching levied on by the sheriff.
On March 2, 1988, the trial court issued an Order granting the motion of the ABC and rendered the attachment bond
of P6,350,000.
On November 16, 1993, Encarnacion T. Ching, assisted by her husband Alfredo Ching, filed a Motion to Set Aside the levy
on attachment. She alleged inter alia that the 100,000 shares of stocks levied on by the sheriff were acquired by her and
her husband during their marriage out of conjugal funds after the Citycorp Investment Philippines was established in 1974.
Furthermore, the indebtedness covered by the continuing guaranty/comprehensive suretyship contract executed by
petitioner Alfredo Ching for the account of PBMCI did not redound to the benefit of the conjugal partnership. She, likewise,
alleged that being the wife of Alfredo Ching, she was a third-party claimant entitled to file a motion for the release of the
properties. She attached therewith a copy of her marriage contract with Alfredo Ching.
The ABC filed a comment on the motion to quash preliminary attachment and/or motion to expunge records, contending
that:
2.1 The supposed movant, Encarnacion T. Ching, is not a party to this present case; thus, she has no personality
to file any motion before this Honorable Court;
2.2 Said supposed movant did not file any Motion for Intervention pursuant to Section 2, Rule 12 of the Rules of
Court;
2.3 Said Motion cannot even be construed to be in the nature of a Third-Party Claim conformably with Sec. 14,
Rule 57 of the Rules of Court.
3. Furthermore, assuming in gracia argumenti that the supposed movant has the required personality, her Motion cannot
be acted upon by this Honorable Court as the above-entitled case is still in the archives and the proceedings thereon still
remains suspended. And there is no previous Motion to revive the same.
The ABC also alleged that the motion was barred by prescription or by laches because the shares of stocks were in
custodia legis.
During the hearing of the motion, Encarnacion T. Ching adduced in evidence her marriage contract to Alfredo Ching to
prove that they were married on January 8, 1960; the articles of incorporation of Citycorp Investment Philippines dated
May 14, 1979; and, the General Information Sheet of the corporation showing that petitioner Alfredo Ching was a member
of the Board of Directors of the said corporation and was one of its top twenty stockholders.
On December 10, 1993, the Spouses Ching filed their Reply/Opposition to the motion to expunge records.
Acting on the aforementioned motion, the trial court issued on December 15, 1993 an Order lifting the writ of preliminary
attachment on the shares of stocks and ordering the sheriff to return the said stocks to the petitioners. The dispositive
portion reads:
WHEREFORE, the instant Motion to Quash Preliminary Attachment, dated November 9, 1993, is hereby granted. Let the
writ of preliminary attachment subject matter of said motion, be quashed and lifted with respect to the attached 100,000
common shares of stock of Citycorp Investment Philippines in the name of the defendant Alfredo Ching, the said shares of
stock to be returned to him and his movant-spouse by Deputy Sheriff Apolonio A. Golfo who effected the levy thereon on
July 26, 1983, or by whoever may be presently in possession thereof.
SO ORDERED.

The plaintiff Allied Banking Corporation filed a motion for the reconsideration of the order but denied the same on
February 17, 1994. The petitioner bank forthwith filed a petition for certiorari with the CA, docketed as CA-G.R. SP No.
33585, for the nullification of the said order of the court, contending that:
1. The respondent Judge exceeded his authority thereby acted without jurisdiction in taking cognizance of, and
granting a "Motion" filed by a complete stranger to the case.
2. The respondent Judge committed a grave abuse of discretion in lifting the writ of preliminary attachment without
any basis in fact and in law, and contrary to established jurisprudence on the matter.
On November 27, 1995, the CA rendered judgment granting the petition and setting aside the assailed orders of the trial
court, thus:
WHEREFORE, premises considered, the petition is GRANTED, hereby setting aside the questioned orders (dated
December 15, 1993 and February 17, 1994) for being null and void.
SO ORDERED.
The CA sustained the contention of the private respondent and set aside the assailed orders. According to the CA, the
RTC deprived the private respondent of its right to file a bond under Section 14, Rule 57 of the Rules of Court. The
petitioner Encarnacion T. Ching was not a party in the trial court; hence, she had no right of action to have the levy
annulled with a motion for that purpose. Her remedy in such case was to file a separate action against the private
respondent to nullify the levy on the 100,000 Citycorp shares of stocks. The court stated that even assuming that
Encarnacion T. Ching had the right to file the said motion, the same was barred by laches.
Citing Wong v. Intermediate Appellate Court, the CA ruled that the presumption in Article 160 of the New Civil Code shall
not apply where, as in this case, the petitioner-spouses failed to prove the source of the money used to acquire the shares
of stock. It held that the levied shares of stocks belonged to Alfredo Ching, as evidenced by the fact that the said shares
were registered in the corporate books of Citycorp solely under his name. Thus, according to the appellate court, the RTC
committed a grave abuse of its discretion amounting to excess or lack of jurisdiction in issuing the assailed orders. The
petitioners motion for reconsideration was denied by the CA in a Resolution dated April 2, 1996.
The petitioner-spouses filed the instant petition for review on certiorari, asserting that the RTC did not commit any grave
abuse of discretion amounting to excess or lack of jurisdiction in issuing the assailed orders in their favor; hence, the CA
erred in reversing the same. They aver that the source of funds in the acquisition of the levied shares of stocks is not the
controlling factor when invoking the presumption of the conjugal nature of stocks under Art. 160, and that such
presumption subsists even if the property is registered only in the name of one of the spouses, in this case, petitioner
Alfredo Ching. According to the petitioners, the suretyship obligation was not contracted in the pursuit of the petitionerhusbands profession or business. And, contrary to the ruling of the CA, where conjugal assets are attached in a collection
suit on an obligation contracted by the husband, the wife should exhaust her motion to quash in the main case and not file
a separate suit. Furthermore, the petitioners contend that under Art. 125 of the Family Code, the petitioner-husbands
gratuitous suretyship is null and void ab initio, and that the share of one of the spouses in the conjugal partnership
remains inchoate until the dissolution and liquidation of the partnership.
In its comment on the petition, the private respondent asserts that the CA correctly granted its petition for certiorari
nullifying the assailed order. It contends that the CA correctly relied on the ruling of this Court in Wong v. Intermediate
Appellate Court. Citing Cobb-Perez v. Lantin and G-Tractors, Inc. v. Court of Appeals, the private respondent alleges that
the continuing guaranty and suretyship executed by petitioner Alfredo Ching in pursuit of his profession or business.
Furthermore, according to the private respondent, the right of the petitioner-wife to a share in the conjugal partnership
property is merely inchoate before the dissolution of the partnership; as such, she had no right to file the said motion to
quash the levy on attachment of the shares of stocks.
The issues for resolution are as follows: (a) whether the petitioner-wife has the right to file the motion to quash the levy on
attachment on the 100,000 shares of stocks in the Citycorp Investment Philippines; (b) whether or not the RTC committed
a grave abuse of its discretion amounting to excess or lack of jurisdiction in issuing the assailed orders.
On the first issue, we agree with the petitioners that the petitioner-wife had the right to file the said motion, although she
was not a party in Civil Case No. 142729.
In Ong v. Tating, we held that the sheriff may attach only those properties of the defendant against whom a writ of
attachment has been issued by the court. When the sheriff erroneously levies on attachment and seizes the property of a
third person in which the said defendant holds no right or interest, the superior authority of the court which has authorized
the execution may be invoked by the aggrieved third person in the same case. Upon application of the third person, the
court shall order a summary hearing for the purpose of determining whether the sheriff has acted rightly or wrongly in the
performance of his duties in the execution of the writ of attachment, more specifically if he has indeed levied on
attachment and taken hold of property not belonging to the plaintiff. If so, the court may then order the sheriff to release
the property from the erroneous levy and to return the same to the third person. In resolving the motion of the third party,
the court does not and cannot pass upon the question of the title to the property with any character of finality. It can treat

the matter only insofar as may be necessary to decide if the sheriff has acted correctly or not. If the claimants proof does
not persuade the court of the validity of the title, or right of possession thereto, the claim will be denied by the court. The
aggrieved third party may also avail himself of the remedy of "terceria" by executing an affidavit of his title or right of
possession over the property levied on attachment and serving the same to the office making the levy and the adverse
party. Such party may also file an action to nullify the levy with damages resulting from the unlawful levy and seizure,
which should be a totally separate and distinct action from the former case. The above-mentioned remedies are
cumulative and any one of them may be resorted to by one third-party claimant without availing of the other remedies.
In this case, the petitioner-wife filed her motion to set aside the levy on attachment of the 100,000 shares of stocks in the
name of petitioner-husband claiming that the said shares of stocks were conjugal in nature; hence, not liable for the
account of her husband under his continuing guaranty and suretyship agreement with the PBMCI. The petitioner-wife had
the right to file the motion for said relief.
On the second issue, we find and so hold that the CA erred in setting aside and reversing the orders of the RTC. The
private respondent, the petitioner in the CA, was burdened to prove that the RTC committed a grave abuse of its
discretion amounting to excess or lack of jurisdiction. The tribunal acts without jurisdiction if it does not have the legal
purpose to determine the case; there is excess of jurisdiction where the tribunal, being clothed with the power to
determine the case, oversteps its authority as determined by law. There is grave abuse of discretion where the tribunal
acts in a capricious, whimsical, arbitrary or despotic manner in the exercise of its judgment and is equivalent to lack of
jurisdiction.
It was incumbent upon the private respondent to adduce a sufficiently strong demonstration that the RTC acted
whimsically in total disregard of evidence material to, and even decide of, the controversy before certiorari will lie. A
special civil action for certiorari is a remedy designed for the correction of errors of jurisdiction and not errors of judgment.
When a court exercises its jurisdiction, an error committed while so engaged does not deprive it of its jurisdiction being
exercised when the error is committed.
After a comprehensive review of the records of the RTC and of the CA, we find and so hold that the RTC did not commit
any grave abuse of its discretion amounting to excess or lack of jurisdiction in issuing the assailed orders.
Article 160 of the New Civil Code provides that all the properties acquired during the marriage are presumed to belong to
the conjugal partnership, unless it be proved that it pertains exclusively to the husband, or to the wife. InTan v. Court of
Appeals, we held that it is not even necessary to prove that the properties were acquired with funds of the partnership. As
long as the properties were acquired by the parties during the marriage, they are presumed to be conjugal in nature. In
fact, even when the manner in which the properties were acquired does not appear, the presumption will still apply, and
the properties will still be considered conjugal. The presumption of the conjugal nature of the properties acquired during
the marriage subsists in the absence of clear, satisfactory and convincing evidence to overcome the same.
In this case, the evidence adduced by the petitioners in the RTC is that the 100,000 shares of stocks in the Citycorp
Investment Philippines were issued to and registered in its corporate books in the name of the petitioner-husband when
the said corporation was incorporated on May 14, 1979. This was done during the subsistence of the marriage of the
petitioner-spouses. The shares of stocks are, thus, presumed to be the conjugal partnership property of the petitioners.
The private respondent failed to adduce evidence that the petitioner-husband acquired the stocks with his exclusive
money. The barefaced fact that the shares of stocks were registered in the corporate books of Citycorp Investment
Philippines solely in the name of the petitioner-husband does not constitute proof that the petitioner-husband, not the
conjugal partnership, owned the same. The private respondents reliance on the rulings of this Court in Maramba v.
Lozano and Associated Insurance & Surety Co., Inc. v. Banzon is misplaced. In the Maramba case, we held that where
there is no showing as to when the property was acquired, the fact that the title is in the wifes name alone is
determinative of the ownership of the property. The principle was reiterated in the Associated Insurance case where the
uncontroverted evidence showed that the shares of stocks were acquired during the marriage of the petitioners.
Instead of fortifying the contention of the respondents, the ruling of this Court in Wong v. Intermediate Appellate
Court buttresses the case for the petitioners. In that case, we ruled that he who claims that property acquired by the
spouses during their marriage is not conjugal partnership property but belongs to one of them as his personal property is
burdened to prove the source of the money utilized to purchase the same. In this case, the private respondent claimed
that the petitioner-husband acquired the shares of stocks from the Citycorp Investment Philippines in his own name as the
owner thereof. It was, thus, the burden of the private respondent to prove that the source of the money utilized in the
acquisition of the shares of stocks was that of the petitioner-husband alone. As held by the trial court, the private
respondent failed to adduce evidence to prove this assertion.
The CA, likewise, erred in holding that by executing a continuing guaranty and suretyship agreement with the private
respondent for the payment of the PBMCI loans, the petitioner-husband was in the exercise of his profession, pursuing a
legitimate business. The appellate court erred in concluding that the conjugal partnership is liable for the said account of
PBMCI under Article 161(1) of the New Civil Code.

Article 161(1) of the New Civil Code (now Article 121[2 and 3] of the Family Code of the Philippines) provides:
Art. 161. The conjugal partnership shall be liable for:
(1) All debts and obligations contracted by the husband for the benefit of the conjugal partnership, and those contracted
by the wife, also for the same purpose, in the cases where she may legally bind the partnership.
The petitioner-husband signed the continuing guaranty and suretyship agreement as security for the payment of the loan
obtained by the PBMCI from the private respondent in the amount of P38,000,000. In Ayala Investment and Development
Corp. v. Court of Appeals, this Court ruled "that the signing as surety is certainly not an exercise of an industry or
profession. It is not embarking in a business. No matter how often an executive acted on or was persuaded to act as
surety for his own employer, this should not be taken to mean that he thereby embarked in the business of suretyship or
guaranty."
For the conjugal partnership to be liable for a liability that should appertain to the husband alone, there must be a showing
that some advantages accrued to the spouses. Certainly, to make a conjugal partnership responsible for a liability that
should appertain alone to one of the spouses is to frustrate the objective of the New Civil Code to show the utmost
concern for the solidarity and well being of the family as a unit. The husband, therefore, is denied the power to assume
unnecessary and unwarranted risks to the financial stability of the conjugal partnership.
In this case, the private respondent failed to prove that the conjugal partnership of the petitioners was benefited by the
petitioner-husbands act of executing a continuing guaranty and suretyship agreement with the private respondent for and
in behalf of PBMCI. The contract of loan was between the private respondent and the PBMCI, solely for the benefit of the
latter. No presumption can be inferred from the fact that when the petitioner-husband entered into an accommodation
agreement or a contract of surety, the conjugal partnership would thereby be benefited. The private respondent was
burdened to establish that such benefit redounded to the conjugal partnership.
It could be argued that the petitioner-husband was a member of the Board of Directors of PBMCI and was one of its top
twenty stockholders, and that the shares of stocks of the petitioner-husband and his family would appreciate if the PBMCI
could be rehabilitated through the loans obtained; that the petitioner-husbands career would be enhanced should PBMCI
survive because of the infusion of fresh capital. However, these are not the benefits contemplated by Article 161 of the
New Civil Code. The benefits must be those directly resulting from the loan. They cannot merely be a by-product or a
spin-off of the loan itself.
This is different from the situation where the husband borrows money or receives services to be used for his own business
or profession. In the Ayala case, we ruled that it is such a contract that is one within the term "obligation for the benefit of
the conjugal partnership." Thus:
(A) If the husband himself is the principal obligor in the contract, i.e., he directly received the money and services to be
used in or for his own business or his own profession, that contract falls within the term " obligations for the benefit of
the conjugal partnership." Here, no actual benefit may be proved. It is enough that the benefit to the family is apparent at
the time of the signing of the contract. From the very nature of the contract of loan or services, the family stands to benefit
from the loan facility or services to be rendered to the business or profession of the husband. It is immaterial, if in the end,
his business or profession fails or does not succeed. Simply stated, where the husband contracts obligations on behalf of
the family business, the law presumes, and rightly so, that such obligation will redound to the benefit of the conjugal
partnership.
The Court held in the same case that the rulings of the Court in Cobb-Perez and G-Tractors, Inc. are not controlling
because the husband, in those cases, contracted the obligation for his own business. In this case, the petitioner-husband
acted merely as a surety for the loan contracted by the PBMCI from the private respondent.
IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The Decision and Resolution of the Court of Appeals are
SET ASIDE AND REVERSED. The assailed orders of the RTC are AFFIRMED.
SO ORDERED.

FRANCISCO VS GONZALES

AUSTRIA-MARTINEZ, J.:
Assailed in the present petition for review on certiorari under Rule 45 of the Rules of Court is the Court of Appeals
(CA) Decision dated April 30, 2007, which affirmed the Regional Trial Court (RTC) Orders dated June 4, 2003 and July 31,
2003, denying petitioners' motion to stop execution sale.

Petitioners Cleodia U. Francisco and Ceamantha U. Francisco are the minor children of Cleodualdo M. Francisco
(Cleodualdo) and Michele Uriarte Francisco (Michele). In a Partial Decision dated November 29, 2000 rendered by the
RTC of Makati, Branch 144, in Civil Case No. 93-2289 for Declaration of Nullity of Marriage, the Compromise Agreement
entered into by the estranged couple was approved. The Compromise Agreement contained in part the following
provisions:
7. In
their
desire
to
manifest
their
genuine
concern
for
their
children, Cleodia and Ceamantha, Cleodualdo and Michelle have voluntarily agreed to herein set forth
their obligations, rights and responsibilities on matters relating to their children's support, custody,
visitation, as well as to the dissolution of their conjugal partnership of gains as follows:
(a) Title and ownership of the conjugal property consisting of a house and lot
located in Ayala Alabang, Muntinlupa, Metro Manila shall be transferred by way of a deed
of donation toCleodia and Ceamantha, as co-owners, when they reach nineteen (19) and
eighteen (18) years old, respectively, subject to the following conditions:
xxx
The property subject of the Compromise Agreement is a house and lot covered by Transfer Certificate of Title No.
167907 in the name of Cleodualdo M. Francisco, married to Michele U. Francisco, with an area of 414 square meters, and
located in 410 Taal St., Ayala Alabang Village, Muntinlupa City.
Meanwhile, in a case for Unlawful Detainer with Preliminary Attachment filed by spouses Jorge C. Gonzales
and Purificacion W. Gonzales (respondents) against GeorgeZoltan Matrai (Matrai) and Michele, the Metropolitan Trial
Court (MeTC) of Muntinlupa City, Branch 80, rendered a Decision dated May 10, 2001, ordering Matrai and Michele to
vacate the premises leased to them located in 264 Lanka Drive, Ayala Alabang Village, Muntinlupa City, and to pay back
rentals, unpaid telephone bills and attorney's fees.
Pending appeal with the RTC of Muntinlupa, Branch 256, an order was issued granting respondents' prayer for the
execution of the MeTC Decision. A notice of sale by execution was then issued by the sheriff covering the real property
under Transfer Certificate of Title No. T-167907 in the name of Cleodualdo M. Francisco, married to Michele U. Francisco.
When petitioners' grandmother learned of the scheduled auction, she, as guardian-in-fact of petitioners, filed with
the RTC an Affidavit of Third Party Claim and a Very Urgent Motion to Stop Sale by Execution but this was denied in the
Order dated June 4, 2003. Petitioners' motion for reconsideration was denied per RTC Order dated July 31, 2003.
Petitioners then filed a petition for certiorari with the CA.
Pending resolution by the CA, the RTC issued an Order dated July 8, 2005, granting respondents' petition for the
issuance of a new certificate of title. The RTC also issued an Order on February 13, 2006, granting respondents' motion
for the issuance of a writ of possession.
On April 30, 2007, the CA dismissed the petition, the dispositive portion of which reads:
WHEREFORE, premises considered, the Petition is hereby DISMISSED. The Order(s),
dated June 4, 2003 and July 31, 2003, of the Regional Trial Court of Muntinlupa City, Br. 256, in Civil
Case No. 01-201, STAND. Costs against the Petitioners.
SO ORDERED.
Hence, herein petition. As prayed for, the Court issued a temporary restraining order on July 11, 2007, enjoining
respondents, the RTC, the Register of Deeds, and the Sheriff from implementing or enforcing the RTC Order dated July 8,
2005, canceling TCT No. 167907 and Order dated February 13, 2006, issuing a writ of possession, until further orders
from the Court.
Petitioners argue that: (1) they are the rightful owners of the property as the Partial Decision issued by the RTC
of Makati in Civil Case No. 93-2289 had already become final; (2) their parents already waived in their favor their rights
over the property; (3) the adjudged obligation of Michele in the ejectment case did not redound to the benefit of the family;
(4) Michele's obligation is a joint obligation between her and Matrai, not joint and solidary.
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, in the present case to those belonging to Michele and Matrai. One man's goods shall not be
sold for another man's debts.
To begin with, the RTC should not have ignored that TCT No. 167907 is in the name of Cleodualdo M. Francisco,
married to Michele U. Francisco. On its face, the title shows that the registered owner of the property is not Matrai and
Michele but Cleodualdo, married to Michele. This describes the civil status of Cleodualdo at the time the property was
acquired.
Records show that Cleodualdo and Michele were married on June 12, 1986, prior to the effectivity of the Family
Code on August 3, 1988. As such, their property relations are governed by the Civil Code on conjugal partnership of
gains.

The CA acknowledged that ownership of the subject property is conjugal in nature; however, it ruled that since
Michele's obligation was not proven to be a personal debt, it must be inferred that it is conjugal and redounded to the
benefit of the family, and hence, the property may be held answerable for it.
The Court does not agree.
A wife may bind the conjugal partnership only when she purchases things necessary for the support of the family, or
when she borrows money for that purpose upon her husband's failure to deliver the needed sum; when administration of
the conjugal partnership is transferred to the wife by the courts or by the husband; or when the wife gives moderate
donations for charity. Failure to establish any of these circumstances means that the conjugal asset may not be bound to
answer for the wife's personal obligation. Considering that the foregoing circumstances are evidently not present in this
case as the liability incurred by Michele arose from a judgment rendered in an unlawful detainercase against her and her
partner Matrai.
Furthermore, even prior to the issuance of the Notice of Levy on Execution on November 28, 2001, there was
already annotated on the title the following inscription:
Entry No. 23341-42/T-167907 Nullification of Marriage
By order of the Court RTC, NCR, Branch 144, Makati City dated July 4, 2001, which become final
and executory on
October
18,
2001 declaring
the
Marriage
Contract
between
Michelle Uriarte and Cleodualdo M. Francisco, Jr. is null & void ab initio and title of ownership of the
conjugal property consisting of the above-described property shall be transferred by way of a Deed of
Donation to Cleodia Michaela U. Francisco and Ceamantha Maica U. Francisco, as co-owners when they
reach nineteen (19) and eighteen (18) yrs. old to the condition thatCleodualdo, shall
retain usufructuary rights over the property until he reaches the age of 65 yrs. Old.
Date of instrument Oct 18, 2001
Date of inscription Oct 22, 2001.
This annotation should have put the RTC and the sheriff on guard, and they should not have proceeded with the execution
of the judgment debt of Michele and Matrai.
While the trial court has the competence to identify and to secure properties and interest therein held by the
judgment debtor for the satisfaction of a money judgment rendered against him, such exercise of its authority is premised
on one important fact: that the properties levied upon, or sought to be levied upon, are properties unquestionably owned
by the judgment debtor and are not exempt by law from execution. Also, a sheriff is not authorized to attach or levy on
property not belonging to the judgment debtor, and even incurs liability if he wrongfully levies upon the property of a third
person. A sheriff has no authority to attach the property of any person under execution except that of the judgment debtor.
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, Matrai. Respondents allege that the lease of the property in Lanka Drive redounded to the
benefit of the family. By no stretch of one's imagination can it be concluded that said debt/obligation was incurred for the
benefit of the conjugal partnership or that some advantage accrued to the welfare of the family. In BA Finance
Corporation v. Court of Appeals, the Court ruled that the petitioner cannot enforce the obligation contracted
by Augusto Yulo against his conjugal properties with respondent Lily Yulo because it was not established that the
obligation contracted by the husband redounded to the benefit of the conjugal partnership under Article 161 of the Civil
Code. The Court stated:
In the present case, the obligation which the petitioner is seeking to enforce against the conjugal
property managed by the private respondent Lily Yulo was undoubtedly contracted byAugusto Yulo for his
own benefit because at the time he incurred the obligation he had already abandoned his family and had
left their conjugal home. Worse, he made it appear that he was duly authorized by his wife in behalf of A &
L Industries, to procure such loan from the petitioner. Clearly, to make A & L Industries liable now for the
said loan would be unjust and contrary to the express provision of the Civil Code. (Emphasis supplied)
Similarly in this case, Michele, who was then already living separately from Cleodualdo, rented the house in Lanka
Drive for her and Matrais own benefit. In fact, when they entered into the lease agreement, Michele and Matrai purported
themselves to be husband and wife. Respondents bare allegation that petitioners lived with Michele on the leased
property is not sufficient to support the conclusion that the judgment debt against Michele and Matrai in the ejectment suit
redounded to the benefit of the family of Michele and Cleodualdo and petitioners. Thus, in Homeowners Savings and
Loan Bank v. Dailo, the Court stated thus:
x x x Ei incumbit probatio qui dicit, non qui negat (he who asserts, not he who denies, must
prove). Petitioners sweeping conclusion that the loan obtained by the late Marcelino Dailo, Jr. to finance
the construction of housing units without a doubt redounded to the benefit of his family, without adducing
adequate proof, does not persuade this Court. Other than petitioners bare allegation, there is nothing
from the records of the case to compel a finding that, indeed, the loan obtained by the
late Marcelino Dailo, Jr. redounded to the benefit of the family. Consequently, the conjugal partnership
cannot be held liable for the payment of the principal obligation.

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.
In justifying the levy against the property, the RTC went over the Compromise Agreement as embodied in the Partial
Decision dated November 29, 2000. Oddly, the RTC ruled that there was no effective transfer of ownership to the
siblings Cleodia and Ceamantha Francisco. In the same breath, the RTC astonishingly ruled that Michele is now the
owner of the property inasmuch as Cleodualdo already waived his rights over the property. The Compromise Agreement
must not be read piece-meal but in its entirety. It is provided therein, thus:
7. In
their
desire
to
manifest
their
genuine
concern
for
their
children, Cleodia and Ceamantha, Cleodualdo and Michelle have voluntarily agreed to herein set forth
their obligations, rights and responsibilities on matters relating to their children's support, custody,
visitation, as well as to the dissolution of their conjugal partnership of gains as follows:
(a) Title and ownership of the conjugal property consisting of a house and
lot located in Ayala Alabang, Muntinlupa, Metro Manila shall be transferred by way
of a deed of donation to Cleodia and Ceamantha, as co-owners, when they reach
nineteen (19) and eighteen (18) years old, respectively, subject to the following
conditions:
a.1. Cleodualdo shall retain usufructuary rights over the property until he reaches
the age of 65 years old, with the following rights and responsibilities:
x x x x (Emphasis supplied)
From the foregoing, it is clear that both Michele and Cleodualdo have waived their title to and ownership of the
house and lot in Taal St. in favor of petitioners. The property should not have been levied and sold at execution sale, for
lack of legal basis.
Verily, the CA committed an error in sustaining the RTC Orders dated June 4, 2003 and July 31, 2003.
WHEREFORE, the petition is GRANTED. The assailed Court of Appeals Decision dated April 30, 2007,
affirming RTC Orders dated June 4, 2003 and July 31, 2003, are hereby NULLIFIED and SET ASIDE. The temporary
restraining order issued by the Court per Resolution of July 11, 2007 is hereby made PERMANENT.
Costs against respondents.
SO ORDERED.

BUADO VS NICOL
TINGA, J.:
Before this Court is a petition for certiorari assailing the Decision of the Court of Appeals in CA-G.R. CV No. 47029 and its
Resolution denying the motion for reconsideration thereof.
The case stemmed from the following factual backdrop:
On 30 April 1984, Spouses Roberto and Venus Buado (petitioners) filed a complaint for damages against Erlinda Nicol
(Erlinda) with Branch 19 of the Regional Trial Court (RTC) of Bacoor, Cavite, docketed as Civil Case No. 84-33. Said
action originated from Erlinda Nicols civil liability arising from the criminal offense of slander filed against her by
petitioners.
On 6 April 1987, the trial court rendered a decision ordering Erlinda to pay damages. The dispositive portion reads:
Wherefore, judgment is hereby rendered in favor of the plaintiff[s] and against defendant ordering the latter to pay the
former the amount of thirty thousand (P30,000.00) pesos as moral damages, five thousand (P5,000.00) pesos as
attorneys fees and litigation expenses, another five thousand (P5,000.00) pesos as exemplary damages and the cost of
suit.
Said decision was affirmed, successively, by the Court of Appeals and this Court. It became final and executory on 5
March 1992.
On 14 October 1992, the trial court issued a writ of execution, a portion of which provides:
Now, therefore, you are commanded that of the goods and chattels of the defendant Erlinda Nicol, or from her estates or
legal heirs, you cause the sum in the amount of forty thousand pesos (P40,000.00), Philippine Currency, representing the

moral damages, attorneys fees and litigation expenses and exemplary damages and the cost of suit of the plaintiff aside
from your lawful fees on this execution and do likewise return this writ into court within sixty (60) days from date, with your
proceedings endorsed hereon.
But if sufficient personal property cannot be found whereof to satisfy this execution and lawful fees thereon, then you are
commanded that of the lands and buildings of said defendant you make the said sum of money in the manner required by
the Rules of Court, and make return of your proceedings with this writ within sixty (60) days from date.
Finding Erlinda Nicols personal properties insufficient to satisfy the judgment, the Deputy Sheriff issued a notice of levy
on real property on execution addressed to the Register of Deeds of Cavite. The notice of levy was annotated on the
Transfer Certificate of Title No. T-125322.
On 20 November 1992, a notice of sheriffs sale was issued.
Two (2) days before the public auction sale on 28 January 1993, an affidavit of third-party claim from one Arnulfo F. Fulo
was received by the deputy sheriff prompting petitioners to put up a sheriffs indemnity bond. The auction sale proceeded
with petitioners as the highest bidder.
On 4 February 1993, a certificate of sale was issued in favor of petitioners.
Almost a year later on 2 February 1994, Romulo Nicol (respondent), the husband of Erlinda Nicol, filed a complaint for
annulment of certificate of sale and damages with preliminary injunction against petitioners and the deputy sheriff.
Respondent, as plaintiff therein, alleged that the defendants, now petitioners, connived and directly levied upon and
execute his real property without exhausting the personal properties of Erlinda Nicol. Respondent averred that there was
no proper publication and posting of the notice of sale. Furthermore, respondent claimed that his property which was
valued at P500,000.00 was only sold at a "very low price" of P51,685.00, whereas the judgment obligation of Erlinda Nicol
was only P40,000.00. The case was assigned to Branch 21 of the RTC of Imus, Cavite.
In response, petitioners filed a motion to dismiss on the grounds of lack of jurisdiction and that they had acted on the basis
of a valid writ of execution. Citing De Leon v. Salvador, petitioners claimed that respondent should have filed the case
with Branch 19 where the judgment originated and which issued the order of execution, writ of execution, notice of levy
and notice of sheriffs sale.
In an Order dated 18 April 1994, the RTC dismissed respondents complaint and ruled that Branch 19 has jurisdiction
over the case, thus:
As correctly pointed out by the defendants, any flaw in the implementation of the writ of execution by the implementing
sheriff must be brought before the court issuing the writ of execution. Besides, there are two (2) remedies open to the
plaintiff, if he feels that the property being levied on belongs to him and not to the judgment debtor. The first remedy is to
file a third-party claim. If he fails to do this, a right is reserved to him to vindicate his claim over the property by any proper
action. But certainly, this is not the proper action reserved to the plaintiff to vindicate his claim over the property in
question to be ventilated before this court. As earlier stated, this case should have been addressed to Branch 19, RTC
Bacoor as it was that court which issued the writ of execution.
Respondent moved for reconsideration but it was denied on 26 July 1994.
On appeal, the Court of Appeals reversed the trial court and held that Branch 21 has jurisdiction to act on the complaint
filed by appellant. The dispositive portion reads:
WHEREFORE, the Orders appealed from are hereby REVERSED and SET ASIDE. This case is REMANDED to the
Regional Trial Court of Imus, Cavite, Branch 21 for further proceedings.
SO ORDERED.
Petitioners motion for reconsideration was denied on 23 August 2000. Hence, the instant petition attributing grave abuse
of discretion on the part of the Court of Appeals.
A petition for certiorari is an extraordinary remedy that is adopted to correct errors of jurisdiction committed by the lower
court or quasi-judicial agency, or when there is grave abuse of discretion on the part of such court or agency amounting to
lack or excess of jurisdiction. Where the error is not one of jurisdiction, but of law or fact which is a mistake of judgment,
the proper remedy should be appeal. In addition, an independent action for certiorari may be availed of only when there is
no appeal or any plain, speedy and adequate remedy in the ordinary course of law.
Nowhere in the petition was it shown that the jurisdiction of the Court of Appeals was questioned. The issue devolves on
whether the husband of the judgment debtor may file an independent action to protect the conjugal property subject to
execution. The alleged error therefore is an error of judgment which is a proper subject of an appeal.
Nevertheless, even if we were to treat this petition as one for review, the case should still be dismissed on substantive
grounds.
Petitioners maintain that Branch 19 retained jurisdiction over its judgment to the exclusion of all other co-ordinate courts
for its execution and all incidents thereof, in line with De Leon v. Salvador. Petitioners insist that respondent, who is the
husband of the judgment debtor, is not the "third party" contemplated in Section 17 (now Section 16), Rule 39 of the Rules

of Court, hence a separate action need not be filed. Furthermore, petitioners assert that the obligation of the wife
redounded to the benefit of the conjugal partnership and cited authorities to the effect that the husband is liable for the tort
committed by his wife.
Respondent on the other hand merely avers that the decision of the Court of Appeals is supported by substantial evidence
and in accord with law and jurisprudence.
Verily, the question of jurisdiction could be resolved through a proper interpretation of Section 16, Rule 39 of the Rules of
Court, which reads:
Sec. 16. Proceedings where property claimed by third person.
If the property levied on is claimed by any person other than the judgment obligor or his agent, and such person makes an
affidavit of his title thereto or right to the possession thereof, stating the grounds of such right or title, and serves the same
upon the officer making the levy and a copy thereof upon the judgment obligee, the officer shall not be bound to keep the
property, unless such judgment obligee, on demand of the officer, files a bond approved by the court to indemnify the
third-party claimant in a sum not less than the value of the property levied on. In case of disagreement as to such value,
the same shall be determined by the court issuing the writ of execution. No claim for damages for the taking or keeping of
the property may be enforced against the bond unless the action therefor is filed within one hundred twenty (120) days
from the date of the filing of the bond.
The officer shall not be liable for damages for the taking or keeping of the property, to any third-party claimant if such bond
is filed. Nothing herein contained shall prevent such claimant or any third person from vindicating his claim to the property
in a separate action, or prevent the judgment obligee from claiming damages in the same or a separate action against a
third-party claimant who filed a frivolous or plainly spurious claim.
When the writ of execution is issued in favor of the Republic of the Philippines, or any officer duly representing it, the filing
of such bond shall not be required, and in case the sheriff or levying officer is sued for damages as a result of the levy, he
shall be represented by the Solicitor General and if held liable therefor, the actual damages adjudged by the court shall be
paid by the National Treasurer out of such funds as may be appropriated for the purpose. (Emphasis Supplied)
Apart from the remedy of terceria available to a third-party claimant or to a stranger to the foreclosure suit against the
sheriff or officer effecting the writ by serving on him an affidavit of his title and a copy thereof upon the judgment creditor, a
third-party claimant may also resort to an independent separate action, the object of which is the recovery of ownership or
possession of the property seized by the sheriff, as well as damages arising from wrongful seizure and detention of the
property. If a separate action is the recourse, the third-party claimant must institute in a forum of competent jurisdiction an
action, distinct and separate from the action in which the judgment is being enforced, even before or without need of filing
a claim in the court that issued the writ.1awphi1.zw+
A third-party claim must be filed a person other than the judgment debtor or his agent. In other words, only a stranger to
the case may file a third-party claim.
This leads us to the question: Is the husband, who was not a party to the suit but whose conjugal property is being
executed on account of the other spouse being the judgment obligor, considered a "stranger?"
In determining whether the husband is a stranger to the suit, the character of the property must be taken into account. In
Mariano v. Court of Appeals, which was later adopted in Spouses Ching v. Court of Appeals, this Court held that the
husband of the judgment debtor cannot be deemed a "stranger" to the case prosecuted and adjudged against his wife for
an obligation that has redounded to the benefit of the conjugal partnership. On the other hand, in Naguit v. Court of
Appeals and Sy v. Discaya, the Court stated that a spouse is deemed a stranger to the action wherein the writ of
execution was issued and is therefore justified in bringing an independent action to vindicate her right of ownership over
his exclusive or paraphernal property.lawphil.net
Pursuant to Mariano however, it must further be settled whether the obligation of the judgment debtor redounded to the
benefit of the conjugal partnership or not.
Petitioners argue that the obligation of the wife arising from her criminal liability is chargeable to the conjugal partnership.
We do not agree.
There is no dispute that contested property is conjugal in nature. Article 122 of the Family Code explicitly provides that
payment of personal debts contracted by the husband or the wife before or during the marriage shall not be charged to
the conjugal partnership 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 orquasidelict is chargeable to the absolute community of property, in the absence or insufficiency of the exclusive property of the
debtor-spouse, the same advantage is not accorded in the system of conjugal partnership of gains. The conjugal
partnership of gains has no duty to make advance payments for the liability of the debtor-spouse.
Parenthetically, by no stretch of imagination can it be concluded that the civil obligation arising from the crime of slander
committed by Erlinda redounded to the benefit of the conjugal partnership.

To reiterate, conjugal property cannot be held liable for the personal obligation contracted by one spouse, unless some
advantage or benefit is shown to have accrued to the conjugal partnership.
In Guadalupe v. Tronco, this Court held that the car which was claimed by the third party complainant to be conjugal
property was being levied upon to enforce "a judgment for support" filed by a third person, the third-party claim of the wife
is proper since the obligation which is personal to the husband is chargeable not on the conjugal property but on his
separate property.
Hence, the filing of a separate action by respondent is proper and jurisdiction is thus vested on Branch 21. Petitioners
failed to show that the Court of Appeals committed grave abuse of discretion in remanding the case toBranch 21 for
further proceedings.
WHEREFORE, the petition is DISMISSED. The Decision of the Court of Appeals is AFFIRMED. Costs against petitioners.
SO ORDERED.

PANA VS HEIRS OF JUANTE


ABAD, J.:
This case is about the propriety of levy and execution on conjugal properties where one of the spouses has been found
guilty of a crime and ordered to pay civil indemnities to the victims' heirs.
The Facts and the Case
The prosecution accused petitioner Efren Pana (Efren), his wife Melecia, and others of murder before the. Regional Trial
Court (RTC) of Surigao City in Criminal Cases 4232 and 4233.
On July 9, 1997 the RTC rendered a consolidated decision acquitting Efren of the charge for insufficiency of evidence but
finding Melecia and another person guilty as charged and sentenced them to the penalty of death. The RTC ordered those
found guilty to pay each of the heirs of the victims, jointly and severally, P50,000.00 as civil indemnity, P50,000.00 each
as moral damages, and P150,000.00 actual damages.
On appeal to this Court, it affirmed on May 24, 2001 the conviction of both accused but modified the penalty toreclusion
perpetua. With respect to the monetary awards, the Court also affirmed the award of civil indemnity and moral damages
but deleted the award for actual damages for lack of evidentiary basis. In its place, however, the Court made an award of
P15,000.00 each by way of temperate damages. In addition, the Court awarded P50,000.00 exemplary damages per
victim to be paid solidarily by them. The decision became final and executory on October 1, 2001.
Upon motion for execution by the heirs of the deceased, on March 12, 2002 the RTC ordered the issuance of the
writ, resulting in the levy of real properties registered in the names of Efren and Melecia. Subsequently, a notice of
levy and a notice of sale on execution were issued.
On April 3, 2002, petitioner Efren and his wife Melecia filed a motion to quash the writ of execution, claiming that the
levied properties were conjugal assets, not paraphernal assets of Melecia. On September 16, 2002 the RTC denied the
motion. The spouses moved for reconsideration but the RTC denied the same on March 6, 2003.
Claiming that the RTC gravely abused its discretion in issuing the challenged orders, Efren filed a petition
forcertiorari before the Court of Appeals (CA). On January 29, 2004 the CA dismissed the petition for failure to sufficiently
show that the RTC gravely abused its discretion in issuing its assailed orders. It also denied Efrens motion for
reconsideration, prompting him to file the present petition for review on certiorari.
The Issue Presented
The sole issue presented in this case is whether or not the CA erred in holding that the conjugal properties of spouses
Efren and Melecia can be levied and executed upon for the satisfaction of Melecias civil liability in the murder case.
Ruling of the Court
To determine whether the obligation of the wife arising from her criminal liability is chargeable against the properties of the
marriage, the Court has first to identify the spouses property relations.
Efren claims that his marriage with Melecia falls under the regime of conjugal partnership of gains, given that they were
married prior to the enactment of the Family Code and that they did not execute any prenuptial agreement.Although the
heirs of the deceased victims do not dispute that it was the Civil Code, not the Family Code, which governed the marriage,
they insist that it was the system of absolute community of property that applied to Efren and Melecia. The reasoning
goes:
Admittedly, the spouses were married before the effectivity of the Family Code. But that fact does not prevent the
application of [A]rt. 94, last paragraph, of the Family Code because their property regime is precisely governed by the law
on absolute community. This finds support in Art. 256 of the Family Code which states:

"This code shall have retroactive effect in so far as it does not prejudice or impair vested or acquired rights in accordance
with the Civil Code or other laws."
None of the spouses is dead. Therefore, no vested rights have been acquired by each over the properties of the
community. Hence, the liabilities imposed on the accused-spouse may properly be charged against the community as
heretofore discussed.
The RTC applied the same reasoning as above. Efren and Melecias property relation was admittedly conjugal under the
Civil Code but, since the transitory provision of the Family Code gave its provisions retroactive effect if no vested or
acquired rights are impaired, that property relation between the couple was changed when the Family Code took effect in
1988. The latter code now prescribes in Article 75 absolute community of property for all marriages unless the parties
entered into a prenuptial agreement. As it happens, Efren and Melecia had no prenuptial agreement. The CA agreed with
this position.
Both the RTC and the CA are in error on this point. While it is true that the personal stakes of each spouse in their
conjugal assets are inchoate or unclear prior to the liquidation of the conjugal partnership of gains and, therefore, none of
them can be said to have acquired vested rights in specific assets, it is evident that Article 256 of the Family Code does
not intend to reach back and automatically convert into absolute community of property relation all conjugal partnerships
of gains that existed before 1988 excepting only those with prenuptial agreements.
The Family Code itself provides in Article 76 that marriage settlements cannot be modified except prior to marriage.
Art. 76. In order that any modification in the marriage settlements may be valid, it must be made before the celebration of
the marriage, subject to the provisions of Articles 66, 67, 128, 135 and 136.
Clearly, therefore, the conjugal partnership of gains that governed the marriage between Efren and Melecia who were
married prior to 1988 cannot be modified except before the celebration of that marriage.
Post-marriage modification of such settlements can take place only where: (a) the absolute community or conjugal
partnership was dissolved and liquidated upon a decree of legal separation; (b) the spouses who were legally separated
reconciled and agreed to revive their former property regime; (c) judicial separation of property had been had on the
ground that a spouse abandons the other without just cause or fails to comply with his obligations to the family; (d) there
was judicial separation of property under Article 135; (e) the spouses jointly filed a petition for the voluntary dissolution of
their absolute community or conjugal partnership of gains. None of these circumstances exists in the case of Efren and
Melecia.
What is more, under the conjugal partnership of gains established by Article 142 of the Civil Code, the husband and the
wife place only the fruits of their separate property and incomes from their work or industry in the common fund. Thus:
Art. 142. By means of the conjugal partnership of gains the husband and wife place in a common fund the fruits of their
separate property and the income from their work or industry, and divide equally, upon the dissolution of the marriage or of
the partnership, the net gains or benefits obtained indiscriminately by either spouse during the marriage.
This means that they continue under such property regime to enjoy rights of ownership over their separate properties.
Consequently, to automatically change the marriage settlements of couples who got married under the Civil Code into
absolute community of property in 1988 when the Family Code took effect would be to impair their acquired or vested
rights to such separate properties.
The RTC cannot take advantage of the spouses loose admission that absolute community of property governed their
property relation since the record shows that they had been insistent that their property regime is one of conjugal
partnership of gains. No evidence of a prenuptial agreement between them has been presented.
What is clear is that Efren and Melecia were married when the Civil Code was still the operative law on marriages. The
presumption, absent any evidence to the contrary, is that they were married under the regime of the conjugal partnership
of gains. Article 119 of the Civil Code thus provides:
Art. 119. The future spouses may in the marriage settlements agree upon absolute or relative community of property, or
upon complete separation of property, or upon any other regime. In the absence of marriage settlements, or when the
same are void, the system of relative community or conjugal partnership of gains as established in this Code, shall govern
the property relations between husband and wife.
Of course, the Family Code contains terms governing conjugal partnership of gains that supersede the terms of the
conjugal partnership of gains under the Civil Code. Article 105 of the Family Code states:
"x x x x
The provisions of this Chapter [on the Conjugal Partnership of Gains] shall also apply to conjugal partnerships of gains
already established between spouses before the effectivity of this Code, without prejudice to vested rights already
acquired in accordance with the Civil Code or other laws, as provided in Article 256."

Consequently, the Court must refer to the Family Code provisions in deciding whether or not the conjugal properties of
Efren and Melecia may be held to answer for the civil liabilities imposed on Melecia in the murder case. Its Article 122
provides:
Art. 122. The payment of personal debts contracted by the husband or the wife before or during the marriage shall not be
charged to the conjugal properties partnership except insofar as they redounded to the benefit of the family.
Neither shall the fines and pecuniary indemnities imposed upon them be charged to the partnership.
However, the payment of personal debts contracted by either spouse before the marriage, that of fines and indemnities
imposed upon them, as well as the support of illegitimate children of either spouse, may be enforced against the
partnership assets after the responsibilities enumerated in the preceding Article have been covered, if the spouse who is
bound should have no exclusive property or if it should be insufficient; but at the time of the liquidation of the partnership,
such spouse shall be charged for what has been paid for the purpose above-mentioned.
Since Efren does not dispute the RTCs finding that Melecia has no exclusive property of her own, the above applies. The
civil indemnity that the decision in the murder case imposed on her may be enforced against their conjugal assets after
the responsibilities enumerated in Article 121 of the Family Code have been covered.Those responsibilities are as follows:
Art. 121. The conjugal partnership shall be liable for:
(1) The support of the spouse, their common children, and the legitimate children of either spouse; however, the
support of illegitimate children shall be governed by the provisions of this Code on Support;
(2) All debts and obligations contracted during the marriage by the designated administrator-spouse for the benefit
of the conjugal partnership of gains, or by both spouses or by one of them with the consent of the other;
(3) Debts and obligations contracted by either spouse without the consent of the other to the extent that the family
may have benefited;
(4) All taxes, liens, charges, and expenses, including major or minor repairs upon the conjugal partnership
property;
(5) All taxes and expenses for mere preservation made during the marriage upon the separate property of either
spouse;
(6) Expenses to enable either spouse to commence or complete a professional, vocational, or other activity for
self-improvement;
(7) Antenuptial debts of either spouse insofar as they have redounded to the benefit of the family;
(8) The value of what is donated or promised by both spouses in favor of their common legitimate children for the
exclusive purpose of commencing or completing a professional or vocational course or other activity for selfimprovement; and
(9) Expenses of litigation between the spouses unless the suit is found to be groundless.
If the conjugal partnership is insufficient to cover the foregoing liabilities, the spouses shall be solidarily liable for the
unpaid balance with their separate properties.1wphi1
Contrary to Efrens contention, Article 121 above allows payment of the criminal indemnities imposed on his wife, Melecia,
out of the partnership assets even before these are liquidated. Indeed, it states that such indemnities "may be enforced
against the partnership assets after the responsibilities enumerated in the preceding article have been covered."[26] No
prior liquidation of those assets is required. This is not altogether unfair since Article 122 states that "at the time of
liquidation of the partnership, such [offending] spouse shall be charged for what has been paid for the purposes abovementioned."
WHEREFORE, the Court AFFIRMS with MODIFICATION the Resolutions of the Court of Appeals in CA-G.R. SP 77198
dated January 29, 2004 and May 14, 2004. The Regional Trial Court of Surigao City, Branch 30, shall first ascertain that,
in enforcing the writ of execution on the conjugal properties of spouses Efren and Melecia Pana for the satisfaction of the
indemnities imposed by final judgment on the latter accused in Criminal Cases 4232 and 4233, the responsibilities
enumerated in Article 121 of the Family Code have been covered.
SO ORDERED.

C. Administration, Enjoyment, and Disposition of the Conjugal Property


a. Under the Civil Code

BA FINANCE VS CA

GUTIERREZ, JR., J.:


This is a petition for review seeking to set aside the decision of the Court of Appeals which affirmed the decision of the
then Court of First Instance of Manila, dismissing the complaint instituted by the petitioner and ordering it to pay damages
on the basis of the private respondent's counterclaim.
On July 1, 1975, private respondent Augusto Yulo secured a loan from the petitioner in the amount of P591,003.59 as
evidenced by a promissory note he signed in his own behalf and as representative of the A & L Industries. Respondent
Yulo presented an alleged special power of attorney executed by his wife, respondent Lily Yulo, who manages A & L
Industries and under whose name the said business is registered, purportedly authorizing Augusto Yulo to procure the
loan and sign the promissory note. About two months prior to the loan, however, Augusto Yulo had already left Lily Yulo
and their children and had abandoned their conjugal home. When the obligation became due and demandable, Augusto
Yulo failed to pay the same.
On October 7, 1975, the petitioner filed its amended complaint against the spouses Augusto and Lily Yulo on the basis of
the promissory note. It also prayed for the issuance of a writ of attatchment alleging that the said spouses were guilty of
fraud in contracting the debt upon which the action was brought and that the fraud consisted of the spouses' inducing the
petitioner to enter into a contract with them by executing a Deed of Assignment in favor of the petitioner, assigning all their
rights, titles and interests over a construction contract executed by and between the spouses and A. Soriano Corporation
on June 19, 1974 for a consideration of P615,732.50 when, in truth, the spouses did not have any intention of remitting
the proceeds of the said construction contract to the petitioner because despite the provisions in the Deed of Assignment
that the spouses shall, without compensation or costs, collect and receive in trust for the petitioner all payments made
upon the construction contract and shall remit to the petitioner all collections therefrom, the said spouses failed and refuse
to remit the collections and instead, misappropriated the proceeds for their own use and benefit, without the knowledge or
consent of the petitioner.
The trial court issued the writ of attachment prayed for thereby enabling the petitioner to attach the properties of A & L
Industries. Apparently not contented with the order, the petitioner filed another motion for the examination of attachment
debtor, alleging that the properties attached by the sheriff were not sufficient to secure the satisfaction of any judgment
that may be recovered by it in the case. This was likewise granted by the court.
Private respondent Lily Yulo filed her answer with counterclaim, alleging that although Augusta Yulo and she are husband
and wife, the former had abandoned her and their children five (5) months before the filing of the complaint; that they were
already separated when the promissory note was executed; that her signature in the special power of attorney was forged
because she had never authorized Augusto Yulo in any capacity to transact any business for and in behalf of A & L
Industries, which is owned by her as a single proprietor, that she never got a single centavo from the proceeds of the loan
mentioned in the promissory note; and that as a result of the illegal attachment of her properties, which constituted the
assets of the A & L Industries, the latter closed its business and was taken over by the new owner.
After hearing, the trial court rendered judgment dismissing the petitioner's complaint against the private respondent Lily
Yulo and A & L Industries and ordering the petitioner to pay the respondent Lily Yulo P660,000.00 as actual damages;
P500,000.00 as unrealized profits; P300,000.00 as exemplary damages; P30,000.00 as and for attorney's fees; and to
pay the costs.
The petitioner appealed. The Court of Appeals affirmed the trial court's decision except for the exemplary damages which
it reduced from P300,000.00 to P150,000.00 and the attorney's fees which were reduced from P30,000.00 to P20,000.00.
In resolving the question of whether or not the trial court erred in holding that the signature of respondent Lily Yulo in the
special power of attorney was forged, the Court of Appeals said:
The crucial issue to be determined is whether or not the signatures of the appellee Lily Yulo in Exhibits B
and B-1 are forged. Atty. Crispin Ordoa, the Notary Public, admitted in open court that the parties in the
subject documents did not sign their signatures in his presence. The same were already signed by the
supposed parties and their supposed witnesses at the time they were brought to him for ratification. We
quote from the records the pertinent testimony of Atty. Ordoa, thus:
Q. This document marked as Exhibit B-1, when this was presented to you by that
common friend, June Enriquez, it was already typewritten, it was already accomplished,
all typewritten.?
A. Yes, sir.
Q And the parties had already affixed their signatures in this document?
A. Yes, sir.
Q. In this document marked as Exhibit B although it appears here that this is an
acknowledgment, you have not stated here that the principal actually acknowledged this
document to be her voluntary act and deed?

A This in one of those things that escaped my attention. Actually I have not gone over the
second page. I believed it was in order I signed it. (TSN pp. 13-14, Hearing of Nov. 26,
1976).
The glaring admission by the Notary Public that he failed to state in the acknowledgment portion of Exhibit
B-1 that the appellee Lily Yulo acknowledged the said document to be her own voluntary act and deed, is
a very strong and commanding circumstance to show that she did not appear personally before the said
Notary Public and did not sign the document.
Additionally, the Notary Public admitted that, while June Enriquez is admittedly a mutual friend of his and
the defendant Augusta Yulo, and who is also an instrumental witness in said Exhibit B-1., he could not
recognize or tell which of the two signatures appearing therein, was the signature of this June Enriquez.
Furthermore, as the issue is one of credibility of a witness, the findings and conclusions of the trial court
before whom said witness, Atty. Crispin Ordoa, the Notary Public before whom the questioned document
was supposedly ratified and acknowledged, deserve great respect and are seldom disturbed on appeal by
appellate tribunals, since it is in the best and peculiar advantage of determining and observing the
conduct, demeanor and deportment of a particular witness while he is testifying in court, an opportunity
not enjoyed by the appellate courts who merely have to rely on the recorded proceedings which
transpired in the court below, and the records are bare of any circumstance of weight, which the trial court
had overlooked and which if duly considered, may radically affect the outcome of the case.
On the other hand, the appellee Lily Yulo, to back up her claim of forgery of her signature in Exhibit B-1,
presented in court a handwriting expert witness in the person of Police Captain Yakal Giron of the
Integrated National Police Training Command, and who is also a Document Examiner of the same
Command's Crime Laboratory at Fort Bonifacio, Metro Manila. His experience as an examiner of
questioned and disputed documents, in our mind, is quite impressive. To qualify him as a handwriting
expert, he declared that he underwent extensive and actual studies and examination of disputed or
questioned document, both at the National Bureau of Investigation Academy and National Bureau of
Investigation Questioned Document Laboratory, respectively, from July 1964, up to his appointment as
Document Examiner in June, 1975, and, to further his experience along this line, he attended the 297th
Annual Conference of the American Society of Questioned Docurnent Examiners held at Seattle,
Washington, in August 1971, as a representative of the Philippines, and likewise conducted an
observation of the present and modern trends of crime laboratories in the West Coast, U.S.A., in 1971;
that he likewise had conducted actual tests and examination of about 100,000 documents, as requested
by the different courts, administrative, and governmental agencies of the Government, substantial
portions of which relate to actual court cases.
In concluding that the signatures of the appellee Lily Yulo, in the disputed document in question (Exh. B1), were all forgeries, and not her genuine signature, the expert witness categorically recited and specified
in open court what he observed to be about twelve (12) glaring and material significant differences, in his
comparison of the signatures appearing in the genuine specimen signatures of the said appellee and with
those appearing in the questioned document (Exhibit B-1). Indeed, we have likewise seen the supposed
notable differences, found in the standard or genuine signatures of the appellee which were lifted and
obtained in the official files of the government, such as the Bureau of Internal Revenue on her income tax
returns, as compared to the pretended signature of the appellee appearing in Exhibits B, B-1. It is also
noteworthy to mention that the appellant did not even bother to conduct a cross-examination of the
handwriting expert witness, Capt. Giron, neither did the appellant present another handwriting expert, at
least to counter-act or balance the appellee's handwriting expert.
Prescinding from the foregoing facts, we subscribe fully to the lower court's observations that the
signatures of the appellee Lily Yulo in the questioned document (Exh. B-1) were forged. Hence, we find
no factual basis to disagree. (pp. 28-30, Rollo)
As to the petitioner's contention that even if the signature of Lily Yulo was forged or even if the attached properties were
her exclusive property, the same can be made answerable to the obligation because the said properties form part of the
conjugal partnership of the spouses Yulo, the appellate court held that these contentions are without merit because there
is strong preponderant evidence to show that A & L Industries belongs exclusively to respondent Lily Yulo, namely: a) The
Certificate of Registration of A & L Industries, issued by the Bureau of Commerce, showing that said business is a single
proprietorship, and that the registered owner thereof is only Lily Yulo; b) The Mayor's Permit issued in favor of A & L
Industries, by the Caloocan City Mayor's Office showing compliance by said single proprietorship company with the City
Ordinance governing business establishments; and c) The Special Power of Attorney itself, assuming but without
admitting its due execution, is tangible proof that Augusto Yulo has no interest whatsoever in the A & L Industries,

otherwise, there would have been no necessity for the Special Power of Attorney if he is a part owner of said single
proprietorship.
With regard to the award of damages, the Court of Appeals affirmed the findings of the trial court that there was bad faith
on the part of the petitioner as to entitle the private respondent to damages as shown not only by the fact that the
petitioner did not present the Deed of Assignment or the construction agreement or any evidence whatsoever to support
its claim of fraud on the part of the private respondent and to justify the issuance of a preliminary attachment, but also by
the following findings:
Continuing and elaborating further on the appellant's mala fide actuations in securing the writ of
attachment, the lower court stated as follows:
Plaintiff not satisfied with the instant case where an order for attachment has already
been issued and enforced, on the strength of the same Promissory Note (Exhibit"A"),
utilizing the Deed of Chattel Mortgage (Exhibit "4"), filed a foreclosure proceedings before
the Office of the Sheriff of Caloocan (Exhibit"6") foreclosing the remaining properties
found inside the premises formerly occupied by the A & L Industries. A minute
examination of Exhibit "4" will show that the contracting parties thereto, as appearing in
par. 1 thereof, are Augusto Yulo, doing business under the style of A & L Industries
(should be A & L Glass Industries Corporation), as mortgagor and BA Finance
Corporation as mortgagee, thus the enforcement of the Chattel Mortgage against the
property of A & L Industries exclusively owned by Lily T. Yulo appears to be without any
factual or legal basis whatsoever. The chattel mortgage, Exhibit "4" and the Promissory
Note, Exhibit A, are based on one and the same obligation. Plaintiff tried to enforce as it
did enforce its claim into two different modes a single obligation.
Aware that defendant Lily Yulo, filed a Motion to Suspend Proceedings by virtue of a
complaint she filed with the Court of First Instance of Caloocan, seeking annulment of the
Promissory Note, the very basis of the plaintiff in filing this complaint, immediately after
the day it filed a Motion for the Issuance of an Alias Writ of Preliminary Attachment . .
.Yet, inspite of the knowledge and the filing of this Motion to Suspend Proceedings, the
Plaintiff still filed a Motion for the Issuance of a Writ of Attachment dated February 6,
1976 before this court. To add insult to injury, plaintiff even filed a Motion for Examination
of the Attachment Debtor, although aware that Lily Yulo had already denied participation
in the execution of Exhibits "A" and "B". These incidents and actions taken by plaintiff, to
the thinking of the court, are sufficient to prove and establish the element of bad faith and
malice on the part of plaintiff which may warrant the award of damages in favor of
defendant Lily Yulo. (Ibid., pp. 102-103).<re||an1w>
Indeed, the existence of evident bad faith on the appellant's part in proceeding against
the appellee Lily Yulo in the present case, may likewise be distressed on the fact that its
officer Mr. Abraham Co, did not even bother to demand the production of at least the
duplicate original of the Special Power of Attorney (Exhibit B) and merely contended
himself with a mere xerox copy thereof, neither did he require a more specific authority
from the A & L Industries to contract the loan in question, since from the very content and
recitals of the disputed document, no authority, express or implied, has been delegated or
granted to August Yulo to contract a loan, especially with the appellant. (pp. 33-34, Rollo)
Concerning the actual damages, the appellate court ruled that the petitioner should have presented evidence to disprove
or rebut the private respondent's claim but it remained quiet and chose not to disturb the testimony and the evidence
presented by the private respondent to prove her claim.
In this petition for certiorari, the petitioner raises three issues. The first issue deals with the appellate court's affirmance of
the trial court's findings that the signature of the private respondent on the Special Power of Attorney was forged.
According to the petitioner, the Court of Appeals disregarded the direct mandate of Section 23, Rule 132 of the Rules of
Court which states in part that evidence of handwriting by comparison may be made "with writings admitted or treated as
genuine by the party against whom the evidence is offered, or proved to be genuine to the satisfaction of the judge," and
that there is no evidence on record which proves or tends to prove the genuineness of the standards used.
There is no merit in this contention.
The records show that the signatures which were used as "standards" for comparison with the alleged signature of the
private respondent in the Special Power of Attorney were those from the latter's residence certificates in the years 1973,
1974 and 1975, her income tax returns for the years 1973 and 1975 and from a document on long bond paper dated May
18, 1977. Not only were the signatures in the foregoing documents admitted by the private respondent as hers but most of

the said documents were used by the private respondent in her transactions with the government. As was held in the case
of Plymouth Saving & Loan Assn. No. 2 v. Kassing (125 NE 488, 494):
We believe the true rule deduced from the authorities to be that the genuineness of a "standard" writing
may be established (1) by the admission of the person sought to be charged with the disputed writing
made at or for the purposes of the trial or by his testimony; (2) by witnesses who saw the standards
written or to whom or in whose hearing the person sought to be charged acknowledged the writing
thereof; (3) by evidence showing that the reputed writer of the standard has acquiesced in or recognized
the same, or that it has been adopted and acted upon by him his business transactions or other
concerns....
Furthermore, the judge found such signatures to be sufficient as standards. In the case of Taylor-Wharton Iron & Steel Co.
v. Earnshaw (156 N.E. 855, 856), it was held:
When a writing is offered as a standard of comparison it is for the presiding judge to decide whether it is
the handwriting of the party to be charged. Unless his finding is founded upon error of law, or upon
evidence which is, as matter of law, insufficient to justify the finding, this court will not revise it upon
exceptions." (Costelo v. Crowell, 139 Mass. 588, 590, 2 N.E. 648; Nuez v. Perry, 113 Mass, 274, 276.)
We cannot find any error on the part of the trial judge in using the above documents as standards and also in giving
credence to the expert witness presented by the private respondent whose testimony the petitioner failed to rebut and
whose credibility it likewise failed to impeach. But more important is the fact that the unrebutted handwriting expert's
testimony noted twelve (12) glaring and material differences in the alleged signature of the private respondent in the
Special Power of Attorney as compared with the specimen signatures, something which the appellate court also took into
account. In Cesar v. Sandiganbayan (134 SCRA 105, 132), we ruled:
Mr. Maniwang pointed to other significant divergences and distinctive characteristics between the sample
signatures and the signatures on the questioned checks in his report which the court's Presiding Justice
kept mentioning during Maniwang's testimony.
In the course of his cross-examination, NBI expert Tabayoyong admitted that he saw the differences
between the exemplars used and the questioned signatures but he dismissed the differences because he
did not consider them fundamental. We rule that significant differences are more fundamental than a few
similarities. A forger always strives to master some similarities.
The second issue raised by the petitioner is that while it is true that A & L Industries is a single proprietorship and the
registered owner thereof is private respondent Lily Yulo, the said proprietorship was established during the marriage and
its assets were also acquired during the same. Therefore, it is presumed that this property forms part of the conjugal
partnership of the spouses Augusto and Lily Yulo and thus, could be held liable for the obligations contracted by Augusto
Yulo, as administrator of the partnership.
There is no dispute that A & L Industries was established during the marriage of Augusta and Lily Yulo and therefore the
same is presumed conjugal and the fact that it was registered in the name of only one of the spouses does not destroy its
conjugal nature (See Mendoza v. Reyes, 124 SCRA 161, 165). However, for the said property to be held liable, the
obligation contracted by the husband must have redounded to the benefit of the conjugal partnership under Article 161 of
the Civil Code. In the present case, the obligation which the petitioner is seeking to enforce against the conjugal property
managed by the private respondent Lily Yulo was undoubtedly contracted by Augusto Yulo for his own benefit because at
the time he incurred the obligation he had already abandoned his family and had left their conjugal home. Worse, he
made it appear that he was duly authorized by his wife in behalf of A & L Industries, to procure such loan from the
petitioner. Clearly, to make A & L Industries liable now for the said loan would be unjust and contrary to the express
provision of the Civil Code. As we have ruled in Luzon Surety Co., Inc. v. De Gracia (30 SCRA 111, 115-117):
As explained in the decision now under review: "It is true that the husband is the administrator of the
conjugal property pursuant to the provisions of Art. 163 of the new Civil Code. However, as such
administrator the only obligations incurred by the husband that are chargeable against the conjugal
property are those incurred in the legitimate pursuit of his career, profession or business with the honest
belief that he is doing right for the benefit of the family. This is not true in the case at bar for we believe
that the husband in acting as guarantor or surety for another in an indemnity agreement as that involved
in this case did not act for the benefit of the conjugal partnership. Such inference is more emphatic in this
case, when no proof is presented that Vicente Garcia in acting as surety or guarantor received
consideration therefore, which may redound to the benefit of the conjugal partnership.(Ibid, pp. 46-47).
xxx xxx xxx
xxx xxx xxx
In the most categorical language, a conjugal partnership under that provision is liable only for such "debts
and obligations contracted by the husband for the benefit of the conjugal partnership." There must be the

requisite showing then of some advantage which clearly accrued to the welfare of the spouses. There is
none in this case.
xxx xxx xxx
Moreover, it would negate the plain object of the additional requirement in the present Civil Code that a
debt contracted by the husband to bind a conjugal partnership must redound to its benefit. That is still
another provision indicative of the solicitude and tender regard that the law manifests for the family as a
unit. Its interest is paramount; its welfare uppermost in the minds of the codifiers and legislators.
We, therefore, rule that the petitioner cannot enforce the obligation contracted by Augusto Yulo against his conjugal
properties with respondent Lily Yulo. Thus, it follows that the writ of attachment cannot issue against the said properties.
Finally, the third issue assails the award of actual damages according to the petitioner, both the lower court and the
appellate court overlooked the fact that the properties referred to are still subject to a levy on attachment. They are,
therefore, still under custodia legis and thus, the assailed decision should have included a declaration as to who is entitled
to the attached properties and that assuming arguendo that the attachment was erroneous, the lower court should have
ordered the sheriff to return to the private respondent the attached properties instead of condemning the petitioner to pay
the value thereof by way of actual damages.
In the case of Lazatin v. Twao (2 SCRA 842, 847), we ruled:
xxx xxx xxx
... It should be observed that Sec. 4 of Rule 59, does not prescribed the remedies available to the
attachment defendant in case of a wrongful attachment, but merely provides an action for recovery upon
the bond, based on the undertaking therein made and not upon the liability arising from a tortuous act, like
the malicious suing out of an attachment. Under the first, where malice is not essential, the attachment
defendant, is entitled to recover only the actual damages sustained by him by reason of the attachment.
Under the second, where the attachment is maliciously sued out, the damages recoverable may include a
compensation for every injury to his credit, business or feed (Tyler v. Mahoney, 168 NC 237, 84 SE 362;
Pittsburg etc. 5 Wakefield, etc., 135 NC 73, 47 SE 234). ...
The question before us, therefore, is whether the attachment of the properties of A & L Industries was wrongful so as to
entitle the petitioner to actual damages only or whether the said attachment was made in bad faith and with malice to
warrant the award of other kinds of damages. Moreover, if the private respondent is entitled only to actual damages, was
the court justified in ordering the petitioner to pay for the value of the attached properties instead of ordering the return of
the said properties to the private respondent Yulo ?
Both the trial and appellate courts found that there was bad faith on the part of the petitioner in securing the writ of
attachment. We do not think so. "An attachment may be said to be wrongful when, for instance, the plaintiff has no cause
of action, or that there is no true ground therefore, or that the plaintiff has a sufficient security other than the property
attached, which is tantamout to saying that the plaintiff is not entitled to attachment because the requirements of entitling
him to the writ are wanting. (7 C.J.S., 664)" (p. 48, Section 4, Rule 57, Francisco, Revised Rules of Court).
Although the petitioner failed to prove the ground relied upon for the issuance of the writ of attachment, this failure cannot
be equated with bad faith or malicious intent. The steps which were taken by the petitioner to ensure the security of its
claim were premised, on the firm belief that the properties involved could be made answerable for the unpaid obligation
due it. There is no question that a loan in the amount of P591,003.59 was borrowed from the bank.
We, thus, find that the petitioner is liable only for actual damages and not for exemplary damages and attorney's fees.
Respondent Lily Yulo has manifested before this Court that she no longer desires the return of the attached properties
since the said attachment caused her to close down the business. From that time she has become a mere employee of
the new owner of the premises. She has grave doubts as to the running condition of the attached machineries and
equipments considering that the attachment was effected way back in 1975. She states as a matter of fact that the
petitioner has already caused the sale of the machineries for fear that they might be destroyed due to prolonged litigation.
We, therefore, deem it just and equitable to allow private respondent Lily Yulo to recover actual damages based on the
value of the attached properties as proven in the trial court, in the amount of P660,000.00. In turn, if there are any
remaining attached properties, they should be permanently released to herein petitioner.
We cannot, however, sustain the award of P500,000.00 representing unrealized profits because this amount was not
proved or justified before the trial court. The basis of the alleged unearned profits is too speculative and conjectural to
show actual damages for a future period. The private respondent failed to present reports on the average actual profits
earned by her business and other evidence of profitability which are necessary to prove her claim for the said amount
(See G. A. Machineries, Inc. v. Yaptinchay, 126 SCRA 78, 88).
The judgment is therefore set aside insofar as it holds the petitioner liable for P500,000.00 actual damages representing
unrealized profits, P150,000.00 for exemplary damages and P20,000.00 for attorney's fees. As stated earlier, the attached
properties, should be released in favor of the petitioner.

WHEREFORE, the decision of the Court of Appeals is hereby SET ASIDE and the petitioner is ordered to pay the private
respondent Lily Yulo the amount of SIX HUNDRED SIXTY THOUSAND PESOS (P660,000.00) as actual damages. The
remaining properties subject of the attachment are ordered released in favor of the petitioner.
SO ORDERED.

HEIRS OF AYUSTE VS CA
GONZAGA-REYES, J.:
Before us is a petition for certiorari under Rule 45, asking this Court to review the decision of the Court of Appeals
dated January 23, 1995 in CA-G.R. CV No. 38232, which overturned the decision of the Regional Trial Court of Lucena
City in Civil Case No. 90-33.
At the outset, we note that Christina Ayuste, the plaintiff in the lower court and the original petitioner herein, died on
November 21, 1995. In his Comment dated January 14, 1998 to private respondents Manifestation informing the Court of
Christina Ayustes death, petitioners counsel re-affirmed such fact of death and informed the Court of the names of
Christina Ayustes legal representatives. The claim not having been extinguished by the death of Christina Ayuste, we
ordered the substitution of her heirs Marlon Ayuste and Arlaine Ayuste-Yu for Christina Ayuste in our Resolution dated
August 11, 1999.
Christina Ayuste married Rafael Ayuste on September 24, 1961. Although the couple resided in Manila, they
operated a machine shop in Barangay Iyam, Lucena City, which was managed by Rafael Ayuste. In order to serve as a
temporary residence for Rafael Ayuste while in Lucena, the couple purchased on August 26, 1982 a parcel of land with an
area of 180 square meters on which a residential house was built situated at Yale Street, University Village, Barrio
Ibabang Dupay, Lucena City from spouses Pedro and Aida David. A deed of sale was executed and signed by the parties
and filed with the Register of Deeds of Lucena City. On October 23, 1983, the Register of Deeds of Lucena City issued
Transfer Certificate of Title No. T-42972 in the name of RAFAEL T. AYUSTE, married to Christina Ayuste.
On February 27, 1987, a deed of absolute sale was executed by Rafael Ayuste in favor of private respondent
whereby the former sold the abovementioned parcel of land to the latter for P40,000, which amount Rafael Ayuste
acknowledge having received in the deed. On page 2 of this deed appears the signature of Christina Ayuste below the
phrase With my conformity. The deed of sale was registered with the Register of deeds of Lucena City on March 5, 1987
and Transfer Certificate of Title No. T-50046 was issued in the name of private respondent.
After Rafael Ayustes death on October 13, 1989, Christina Ayuste discovered, in the course of an inventory of their
properties, that the title to the land in Lucena was missing. She searched for it in the office of her husband in Lucena City
and it was then that she learned from her employees about the sale of the house and lot by her husband to private
respondent.
On March 2, 1990, Christina Ayuste filed a complaint with the Regional Trial Court of Lucena City for the annulment
of the sale, cancellation of the title issued in the name of private respondent and for the payment of moral, exemplary and
actual damages. In her complaint Christina Ayuste alleges that her signature on the deed of sale was forged and that her
husband Rafael Ayuste sold the property without her knowledge and consent.
The Regional Trial Court rendered its Decision on June 20, 1991, the dispositive portion of which provides as followsWHEREFORE, judgment is hereby rendered as follows:
(1) Declaring null and void the Deed of Absolute Sale of House and Lot (Exhibit C') executed by defendant and
plaintiffs husband, the deceased Rafael Ayuste, on February 27, 1987;
(2) Ordering defendant Viena Malabonga to return to plaintiff Christina Ayuste the possession of the house and lot
covered by Transfer Certificate of Title No. T-50045, now in the name of defendant Viena Malabonga, together
with the improvements thereon;
(3) Directing the Register of Deeds of Lucena City to cancel Transfer Certificate of Title No. T-50046 and to issue in
the name of plaintiff and her children by the late Rafael Ayuste new Transfer Certificate of Title in lieu thereof,
subject to all/any liens and encumbrances annotated on the memorandum of the title to be cancelled;
(4) Ordering plaintiff Christina Ayuste to pay the defendant Vienna Malabonga the sum of P258,200.00 for the
improvements introduced on the lot and house as well as for maintenance of the premises; and

(5) Ordering defendant to pay plaintiff the amount of rents received from the premises starting March, 1990 until
such time that she finally turns-over (sic) the possession of the house and lot to plaintiff, at the rate of P2,700.00
per month.
With costs against defendant.
Both parties appealed the trial courts decision. On January 23, 1995, the Court of Appeals reversed the trial courts
ruling by holding that Christina Ayustes right to bring an action for the annulment of the sale is barred by laches because
of her failure to file it during the existence of the marriage in accordance with article 173 of the Civil Code. Also, it found
private respondent to be entitled to the protection of a buyer in good faith and for value. The pertinent portion of the public
respondents decision providesRecord shows that plaintiff-appellant wife (sic) instituted on March 2, 1990 her action for annulment of the sale executed
by her husband on February 27, 1987 long after said vendor-husband died in 1989. It is thus clear that the action for
annulment of the sale was not instituted during the marriage as required by Article 173, the very provision of law which
grants the wife the privilege/right to have the sale executed by her husband annulled, in derogation of the suppose (sic)
vested right of the buyer. The two periods provided for in said Article 173 during the marriage and within 10 years
should concur.
We find no merit in plaintiff-appellants claim that she discovered the sale, only after her husbands death, when she made
an inventory and found out that the pertinent titles to the land subject of the sale were missing. It is settled in this
jurisdiction that registration with the Register of Deeds is notice to the whole world. The questioned deed of sale has long
been registered with the Register of Deeds of Lucena City on March 5, 1987- and in fact the said property was
registered in the name of defendant-appellant under Transfer Certificate of Title No. T-50046. Said TCT in the name of
defendant-appellant is now indefeasible.
The peculiar circumstances that militates in favor of defendant-appellant buyer are as follows: The questioned deed of
sale was not actually without the wifes signature signifying marital consent, so to speak. Evidently, defendant-appellant
was led to believe by the husband-vendor that plaintiff-appellant gave her marital consent to the sale, as said husband
presented a deed of sale supposedly pre-signed by his wife, plaintiff-appellant. Defendant-appellant is therefore
undoubtedly a buyer in good faith and for value, with vested rights equally entitled to the protection of the law. The
questioned deed of sale was duly registered In the name of defendant-appellant who was issued a Transfer Certificate of
Title.
xxx xxx
xxx
Unlike the statute of limitations, laches is not a mere question of time but is principally a question of the inequity on
unfairness of permitting a stale right to be enforced or asserted. (Marcelino vs. CA, 210 SCRA 444). For failure of the
plaintiff-appellant wife to institute her action for annulment of sale, while her husband-vendor was still alive as required by
Article 173 of the New Civil Code, plaintiff-appellant wifes right under Article 166 of the same Code has become stale and
is now barred by laches.
In view of the foregoing findings, We rule that the trial court erred in giving due course to the action for annulment of
sale. With the foregoing findings and resolution the other issues raised in this appeal are now moot and academic.
WHEREFORE, in view of all the foregoing, judgment is hereby rendered giving due course to the appeal of defendantappellant, -and- dismissing the appeal of plaintiff-appellant.
The decision dated June 20, 1991 rendered by the Regional Trial Court is REVERSED and SET ASIDE.
The Deed of Absolute Sale executed on February 27, 1987 by and between defendant-appellant and plaintiff-appellants
husband is declared VALID and BINDING upon the plaintiff-appellant.
Both the trial and the appellate court decisions have established that Rafael Ayuste sold conjugal property without the
consent of Christina Ayuste, his wife. This factual finding shall not be disturbed because only questions of law are
reviewed in an appeal under Rule 45 of the Rules of Court subject to certain well-defined exceptions none of which are
present in the instant case. The only issue which remains to be resolved is whether petitioners are entitled to the
annulment of the contract of sale entered into by Rafael Ayuste without the consent of Christina Ayuste.
Petitioners claim that since the law expressly prohibits the husband from alienating real property belonging to the
conjugal partnership without his wifes consent, the contract of sale in question is a nullity pursuant to article 1409 of the
Civil Code which provides that contracts expressly prohibited by law are inexistent and void from the beginning. It is
further averred by petitioners that the present action is not barred because the action to declare the nullity of a contract
does not prescribe. Futhermore, Christina Ayuste cannot be faulted for having brought the action only after the death of
her husband, despite the periods stated in article 173 of the Civil Code, since she had no knowledge of the sale during his
lifetime as he concealed the same from her. Finally, it is contended that article 166 is the relevant provision, not article
173.

Under the Civil Code, although the husband is the administrator of the conjugal partnership, he cannot alienate or
encumber any real property of the conjugal partnership without his wifes consent, subject only to certain exceptions
specified in the law. The remedy available to the wife in case her husband should dispose of their conjugal property
without her consent is laid down in Article 173 of the Civil Code which states thatThe wife may, during the marriage, and within ten years from the transaction questioned, ask the courts for the annulment
of any contract of the husband entered into without her consent, when such consent is required, or any act or contract of
the husband which tends to defraud her or impair her interest in the conjugal partnership property. Should the wife fail to
exercise this right, she or her heirs, after the dissolution of the marriage, may demand the value of property fraudulently
alienated by the husband. (emphasis supplied)
There is no ambiguity in the wording of the law. A sale of real property of the conjugal partnership made by the
husband without the consent of his wife is voidable The action for annulment must be brought during the marriage and
within ten years from the questioned transaction by the wife. Where the law speaks in clear and categorical languange,
there is no room for interpretation there is room only for application.
In the present case, the deed of sale was executed on February 27, 1987. Rafael Ayuste died on October 13,
1989. However, it was only on March 2, 1990 that Christina Ayuste filed her complaint with the lower court asking for the
annulment of the sale. Although the action was filed within ten years from the questioned transaction, it was not brought
during the existence of the marriage which was dissolved upon the death of Rafael Ayuste in 1989. Clearly, the action for
annulment filed by Christina Ayuste was barred for having been filed out of time.
The fact that Christina Ayuste only learned of the sale after the death of her husband is not material. We affirm public
respondents ruling that registration of the sale with the Register of Deeds constitutes a notice to the whole
world. Precisely, the purpose of the legislature in providing a system of registration is to afford a means of publicity so that
persons dealing with real property may search the records and thereby acquire security against instruments the execution
of which have not been revealed to them. Since the deed of sale was registered on March 5, 1987, Christina Ayuste is
presumed to have constructive notice of the sale from such date.
WHEREFORE, the decision of the Court of Appeals is AFFIRMED. No pronouncement as to costs.
SO ORDERED.

HEIRS OF REYES VS MIJARES


YNARES-SANTIAGO, J.:
Under the regime of the Civil Code, the alienation or encumbrance of a conjugal real property requires the consent of
the wife. The absence of such consent renders the entire transaction merely voidable and not void. The wife may, during
the marriage and within ten years from the transaction questioned, bring an action for the annulment of the contract
entered into by her husband without her consent.
Assailed in this petition for review on certiorari are the January 26, 2000 Decision and June 19, 2000, Resolution of
the Court of Appeals in CA-G.R. No. 28464 which declared respondents as purchasers in good faith and set aside the
May 31, 1990 and June 29, 1990 Orders of the Regional Trial Court of Quezon City, Branch 101, in Civil Case No. Q48018.
The controversy stemmed from a dispute over Lot No. 4349-B-2, approximately 396 square meters, previously
covered by Transfer Certificate of Title (TCT) No. 205445, located in Balintawak, Quezon City and registered in the name
of Spouses Vicente Reyes and Ignacia Aguilar-Reyes. Said lot and the apartments built thereon were part of the spouses
conjugal properties having been purchased using conjugal funds from their garments business.
Vicente and Ignacia were married in 1960, but had been separated de facto since 1974. Sometime in 1984, Ignacia
learned that on March 1, 1983, Vicente sold Lot No. 4349-B-2 to respondent spouses Cipriano and Florentina Mijares for
P40,000.00. As a consequence thereof, TCT No. 205445 was cancelled and TCT No. 306087 was issued on April 19,
1983 in the name of respondent spouses. She likewise found out that Vicente filed a petition for administration and
appointment of guardian with the Metropolitan Trial Court of Quezon City, Branch XXI. Vicente misrepresented therein that
his wife, Ignacia, died on March 22, 1982, and that he and their 5 minor children were her only heirs. On September 29,
1983, the court appointed Vicente as the guardian of their minor children. Subsequently, in its Order dated October 14,
1983, the court authorized Vicente to sell the estate of Ignacia.
On August 9, 1984, Ignacia, through her counsel, sent a letter to respondent spouses demanding the return of her
share in the lot. Failing to settle the matter amicably, Ignacia filed on June 4, 1996 a complaint for annulment of sale
against respondent spouses. The complaint was thereafter amended to include Vicente Reyes as one of the defendants.

In their answer, respondent spouses claimed that they are purchasers in good faith and that the sale was valid
because it was duly approved by the court. Vicente Reyes, on the other hand, contended that what he sold to the spouses
was only his share in Lot No. 4349-B-2, excluding the share of his wife, and that he never represented that the latter was
already dead. He likewise testified that respondent spouses, through the counsel they provided him, took advantage of his
illiteracy by filing a petition for the issuance of letters of administration and appointment of guardian without his
knowledge.
On February 15, 1990, the court a quo rendered a decision declaring the sale of Lot No. 4349-B-2 void with respect
to the share of Ignacia. It held that the purchase price of the lot was P110,000.00 and ordered Vicente to return thereof
or P55,000.00 to respondent spouses. The dispositive portion of the said decision, readsWHEREFORE, premises above considered, judgment is hereby rendered declaring the subject Deed of Absolute Sale,
dated March [1,] 1983 signed by and between defendants Vicente Reyes and defendant Cipriano Mijares NULL AND
VOID WITH RESPECT TO ONE-HALF (1/2) OF THE SAID PROPERTY;
The Register of Deeds of Quezon City is hereby ordered to cancel TCT No. 306083 (sic) in the names of defendant
spouses Cipriano Mijares and Florentina Mijares and to issue a new TCT in the name of the plaintiff Ignacia Aguilar-Reyes
as owner in fee simple of one-half (1/2) of said property and the other half in the names of defendant spouses Cipriano
Mijares and Florentin[a] Mijares, upon payment of the required fees therefore;
Said defendant spouses Mijares are also ordered to allow plaintiff the use and exercise of rights, as well as obligations,
pertinent to her one-half (1/2) ownership of the subject property;
Defendant Vicente Reyes is hereby ordered to reimburse P55,000.00 with legal rate of interest from the execution of the
subject Deed of Absolute Sale on March 1, 1983, to the defendant spouses Cipriano Mijares and Florentina Mijares which
corresponds to the one-half (1/2) of the actual purchase price by the said Mijares but is annulled in this decision (sic);
Defendant Vicente Reyes is hereby further ordered to pay plaintiff the amount of P50,000.00 by way of moral and
exemplary damages, plus costs of this suit.
SO ORDERED.
Ignacia filed a motion for modification of the decision praying that the sale be declared void in its entirety and that the
respondents be ordered to reimburse to her the rentals they collected on the apartments built on Lot No. 4349-B-2
computed from March 1, 1983.
On May 31, 1990, the trial court modified its decision by declaring the sale void in its entirety and ordering Vicente
Reyes to reimburse respondent spouses the purchase price of P110,000, thus
WHEREFORE, premises considered, judgment is hereby rendered declaring the subject Deed of Absolute Sale, dated
March 1, 1983 signed by and between defendants Vicente Reyes and defendant Cipriano Mijares as null and void ab
initio, in view of the absence of the wifes conformity to said transaction.
Consequent thereto, the Register of Deeds for Quezon City is hereby ordered to cancel TCT No. 306083 (sic) in the name
of Cipriano Mijares and Florentin[a] Mijares and issue a new TCT in the name of the plaintiff and defendant Ignacia
Aguilar-Reyes and Vicente Reyes as owners in fee simple, upon payment of required fees therefore.
Defendant Vicente Reyes is hereby ordered to pay the amount of one hundred ten thousand pesos (P110,000.00) with
legal rate of interest at 12% per annum from the execution of the subject Deed of Absolute Sale on March 1, 1983.
Further, defendant Vicente Reyes is ordered to pay the amount of P50,000.00 by way of moral and exemplary damages,
plus costs of this suit.
SO ORDERED.
On motion of Ignacia, the court issued an Order dated June 29, 1990 amending the dispositive portion of the May 31,
1990 decision by correcting the Transfer Certificate of Title of Lot No. 4349-B-2, in the name of Cipriano Mijares and
Florentina Mijares, from TCT No. 306083 to TCT No. 306087; and directing the Register of Deeds of Quezon City to issue
a new title in the name of Ignacia Aguilar-Reyes and Vicente Reyes. The Order likewise specified that Vicente Reyes
should pay Ignacia Aguilar-Reyes the amount of P50,000.00 as moral and exemplary damages.
Both Ignacia Aguilar-Reyes and respondent spouses appealed the decision to the Court of Appeals. Pending the
appeal, Ignacia died and she was substituted by her compulsory heirs.
Petitioners contended that they are entitled to reimbursement of the rentals collected on the apartment built on Lot
No. 4349-B-2, while respondent spouses claimed that they are buyers in good faith. On January 26, 2000, the Court of
Appeals reversed and set aside the decision of the trial court. It ruled that notwithstanding the absence of Ignacias
consent to the sale, the same must be held valid in favor of respondents because they were innocent purchasers for
value. The decretal potion of the appellate courts decision states
WHEREFORE, premises considered, the Decision appealed from and the Orders dated May 31, 1990 and June 29, 1990,
are SET ASIDE and in lieu thereof a new one is rendered

1.
Declaring the Deed of Absolute Sale dated March 1, 1983 executed by Vicente Reyes in favor of spouses Cipriano
and [Florentina] Mijares valid and lawful;
2.
Ordering Vicente Reyes to pay spouses Mijares the amount of P30,000.00 as attorneys fees and legal expenses;
and
3.
Ordering Vicente Reyes to pay spouses Mijares P50,000.00 as moral damages.
No pronouncement as to costs.
SO ORDERED.
Undaunted by the denial of their motion for reconsideration, petitioners filed the instant petition contending that the
assailed sale of Lot No. 4392-B-2 should be annulled because respondent spouses were not purchasers in good faith.
The issues for resolution are as follows: (1) What is the status of the sale of Lot No. 4349-B-2 to respondent
spouses? (2) Assuming that the sale is annullable, should it be annulled in its entirety or only with respect to the share of
Ignacia? (3) Are respondent spouses purchasers in good faith?
Articles 166 and 173 of the Civil Code, the governing laws at the time the assailed sale was contracted, provide:
Art.166. Unless the wife has been declared a non compos mentis or a spendthrift, or is under civil interdiction or is
confined in a leprosarium, the husband cannot alienate or encumber any real property of the conjugal partnership without
the wifes consent. If she refuses unreasonably to give her consent, the court may compel her to grant the same
Art. 173. The wife may, during the marriage and within ten years from the transaction questioned, ask the courts for the
annulment of any contract of the husband entered into without her consent, when such consent is required, or any act or
contract of the husband which tends to defraud her or impair her interest in the conjugal partnership property. Should the
wife fail to exercise this right, she or her heirs after the dissolution of the marriage, may demand the value of property
fraudulently alienated by the husband.
Pursuant to the foregoing provisions, the husband could not alienate or encumber any conjugal real property without
the consent, express or implied, of the wife otherwise, the contract is voidable. Indeed, in several cases the Court had
ruled that such alienation or encumbrance by the husband is void. The better view, however, is to consider the
transaction as merely voidable and not void. This is consistent with Article 173 of the Civil Code pursuant to which the wife
could, during the marriage and within 10 years from the questioned transaction, seek its annulment.
In the case of Heirs of Christina Ayuste v. Court of Appeals, it was categorically held that
There is no ambiguity in the wording of the law. A sale of real property of the conjugal partnership made by the husband
without the consent of his wife is voidable. The action for annulment must be brought during the marriage and within ten
years from the questioned transaction by the wife. Where the law speaks in clear and categorical language, there is no
room for interpretation there is room only for application.
Likewise, in Spouses Guiang v. Court of Appeals, the Court quoted with approval the ruling of the trial court that
under the Civil Code, the encumbrance or alienation of a conjugal real property by the husband absent the wifes consent,
is voidable and not void. Thus
Under Article 166 of the Civil Code, the husband cannot generally alienate or encumber any real property of the
conjugal partnership without the wifes consent. The alienation or encumbrance if so made however is not null and void. It
is merely voidable. The offended wife may bring an action to annul the said alienation or encumbrance. Thus, the
provision of Article 173 of the Civil Code of the Philippines, to wit:
Art. 173. The wife may, during the marriage and within ten years from the transaction questioned, ask the courts for the
annulment of any contract of the husband entered into without her consent, when such consent is required, or any act or
contract of the husband which tends to defraud her or impair her interest in the conjugal partnership property. Should the
wife fail to exercise this right, she or her heirs after the dissolution of the marriage, may demand the value of property
fraudulently alienated by the husband.
This particular provision giving the wife ten (10) years x x x during [the] marriage to annul the alienation or encumbrance
was not carried over to the Family Code. It is thus clear that any alienation or encumbrance made after August 3, 1988
when the Family Code took effect by the husband of the conjugal partnership property without the consent of the wife is
null and void
In the case at bar, there is no dispute that Lot No. 4349-B-2, is a conjugal property having been purchased using the
conjugal funds of the spouses during the subsistence of their marriage. It is beyond cavil therefore that the sale of said lot
to respondent spouses without the knowledge and consent of Ignacia is voidable. Her action to annul the March 1, 1983
sale which was filed on June 4, 1986, before her demise is perfectly within the 10 year prescriptive period under Article
173 of the Civil Code. Even if we reckon the period from November 25, 1978 which was the date when Vicente and the
respondent spouses entered into a contract concerning Lot No. 4349-B-2, Ignacias action would still be within the
prescribed period.

Anent the second issue, the trial court correctly annulled the voidable sale of Lot No. 4349-B-2 in its
entirety. In Bucoy v. Paulino, a case involving the annulment of sale with assumption of mortgages executed by the
husband without the consent of the wife, it was held that the alienation or encumbrance must be annulled in its entirety
and not only insofar as the share of the wife in the conjugal property is concerned. Although the transaction in the said
case was declared void and not merely voidable, the rationale for the annulment of the whole transaction is the same thus

The plain meaning attached to the plain language of the law is that the contract, in its entirety, executed by the husband
without the wife's consent, may be annulled by the wife. Had Congress intended to limit such annulment in so far as the
contract shall prejudice the wife, such limitation should have been spelled out in the statute. It is not the legitimate
concern of this Court to recast the law. As Mr. Justice Jose B. L. Reyes of this Court and Judge Ricardo C. Puno of the
Court of First Instance correctly stated, [t]he rule (in the first sentence of Article 173) revokes Baello vs. Villanueva, 54
Phil. 213 and Coque vs. Navas Sioca, 45 Phil. 430, in which cases annulment was held to refer only to the extent of the
one-half interest of the wife
The necessity to strike down the contract of July 5, 1963 as a whole, not merely as to the share of the wife, is not without
its basis in the common-sense rule. To be underscored here is that upon the provisions of Articles 161, 162 and 163 of the
Civil Code, the conjugal partnership is liable for many obligations while the conjugal partnership exists. Not only that. The
conjugal property is even subject to the payment of debts contracted by either spouse before the marriage, as those for
the payment of fines and indemnities imposed upon them after the responsibilities in Article 161 have been covered
(Article 163, par. 3), if it turns out that the spouse who is bound thereby, should have no exclusive property or if it should
be insufficient. These are considerations that go beyond the mere equitable share of the wife in the property. These are
reasons enough for the husband to be stopped from disposing of the conjugal property without the consent of the wife.
Even more fundamental is the fact that the nullity is decreed by the Code not on the basis of prejudice but lack of consent
of an indispensable party to the contract under Article 166.
With respect to the third issue, the Court finds that respondent spouses are not purchasers in good faith. A
purchaser in good faith is one who buys property of another, without notice that some other person has a right to, or
interest in, such property and pays full and fair price for the same, at the time of such purchase, or before he has notice of
the claim or interest of some other persons in the property. He buys the property with the belief that the person from
whom he receives the thing was the owner and could convey title to the property. A purchaser cannot close his eyes to
facts which should put a reasonable man on his guard and still claim he acted in good faith.
In the instant case, there existed circumstances that should have placed respondent spouses on guard. The death
certificate of Ignacia, shows that she died on March 22, 1982. The same death certificate, however, reveals that (1) it
was issued by the Office of the Civil Registrar of Lubao Pampanga on March 10, 1982; (2) the alleged death of Ignacia
was reported to the Office of the Civil Registrar on March 4, 1982; and (3) her burial or cremation would be on March 8,
1982. These obvious flaws in the death certificate should have prompted respondents to investigate further, especially so
that respondent Florentina Mijares admitted on cross examination that she asked for the death certificate of Ignacia
because she was suspicious that Ignacia was still alive. Moreover, respondent spouses had all the opportunity to verify
the claim of Vicente that he is a widower because it was their lawyer, Atty. Rodriguito S. Saet, who represented Vicente in
the special proceedings before the Metropolitan Trial Court.
Neither can respondent spouses rely on the alleged court approval of the sale. Note that the Order issued by the
Metropolitan Trial Court of Quezon City, Branch XXXI, appointing Vicente as guardian of his 5 minor children, as well as
the Order authorizing him to sell the estate of Ignacia were issued only on September 29, 1983 and October 14, 1983,
respectively. On the other hand, the sale of the entire Lot No. 4349-B-2 to respondent spouses appears to have been
made not on March 1, 1983, but even as early as November 25, 1978. In the Agreement dated November 25, 1978,
Vicente in consideration of the amount of P110,000.00, sold to Cipriano Mijares Lot No. 4349-B-2 on installment basis,
with the first installment due on or before July 31, 1979. This was followed by a Memorandum of Understanding
executed on July 30, 1979, by Vicente and Cipriano (1) acknowledging Ciprianos receipt of Vicentes down payment in
the amount of P50,000.00; and (2) authorizing Florentina Mijares to collect rentals. On July 14, 1981, Vicente and
Cipriano executed another Memorandum of Agreement, stating, among other, that out of the purchase price of
P110,000.00 Vicente had remaining balance of P19,000.00. Clearly therefore, the special proceedings before the
Metropolitan Trial Court of Quezon City, Branch XXXI, could not have been the basis of respondent spouses claim of
good faith because the sale of Lot No. 4349-B-2 occurred prior thereto.
Respondent spouses cannot deny knowledge that at the time of the sale in 1978, Vicente was married to Ignacia and
that the latter did not give her conformity to the sale. This is so because the 1978 Agreement described Vicente as
married but the conformity of his wife to the sale did not appear in the deed. Obviously, the execution of another deed of
sale in 1983 over the same Lot No. 4349-B-2, after the alleged death of Ignacia on March 22, 1982, as well as the
institution of the special proceedings were, intended to correct the absence of Ignacias consent to the sale. Even
assuming that respondent spouses believed in good faith that Ignacia really died on March 22, 1982, after they purchased

the lot, the fact remains that the sale of Lot No. 4349-B-2 prior to Ignacias alleged demise was without her consent and
therefore subject to annulment. The October 14, 1983 order authorizing the sale of the estate of Ignacia, could not have
validated the sale of Lot No. 4349-B-2 because said order was issued on the assumption that Ignacia was already dead
and that the sale dated March 1, 1983 was never categorically approved in the said order.
The fact that the 5 minor children of Vicente represented by the latter, signed the March 1, 1983 deed of sale of Lot
No. 4349-B-2 will not estop them from assailing the validity thereof. Not only were they too young at that time to
understand the repercussions of the sale, they likewise had no right to sell the property of their mother who, when they
signed the deed, was very much alive.
If a voidable contract is annulled, the restoration of what has been given is proper. The relationship between parties
in any contract even if subsequently annulled must always be characterized and punctuated by good faith and fair
dealing. Hence, for the sake of justice and equity, and in consonance with the salutary principle of non-enrichment at
anothers expense, the Court sustains the trial courts order directing Vicente to refund to respondent spouses the amount
of P110,000.00 which they have paid as purchase price of Lot No. 4349-B-2. The court a quocorrectly found that the
subject of the sale was the entire Lot No. 4349-B-2 and that the consideration thereof is not P40,000.00 as stated in the
March 1, 1983 deed of sale, but P110,000.00 as evidenced by the (1) Agreement dated November 25, 1978 as well as
the July 30, 1979 Memorandum of Understanding and the July 14, 1981 Memorandum of Agreement which served as
receipts of the installment payments made by respondent Cipriano Mijares; and (2) the receipt duly signed by Vicente
Reyes acknowledging receipt of the amount of P110,000.00 from respondent spouses as payment of the sale of the
controverted lot.
The trial court, however, erred in imposing 12% interest per annum on the amount due the respondents. In Eastern
Shipping Lines, Inc. v. Court of Appeals, it was held that interest on obligations not constituting a loan or forbearance of
money is six percent (6%) annually. If the purchase price could be established with certainty at the time of the filing of the
complaint, the six percent (6%) interest should be computed from the date the complaint was filed until finality of the
decision. In Lui v. Loy, involving a suit for reconveyance and annulment of title filed by the first buyer against the seller
and the second buyer, the Court, ruling in favor of the first buyer and annulling the second sale, ordered the seller to
refund to the second buyer (who was not a purchaser in good faith) the purchase price of the lots. It was held therein that
the 6% interest should be computed from the date of the filing of the complaint by the first buyer. After the judgment
becomes final and executory until the obligation is satisfied, the amount due shall earn interest at 12% per year, the
interim period being deemed equivalent to a forbearance of credit.
Accordingly, the amount of P110,000.00 due the respondent spouses which could be determined with certainty at the
time of the filing of the complaint shall earn 6% interest per annum from June 4, 1986 until the finality of this decision. If
the adjudged principal and the interest (or any part thereof) remain unpaid thereafter, the interest rate shall be twelve
percent (12%) per annum computed from the time the judgment becomes final and executory until it is fully satisfied.
Petitioners prayer for payment of rentals should be denied. Other than the allegation of Ignacia in her Sinumpaang
Salaysay that the apartments could be rented at P1,000.00 a month, no other evidence was presented to substantiate her
claim. In awarding rentals which are in the nature of actual damages, the Court cannot rely on mere assertions,
speculations, conjectures or guesswork but must depend on competent proof and on the best evidence obtainable
regarding the actual amount of loss. None, having been presented in the case at bar, petitioners claim for rentals must be
denied.
While as a general rule, a party who has not appealed is not entitled to affirmative relief other than the ones granted
in the decision of the court below, law and jurisprudence authorize a tribunal to consider errors, although unassigned, if
they involve (1) errors affecting the lower courts jurisdiction over the subject matter, (2) plain errors not specified, and (3)
clerical errors. In this case, though defendant Vicente Reyes did not appeal, the plain error committed by the court a
quo as to the award of moral and exemplary damages must be corrected. These awards cannot be lumped together as
was done by the trial court. Moral and exemplary damages are different in nature, and require separate
determination. Moral damages are awarded where the claimant experienced physical suffering, mental anguish, fright,
serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury as a result of
the act complained of. The award of exemplary damages, on the other hand, is warranted when moral, temperate,
liquidated, or compensatory damages were likewise awarded by the court.
Hence, the trial courts award of P50,000.00 by way of moral and exemplary damages should be modified. Vicente
Reyes should be ordered to pay the amounts of P25,000.00 as moral damages and P25,000.00 as exemplary
damages. Since Vicente Reyes was among the heirs substituted to the late Ignacia Aguilar-Reyes, payment of moral and
exemplary damages must be made by Vicente to his children, petitioners in this case.
WHEREFORE, in view of all the foregoing, the petition is PARTIALLY GRANTED. The January 26, 2000 Decision
and June 19, 2002, Resolution of the Court of Appeals in CA-G.R. No. 28464 are REVERSED and SET ASIDE. The May
31, 1990 Order of the Regional Trial Court of Quezon City, Branch 101, in Civil Case No. Q-48018, which annulled the
March 1, 1983 Deed of Absolute Sale over Lot No. 4349-B-2, and ordered the Register of Deeds of Quezon City to cancel

TCT No. 306087 in the name of respondent spouses Cipriano Mijares and Florentina Mijares covering the same property;
as well as the June 29, 1990 Order correcting the typographical errors in the order dated March 1, 1983, are
REINSTATED, with the following MODIFICATIONS
(1)
The Register of Deeds of Quezon City is ordered to issue a new certificate of title over Lot No. 4349-B-2, in
the name of petitioners as co-owners thereof;
(2)
Vicente Reyes is ordered to reimburse the respondent spouses the amount of P110,000.00 as purchase
price of Lot No. 4349-B-2, with interest at 6% per annum from June 4, 1986, until finality of this decision. After this
decision becomes final, interest at the rate of 12% per annum on the principal and interest (or any part thereof) shall be
imposed until full payment.
(3)
Defendant Vicente Reyes is ordered to pay the heirs of the late Ignacia Aguilar-Reyes, the amounts of
P25,000.00 as moral damages and P25,000.00 as exemplary damages.
SO ORDERED.

PELAYO VS PEREZ
AUSTRIA-MARTINEZ, J.:

This resolves the petition for review on certiorari seeking the reversal of the Decision of the Court of Appeals (CA)
promulgated on April 20, 1999 which reversed the Decision of the Regional Trial Court (RTC) of Panabo, Davao, Branch
34, in Civil Case No. 91-46; and the CA Resolution dated December 17, 1999 denying petitioners motion for
reconsideration.
The antecedent facts as aptly narrated by the CA are as follows:
David Pelayo (Pelayo),by a Deed of Absolute Sale executed on January 11, 1988, conveyed to
Melki Perez (Perez) two parcels of agricultural land (the lots) situated in Panabo, Davao which are
portions of Lot 4192, Cad. 276 covered by OCT P-16873.
Loreza Pelayo (Loreza), wife of Pelayo, and another one whose signature is illegible witnessed
the execution of the deed.
Loreza, however, signed only on the third page in the space provided for witnesses on account of
which Perez application for registration of the deed with the Office of the Register of Deeds in Tagum,
Davao was denied.
Perez thereupon asked Loreza to sign on the first and second pages of the deed but she refused,
hence, he instituted on August 8, 1991 the instant complaint for specific performance against her and her
husband Pelayo (defendants).
The defendants moved to dismiss the complaint on the ground that it stated no cause of action,
citing Section 6 of RA 6656 otherwise known as the Comprehensive Agrarian Reform Law which took
effect on June 10, 1988 and which provides that contracts executed prior thereto shall be valid only when
registered with the Register of Deeds within a period of three (3) months after the effectivity of this Act.
The questioned deed having been executed on January 10, 1988, the defendants claimed that
Perez had at least up to September 10, 1988 within which to register the same, but as they failed to, it is
not valid and, therefore, unenforceable.
The trial court thus dismissed the complaint. On appeal to this Court, the dismissal was set aside
and the case was remanded to the lower court for further proceedings.

In their Answer, the defendants claimed that as the lots were occupied illegally by some persons
against whom they filed an ejectment case, they and Perez who is their friend and known at the time as
an activist/leftist, hence feared by many, just made it appear in the deed that the lots were sold to him in
order to frighten said illegal occupants, with the intentional omission of Lorezas signature so that the
deed could not be registered; and that the deed being simulated and bereft of consideration is
void/inexistent.
Perez countered that the lots were given to him by defendant Pelayo in consideration of his
services as his attorney-in-fact to make the necessary representation and negotiation with the illegal
occupants-defendants in the ejectment suit; and that after his relationship with defendant Pelayo became
sour, the latter sent a letter to the Register of Deeds of Tagum requesting him not to entertain any
transaction concerning the lots title to which was entrusted to Perez who misplaced and could [not] locate
it.
Defendant Pelayo claimed in any event, in his Pre-trial brief filed on March 19, 1996, that the
deed was without his wife Lorezas consent, hence, in light of Art. 166 of the Civil Code which provides:
Article 166. Unless the wife has been declared a non compos mentis or a
spendthrift, or is under civil interdiction or is confined in a leprosarium, the husband
cannot alienate or encumber any real property of the conjugal partnership without the
wifes consent . . .
it is null and void.
The trial court, finding, among others, that Perez did not possess, nor pay the taxes on the lots,
that defendant Pelayo was indebted to Perez for services rendered and, therefore, the deed could only be
considered as evidence of debt, and that in any event, there was no marital consent to nor actual
consideration for the deed, held that the deed was null and void and accordingly rendered judgment the
dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered ordering and directing the
defendants to pay plaintiff Melki Perez the sum of TEN THOUSAND (P10,000.00) Pesos
as principal with 12% interest per annum starting from the date of filing of the complaint
on August 1, 1991 until plaintiff is fully paid.
The defendants shall likewise pay to plaintiff the sum of THREE THOUSAND
(P3,000.00) as attorneys fees.
The court further orders that the Deed of Absolute Sale, (Annex A) of the
complaint and (Annex C) of the plaintiffs Motion for Summary Judgment is declared null
and void and without force and it is likewise removed as a cloud over defendants title and
property in suit. . . .

The RTC Decision was appealed by herein respondent Perez to the CA. Petitioners failed to file their appellees
brief. The CA then promulgated its Decision on April 20, 1999 whereby it ruled that by Lorenzas signing as witness to the
execution of the deed, she had knowledge of the transaction and is deemed to have given her consent to the same; that
herein petitioners failed to adduce sufficient proof to overthrow the presumption that there was consideration for the deed,
and that petitioner David Pelayo, being a lawyer, is presumed to have acted with due care and to have signed the deed
with full knowledge of its contents and import. The CA reversed and set aside the RTC Decision, declaring as valid and
enforceable the questioned deed of sale and ordering herein petitioner Lorenza Pelayo to affix her signature on all pages
of said document.
Petitioners moved for reconsideration of the decision but the same was denied per Resolution dated December
17, 1999. The CA found said motion to have been filed out of time and ruled that even putting aside technicality,
petitioners failed to present any ground bearing on the merits of the case to justify a reversal or setting aside of the
decision.
Hence, this petition for review on certiorari on the following grounds:

1.
The CA erred in ignoring the specific provision of Section 6, in relation to Section 4 of R.A. No. 6657
otherwise known as the Comprehensive Agrarian Reform Law of 1988 which took effect on June 15, 1988 and which
provides that contracts executed prior thereto shall be valid only when registered with the Register of Deeds within a
period of three (3) months after the effectivity of this Act.
2.
The CA erred in holding that the deed of sale was valid and considering the P10,000.00 adjudged by the
trial court as Perezs remuneration as the consideration for the deed of sale, instead of declaring the same as null and
void for being fictitious or simulated and on the basis of Art. 491, Par. 2 of the New Civil Code which prohibits agents from
acquiring by purchase properties from his principal under his charge.
3.

The CA made a novel ruling that there was implied marital consent of the wife of petitioner David Pelayo.

4.
Petitioners should have been allowed to file their appellees brief to ventilate their side, considering the
existence of peculiar circumstances which prevented petitioners from filing said brief.
On the other hand, respondent points out that the CA, in resolving the first appeal docketed as CA-G.R. SP No.
38700brought by respondent assailing the RTC Order granting herein petitioners motion to dismiss, already ruled that
under R.A. No. 6657, the sale or transfer of private agricultural land is allowed only when the area of the land being
conveyed constitutes or is a part of, the landowner-seller retained area and when the total landholding of the purchasertransferee, including the property sold, does not exceed five (5) hectares; that in this case, the land in dispute is only 1.3
hectares and there is no proof that the transferees (herein respondent) total landholding inclusive of the subject land will
exceed 5 hectares, the landholding ceiling prescribed by R.A. No. 6657; that the failure of respondent to register the
instrument was not due to his fault or negligence but can be attributed to Lorenzas unjustified refusal to sign two pages of
the deed despite several requests of respondent; and that therefore, the CA ruled that the deed of sale subject of this
case is valid under R.A. No. 6657.
Respondent further maintains that the CA correctly held in its assailed Decision that there was consideration for
the contract and that Lorenza is deemed to have given her consent to the deed of sale.
Respondent likewise opines that the CA was right in denying petitioners motion for reconsideration where they
prayed that they be allowed to file their appellees brief as their counsel failed to file the same on account of said counsels
failing health due to cancer of the liver. Respondent emphasized that in petitioners motion for reconsideration, they did
not even cite any errors made by the CA in its Decision.
The issues boil down to the question of whether or not the deed of sale was null and void on the following
grounds: (a) for not complying with the provision in R.A. No. 6657 that such document must be registered with the
Register of Deeds within three months after the effectivity of said law; (b) for lack of marital consent; (c) for being
prohibited under Article 1491 (2) of the Civil Code; and (d) for lack of consideration.
We rule against petitioners.
The issue of whether or not the deed of sale is null and void under R.A. No. 6657, for respondents failure to
register said document with the Register of Deeds within three months after the effectivity of R.A. No. 6657, had been
resolved with finality by the CA in its Decision dated November 24, 1994 in CA-G.R. SP No. 38700. Herein petitioners no
longer elevated said CA Decision to this Court and the same became final and executory on January 7, 1995.
In said decision, the CA interpreted Section 4, in relation to Section 70 of R.A. No. 6657, to mean thus:
. . . the proper interpretation of both sections is that under R.A. No. 6657, the sale or transfer of
a private agricultural land is allowed only when said land area constitutes or is a part of the landownerseller retained area and only when the total landholdings of the purchaser-transferee, including the
property sold does not exceed five (5) hectares.
Aside from declaring that the failure of respondent to register the deed was not of his own fault or negligence, the CA
ruled that respondents failure to register the deed of sale within three months after effectivity of The Comprehensive
Agrarian Reform Law did not invalidate the deed of sale as the transaction over said property is not proscribed by R.A.
No. 6657.
Thus, under the principle of law of the case, said ruling of the CA is now binding on petitioners. Such principle
was elucidated in Cucueco vs. Court of Appeals, to wit:

Law of the case has been defined as the opinion delivered on a former appeal. It is a term
applied to an established rule that when an appellate court passes on a question and remands the case
to the lower court for further proceedings, the question there settled becomes the law of the case upon
subsequent appeal. It means that whatever is once irrevocably established as the controlling legal rule or
decision between the same parties in the same case continues to be the law of the case, whether correct
on general principles or not, so long as the facts on which such decision was predicated continue to be
the facts of the case before the court.
Petitioners not having questioned the Decision of the CA dated November 24, 1994 which then attained finality, the ruling
that the deed of sale subject of this case is not among the transactions deemed as invalid under R.A. No. 6657, is now
immutable.
We agree with the CA ruling that petitioner Lorenza, by affixing her signature to the Deed of Sale on the space
provided for witnesses, is deemed to have given her implied consent to the contract of sale.
Sale is a consensual contract that is perfected by mere consent, which may either be express or implied. A wifes
consent to the husbands disposition of conjugal property does not always have to be explicit or set forth in any particular
document, so long as it is shown by acts of the wife that such consent or approval was indeed given. In the present case,
although it appears on the face of the deed of sale that Lorenza signed only as an instrumental witness, circumstances
leading to the execution of said document point to the fact that Lorenza was fully aware of the sale of their conjugal
property and consented to the sale.
In their Pre-Trial Brief, petitioners admitted that even prior to 1988, they have been having serious problems,
including threats to the life of petitioner David Pelayo, due to conflicts with the illegal occupants of the property in
question, so that respondent, whom many feared for being a leftist/activist, offered his help in driving out said illegal
occupants.
Human experience tells us that a wife would surely be aware of serious problems such as threats to her
husbands life and the reasons for such threats. As they themselves stated, petitioners problems over the subject
property had been going on for quite some time, so it is highly improbable for Lorenza not to be aware of what her
husband was doing to remedy such problems. Petitioners do not deny that Lorenza Pelayo was present during the
execution of the deed of sale as her signature appears thereon. Neither do they claim that Lorenza Pelayo had no
knowledge whatsoever about the contents of the subject document. Thus, it is quite certain that she knew of the sale
of their conjugal property between her husband and respondent.
Under the rules of evidence, it is presumed that a person takes ordinary care of his concerns. Petitioners did not
even attempt to overcome the aforementioned presumption as no evidence was ever presented to show that Lorenza was
in any way lacking in her mental faculties and, hence, could not have fully understood the ramifications of signing the
deed of sale. Neither did petitioners present any evidence that Lorenza had been defrauded, forced, intimidated or
threatened either by her own husband or by respondent into affixing her signature on the subject document. If Lorenza
had any objections over the conveyance of the disputed property, she could have totally refrained from having any part in
the execution of the deed of sale. Instead, Lorenza even affixed her signature thereto.
Moreover, under Article 173, in relation to Article 166, both of the New Civil Code, which was still in effect on
January 11, 1988 when the deed in question was executed, the lack of marital consent to the disposition of conjugal
property does not make the contract void ab initio but merely voidable. Said provisions of law provide:
Art. 166. Unless the wife has been declared a non compos mentis or a spendthrift, or is under
civil interdiction or is confined in a leprosarium, the husband cannot alienate or encumber any real
property of the conjugal property without the wifes consent. If she refuses unreasonably to give her
consent, the court may compel her to grant the same.
...
Art. 173. The wife may, during the marriage, and within ten years from the transaction
questioned, ask the courts for the annulment of any contract of the husband entered into without her
consent, when such consent is required, or any act or contract of the husband which tends to defraud her
or impair her interest in the conjugal partnership property. Should the wife fail to exercise this right, she or
her heirs, after the dissolution of the marriage, may demand the value of property fraudulently alienated
by the husband.

Hence, it has been held that the contract is valid until the court annuls the same and only upon an action brought
by the wife whose consent was not obtained. In the present case, despite respondents repeated demands for Lorenza to
affix her signature on all the pages of the deed of sale, showing respondents insistence on enforcing said contract,
Lorenza still did not file a case for annulment of the deed of sale. It was only when respondent filed a complaint for
specific performance on August 8, 1991 when petitioners brought up Lorenzas alleged lack of consent as an affirmative
defense. Thus, if the transaction was indeed entered into without Lorenzas consent, we find it quite puzzling why for
more than three and a half years, Lorenza did absolutely nothing to seek the nullification of the assailed contract.
The foregoing circumstances lead the Court to believe that Lorenza knew of the full import of the transaction
between respondent and her
husband; and, by affixing her signature on the deed of sale, she, in effect, signified her consent to the disposition of their
conjugal property.
With regard to petitioners asseveration that the deed of sale is invalid under Article 1491, paragraph 2 of the New
Civil Code, we find such argument unmeritorious. Article 1491 (2) provides:
Art. 1491. The following persons cannot acquire by purchase, even at a public or judicial auction,
either in person or through the mediation of another:
...
(2) Agents, the property whose administration or sale may have been entrusted to them, unless
the consent of the principal has been given;
...
In Distajo vs. Court of Appeals, a landowner, Iluminada Abiertas, designated one of her sons as the administrator
of several parcels of her land. The landowner subsequently executed a Deed of Certification of Sale of Unregistered
Land, conveying some of said land to her son/administrator. Therein, we held that:
Under paragraph (2) of the above article, the prohibition against agents purchasing property in
their hands for sale or management is not absolute. It does not apply if the principal consents to the sale
of the property in the hands of the agent or administrator. In this case, the deeds of sale signed by
Iluminada Abiertas shows that she gave consent to the sale of the properties in favor of her son, Rufo,
who was the administrator of the properties. Thus, the consent of the principal Iluminada Abiertas
removes the transaction out of the prohibition contained in Article 1491(2).
The above-quoted ruling is exactly in point with this case before us. Petitioners, by signing the Deed of Sale in
favor of respondent, are also deemed to have given their consent to the sale of the subject property in favor of
respondent, thereby making the transaction an exception to the general rule that agents are prohibited from purchasing
the property of their principals.
Petitioners also argue that the CA erred in ruling that there was consideration for the sale. We find no error in
said appellate courts ruling. The element of consideration for the sale is indeed present. Petitioners, in adopting the trial
courts narration of antecedent facts in their petition, thereby admitted that they authorized respondent to represent them
in negotiations with the squatters occupying the disputed property and, in consideration of respondents services, they
executed the subject deed of sale. Aside from such services rendered by respondent, petitioners also acknowledged in
the deed of sale that they received in full the amount of Ten Thousand Pesos. Evidently, the consideration for the sale is
respondents services plus the aforementioned cash money.
Petitioners contend that the consideration stated in the deed of sale is excessively inadequate, indicating that the
deed of sale was merely simulated. We are not persuaded. Our ruling in Buenaventura vs. Court of Appeals is pertinent,
to wit:
. . . Indeed, there is no requirement that the price be equal to the exact value of the subject matter
of sale. . . . As we stated in Vales vs. Villa:
Courts cannot follow one every step of his life and extricate him from bad
bargains, protect him from unwise investments, relieve him from one-sided contracts, or

annul the effects of foolish acts. Courts cannot constitute themselves guardians of
persons who are not legally incompetent. Courts operate not because one person has
been defeated or overcome by another, but because he has been defeated or
overcome illegally. Men may do foolish things, make ridiculous contracts, use miserable
judgment, and lose money by them indeed, all they have in the world; but not for that
alone can the law intervene and restore. There must be, in addition, a violation of the
law, the commission of what the law knows as an actionable wrong, before the courts are
authorized to lay hold of the situation and remedy it.
Verily, in the present case, petitioners have not presented proof that there has been fraud, mistake or undue influence
exercised upon them by respondent. It is highly unlikely and contrary to human experience that a layman like
respondent would be able to defraud, exert undue influence, or in any way vitiate the consent of a lawyer like petitioner
David Pelayo who is expected to be more knowledgeable in the ways of drafting contracts and other legal transactions.
Furthermore, in their Reply to Respondents Memorandum, petitioners adopted the CAs narration of fact that
petitioners stated in a letter they sent to the Register of Deeds of Tagum that they have entrusted the titles over subject
lots to herein respondent. Such act is a clear indication that they intended to convey the subject property to herein
respondent and the deed of sale was not merely simulated or fictitious.
Lastly, petitioners claim that they were not able to fully ventilate their defense before the CA as their lawyer, who
was then suffering from cancer of the liver, failed to file their appellees brief. Thus, in their motion for reconsideration of
the CA Decision, they prayed that they be allowed to submit such appellees brief. The CA, in its Resolution dated
December 17, 1999, stated thus:
By movant-defendant-appellees own information, his counsel received a copy of the decision on
May 5, 1999. He, therefore, had fifteen (15) days from said date or up to May 20, 1999 to file the motion.
The motion, however, was sent through a private courier and, therefore, considered to have been filed on
the date of actual receipt on June 17, 1999 by the addressee Court of Appeals, was filed beyond the
reglementary period.
Technicality aside, movant has not proffered any ground bearing on the merits of the case why
the decision should be set aside.
Petitioners never denied the CA finding that their motion for reconsideration was filed beyond the fifteen-day
reglementary period. On that point alone, the CA is correct in denying due course to said motion. The motion having
been belatedly filed, the CA Decision had then attained finality. Thus, in Abalos vs. Philex Mining Corporation, we held
that:
. . . Nothing is more settled in law than that once a judgment attains finality it thereby becomes
immutable and unalterable. It may no longer be modified in any respect, even if the modification is meant
to correct what is perceived to be an erroneous conclusion of fact or law, and regardless of whether the
modification is attempted to be made by the court rendering it or by the highest court of the land.

Moreover, it is pointed out by the CA that said motion did not present any defense or argument on the merits of
the case that could have convinced the CA to reverse or modify its Decision.
We have consistently held that a petitioners right to due process is not violated where he was able to move for
reconsideration of the order or decision in question. In this case, petitioners had the opportunity to fully expound on their
defenses through a motion for reconsideration. Petitioners did file such motion but they wasted such opportunity by failing
to present therein whatever errors they believed the CA had committed in its Decision. Definitely, therefore, the denial of
petitioners motion for reconsideration, praying that they be allowed to file appellees brief, did not infringe petitioners right
to due process as any issue that petitioners wanted to raise could and should have been contained in said motion for
reconsideration.
IN VIEW OF THE FOREGOING, the petition is DENIED and the Decision of the Court of Appeals dated April 20,
1999 and its Resolution dated December 17, 1999 are hereby AFFIRMED.
SO ORDERED.

AGUETE VS PNB
CARPIO, J.:
The Case
G.R. No. 170166 is a petition for review assailing the Decision promulgated on 17 October 2005 by the Court of Appeals
(appellate court) in CA-G.R. CV No. 76845. The appellate court granted the appeal filed by the Philippine National Bank
Laoag Branch (PNB). The appellate court reversed the 29 June 2001 Decision of Branch 15 of the Regional Trial Court of
Laoag City (trial court) in Civil Case No. 7803.
The trial court declared the Deed of Real Estate Mortgage executed by spouses Jose A. Ros (Ros) and Estrella Aguete
(Aguete) (collectively, petitioners), as well as the subsequent foreclosure proceedings, void. Aside from payment of
attorneys fees, the trial court also ordered PNB to vacate the subject property to give way to petitioners possession.
The Facts
The appellate court narrated the facts as follows:
On January 13, 1983, spouses Jose A. Ros and Estrella Aguete filed a complaint for the annulment of the Real Estate
Mortgage and all legal proceedings taken thereunder against PNB, Laoag Branch before the Court of First Instance,
Ilocos Norte docketed as Civil Case No. 7803.
The complaint was later amended and was raffled to the Regional Trial Court, Branch 15, Laoag City.
The averments in the complaint disclosed that plaintiff-appellee Joe A. Ros obtained a loan of P115,000.00 from PNB
Laoag Branch on October 14, 1974 and as security for the loan, plaintiff-appellee Ros executed a real estate mortgage
involving a parcel of land Lot No. 9161 of the Cadastral Survey of Laoag, with all the improvements thereon described
under Transfer Certificate of Title No. T-9646.
Upon maturity, the loan remained outstanding. As a result, PNB instituted extrajudicial foreclosure proceedings on the
mortgaged property. After the extrajudicial sale thereof, a Certificate of Sale was issued in favor of PNB, Laoag as the
highest bidder. After the lapse of one (1) year without the property being redeemed, the property was consolidated and
registered in the name of PNB, Laoag Branch on August 10, 1978.
Claiming that she (plaintiff-appellee Estrella Aguete) has no knowledge of the loan obtained by her husband nor she
consented to the mortgage instituted on the conjugal property a complaint was filed to annul the proceedings pertaining
to the mortgage, sale and consolidation of the property interposing the defense that her signatures affixed on the
documents were forged and that the loan did not redound to the benefit of the family.1avvphi1
In its answer, PNB prays for the dismissal of the complaint for lack of cause of action, and insists that it was plaintiffsappellees own acts [of]
omission/connivance that bar them from recovering the subject property on the ground of estoppel, laches, abandonment
and prescription.
The Trial Courts Ruling
On 29 June 2001, the trial court rendered its Decision in favor of petitioners. The trial court declared that Aguete did not
sign the loan documents, did not appear before the Notary Public to acknowledge the execution of the loan documents,
did not receive the loan proceeds from PNB, and was not aware of the loan until PNB notified her in 14 August 1978 that
she and her family should vacate the mortgaged property because of the expiration of the redemption period. Under the
Civil Code, the effective law at the time of the transaction, Ros could not encumber any real property of the conjugal
partnership without Aguetes consent. Aguete may, during their marriage and within ten years from the transaction
questioned, ask the courts for the annulment of the contract her husband entered into without her consent, especially in
the present case where her consent is required. The trial court, however, ruled that its decision is without prejudice to the
right of action of PNB to recover the amount of the loan and its interests from Ros.
The dispositive portion reads:
WHEREFORE, premises considered, judgment is hereby rendered:
1. DECLARING the Deed of Real Estate Mortgage (Exhibit "C") and the subsequent foreclosure proceedings
conducted thereon NULL and VOID;
2. ORDERING the Register of Deeds of the City of Laoag to cancel TCT No. T-15276 in the name of defendant
PNB and revert the same in the name of plaintiffs spouses Joe Ros and Estrella Aguete;
3. ORDERING defendant to vacate and turnover the possession of the premises of the property in suit to the
plaintiffs; and

4. ORDERING defendant to pay plaintiffs attorneys fee and litigation expenses in the sum of TEN THOUSAND
(P10,000.00) PESOS.
No pronouncement as to costs.
SO ORDERED.
PNB filed its Notice of Appeal of the trial courts decision on 13 September 2001 and paid the corresponding fees.
Petitioners filed on the same date a motion for execution pending appeal, which PNB opposed. In their comment to the
opposition filed on 10 October 2001, petitioners stated that at the hearing of the motion on 3 October 2001, PNBs lay
representative had no objection to the execution of judgment pending appeal. Petitioners claimed that the house on the
subject lot is dilapidated, a danger to life and limb, and should be demolished. Petitioners added that they obliged
themselves to make the house habitable at a cost of not less P50,000.00. The repair cost would accrue to PNBs benefit
should the appellate court reverse the trial court. PNB continued to oppose petitioners motion.
In an Order dated 8 May 2002, the trial court found petitioners motion for execution pending appeal improper because
petitioners have made it clear that they were willing to wait for the appellate courts decision. However, as a court of justice
and equity, the trial court allowed petitioners to occupy the subject property with the condition that petitioners would
voluntarily vacate the premises and waive recovery of improvements introduced should PNB prevail on appeal.
The Appellate Courts Ruling
On 17 October 2005, the appellate court rendered its Decision and granted PNBs appeal. The appellate court reversed
the trial courts decision, and dismissed petitioners complaint.
The appellate court stated that the trial court concluded forgery without adequate proof; thus it was improper for the trial
court to rely solely on Aguetes testimony that her signatures on the loan documents were forged. The appellate court
declared that Aguete affixed her signatures on the documents knowingly and with her full consent.
Assuming arguendo that Aguete did not give her consent to Ros loan, the appellate court ruled that the conjugal
partnership is still liable because the loan proceeds redounded to the benefit of the family. The records of the case reveal
that the loan was used for the expansion of the familys business. Therefore, the debt obtained is chargeable against the
conjugal partnership.
Petitioners filed the present petition for review before this Court on 9 December 2005.
The Issues
Petitioners assigned the following errors:
I. The Honorable Court of Appeals erred in not giving weight to the findings and conclusions of the trial court, and in
reversing and setting aside such findings and conclusions without stating specific contrary evidence;
II. The Honorable Court of Appeals erred in declaring the real estate mortgage valid;
III. The Honorable Court of Appeals erred in declaring, without basis, that the loan contracted by husband Joe A. Ros with
respondent Philippine National Bank Laoag redounded to the benefit of his family, aside from the fact that such had not
been raised by respondent in its appeal.
The Courts Ruling
The petition has no merit. We affirm the ruling of the appellate court.
The Civil Code was the applicable law at the time of the mortgage. The subject property is thus considered part of the
conjugal partnership of gains. The pertinent articles of the Civil Code provide:
Art. 153. The following are conjugal partnership property:
(1) That which is acquired by onerous title during the marriage at the expense of the common fund, whether the
acquisition be for the partnership, or for only one of the spouses;
(2) That which is obtained by the industry, or work or as salary of the spouses, or of either of them;
(3) The fruits, rents or interest received or due during the marriage, coming from the common property or from the
exclusive property of each spouse.
Art. 160. All property of the marriage is presumed to belong to the conjugal partnership, unless it be proved that it pertains
exclusively to the husband or to the wife.
Art. 161. The conjugal partnership shall be liable for:
(1) All debts and obligations contracted by the husband for the benefit of the conjugal partnership, and those
contracted by the wife, also for the same purpose, in the cases where she may legally bind the partnership;
(2) Arrears or income due, during the marriage, from obligations which constitute a charge upon property of either
spouse or of the partnership;
(3) Minor repairs or for mere preservation made during the marriage upon the separate property of either the
husband or the wife; major repairs shall not be charged to the partnership;

(4) Major or minor repairs upon the conjugal partnership property;


(5) The maintenance of the family and the education of the children of both husband and wife, and of legitimate
children of one of the spouses;
(6) Expenses to permit the spouses to complete a professional, vocational or other course.
Art. 166. Unless the wife has been declared a non compos mentis or a spendthrift, or is under civil interdiction or is
confined in a leprosarium, the husband cannot alienate or encumber any real property of the conjugal partnership without
the wifes consent. If she refuses unreasonably to give her consent, the court may compel her to grant the same.
Art. 173. The wife may, during the marriage, and within ten years from the transaction questioned, ask the courts for the
annulment of any contract of the husband entered into without her consent, when such consent is required, or any act or
contract of the husband which tends to defraud her or impair her interest in the conjugal partnership property. Should the
wife fail to exercise this right, she or her heirs after the dissolution of the marriage may demand the value of the property
fraudulently alienated by the husband.
There is no doubt that the subject property was acquired during Ros and Aguetes marriage. Ros and Aguete were
married on 16 January 1954, while the subject property was acquired in 1968. There is also no doubt that Ros
encumbered the subject property when he mortgaged it for P115,000.00 on 23 October 1974. PNB Laoag does not doubt
that Aguete, as evidenced by her signature, consented to Ros mortgage to PNB of the subject property. On the other
hand, Aguete denies ever having consented to the loan and also denies affixing her signature to the mortgage and loan
documents.
The husband cannot alienate or encumber any conjugal real property without the consent, express or implied, of the wife.
Should the husband do so, then the contract is voidable. Article 173 of the Civil Code allows Aguete to question Ros
encumbrance of the subject property. However, the same article does not guarantee that the courts will declare the
annulment of the contract. Annulment will be declared only upon a finding that the wife did not give her consent. In the
present case, we follow the conclusion of the appellate court and rule that Aguete gave her consent to Ros encumbrance
of the subject property.
The documents disavowed by Aguete are acknowledged before a notary public, hence they are public documents. Every
instrument duly acknowledged and certified as provided by law may be presented in evidence without further proof, the
certificate of acknowledgment being prima facie evidence of the execution of the instrument or document involved. The
execution of a document that has been ratified before a notary public cannot be disproved by the mere denial of the
alleged signer. PNB was correct when it stated that petitioners omission to present other positive evidence to substantiate
their claim of forgery was fatal to petitioners cause. Petitioners did not present any corroborating witness, such as a
handwriting expert, who could authoritatively declare that Aguetes signatures were really forged.
A notarized document carries the evidentiary weight conferred upon it with respect to its due execution, and it has in its
favor the presumption of regularity which may only be rebutted by evidence so clear, strong and convincing as to exclude
all controversy as to the falsity of the certificate. Absent such, the presumption must be upheld. The burden of proof to
overcome the presumption of due execution of a notarial document lies on the one contesting the same. Furthermore, an
allegation of forgery must be proved by clear and convincing evidence, and whoever alleges it has the burden of proving
the same.
Ros himself cannot bring action against PNB, for no one can come before the courts with unclean hands.1avvphi1 In their
memorandum before the trial court, petitioners themselves admitted that Ros forged Aguetes signatures.
Joe A. Ros in legal effect admitted in the complaint that the signatures of his wife in the questioned documents are forged,
incriminating himself to criminal prosecution. If he were alive today, he would be prosecuted for forgery. This strengthens
the testimony of his wife that her signatures on the questioned documents are not hers.
In filing the complaint, it must have been a remorse of conscience for having wronged his family; in forging the signature
of his wife on the questioned documents; in squandering the P115,000.00 loan from the bank for himself, resulting in the
foreclosure of the conjugal property; eviction of his family therefrom; and, exposure to public contempt, embarassment
and ridicule.
The application for loan shows that the loan would be used exclusively "for additional working [capital] of buy & sell of
garlic & virginia tobacco." In her testimony, Aguete confirmed that Ros engaged in such business, but claimed to be
unaware whether it prospered. Aguete was also aware of loans contracted by Ros, but did not know where he "wasted the
money." Debts contracted by the husband for and in the exercise of the industry or profession by which he contributes to
the support of the family cannot be deemed to be his exclusive and private debts.
If the husband himself is the principal obligor in the contract, i.e., he directly received the money and services to be used
in or for his own business or his own profession, that contract falls within the term "x x x x obligations for the benefit of the
conjugal partnership." Here, no actual benefit may be proved. It is enough that the benefit to the family is apparent at the
signing of the contract. From the very nature of the contract of loan or services, the family stands to benefit from the loan
facility or services to be rendered to the business or profession of the husband. It is immaterial, if in the end, his business

or profession fails or does not succeed. Simply stated, where the husband contracts obligations on behalf of the family
business, the law presumes, and rightly so, that such obligation will redound to the benefit of the conjugal partnership.
For this reason, we rule that Ros loan from PNB redounded to the benefit of the conjugal partnership. Hence, the debt is
chargeable to the conjugal partnership.
WHEREFORE, we DENY the petition. The Decision of the Court of Appeals in CA-G.R. CV No. 76845 promulgated on 17
October 2005 is AFFIRMED. Costs against petitioners.
SO ORDERED.

DE LEON VS DE LEON
VELASCO, JR., J.:
The Case
Before us is a Petition for Review on Certiorari under Rule 45 assailing and seeking to set aside the Decision and
Resolution dated August 27, 2008 and October 20, 2008, respectively, of the Court of Appeals (CA) in CA-G.R. CV No.
88571. The CA affirmed with modification the October 4, 2006 Decision in Civil Case No. Q04-51595 of the Regional Trial
Court (RTC), Branch 22 in Quezon City.
The Facts
On July 20, 1965, Bonifacio O. De Leon, then single, and the Peoples Homesite and Housing Corporation (PHHC)
entered into a Conditional Contract to Sell for the purchase on installment of a 191.30 square-meter lot situated
in Fairview, Quezon City. Subsequently, on April 24, 1968, Bonifacio married Anita de Leon in a civil rite officiated by the
Municipal Mayor of Zaragosa, Nueva Ecija. To this union were born Danilo and Vilma.
Following the full payment of the cost price for the lot thus purchased, PHHC executed, on June 22, 1970, a Final
Deed of Sale in favor of Bonifacio. Accordingly, Transfer Certificate of Title (TCT) No. 173677 was issued on February 24,
1972 in the name of Bonifacio, single.
Subsequently, Bonifacio, for PhP 19,000, sold the subject lot to her sister, Lita, and husband Felix Rio Tarrosa
(Tarrosas), petitioners herein. The conveying Deed of Sale dated January 12, 1974 (Deed of Sale) did not bear the
written consent and signature of Anita.
Thereafter, or on May 23, 1977, Bonifacio and Anita renewed their vows in a church wedding at St. John the Baptist
Parish inSan Juan, Manila.
On February 29, 1996, Bonifacio died.
Three months later, the Tarrosas registered the Deed of Sale and had TCT No. 173677 canceled. They secured the
issuance in their names of TCT No. N-173911 from the Quezon City Register of Deeds.
Getting wind of the cancellation of their fathers title and the issuance of TCT No. N-173911, Danilo and Vilma filed
on May 19, 2003 a Notice of Adverse Claim before the Register of Deeds of Quezon City to protect their rights over the
subject property. Very much later, Anita, Danilo, and Vilma filed a reconveyance suit before the RTC in Quezon City. In
their complaint, Anita and her children alleged, among other things, that fraud attended the execution of the Deed of Sale
and that subsequent acts of Bonifacio would show that he was still the owner of the parcel of land. In support of their
case, they presented, inter alia, the following documents:
a.
A Real Estate Mortgage execution by Bonifacio in favor of spouses Cesar Diankinay and
Filomena Almero on July 22, 1977.
b.
A Civil Complaint filed by Bonifacio against spouses Cesar Diankinay and Filomena
Almero on November 27, 1979 for nullification of the Real Estate Mortgage.
c.
The Decision issued by the Court of First Instance of Rizal, Quezon City, promulgated on
July 30, 1982, nullifying the Real Estate Mortgage.
The Tarrosas, in their Answer with Compulsory Counterclaim, averred that the lot Bonifacio sold to them was his
exclusive property inasmuch as he was still single when he acquired it from PHHC. As further alleged, they were not
aware of the supposed marriage between Bonifacio and Anita at the time of the execution of the Deed of Sale.

After several scheduled hearings, both parties, assisted by their respective counsels, submitted a Joint Stipulation
of Facts with Motion, to wit:
1.
The parties have agreed to admit the following facts:
a.
Bonifacio O. De Leon, while still single x x x, purchased from the [PHHC] through
a Conditional Contract to Sell on July 20, 1965 a parcel of land with an area of 191.30 square meters
situated in Fairview, Quezon City for P841.72;
b.
On April 24, 1968, Bonifacio O. De Leon married plaintiff Anita B. De Leon before the
Municipal Mayor of Zaragosa, Nueva Ecija. Both parties stipulate that said marriage is valid and binding
under the laws of the Philippines;
c.
On June 22, 1970, Bonifacio O. De Leon paid [PHHC] the total amount of P1,023.74 x x
x. The right of ownership over the subject parcel of land was transferred to the late Bonifacio O. De Leon
on June 22, 1970, upon the full payment of the total [price] of P1,023.74 and upon execution of the Final
Deed of Sale;
d.

After full payment, Bonifacio O. De Leon was issued [TCT] No. 173677 on February 24,

1972;
e.
On January 12, 1974, Bonifacio O. De Leon executed a Deed of Sale in favor of
defendants-spouses Felix Rio Tarrosa and Lita O. De Leon disposing the parcel of land under TCT No.
173677 for valuable consideration amount of P19,000.00 and subscribed before Atty. Salvador R.
Aguinaldo who was commissioned to [notarize] documents on said date. The parties stipulate that
the Deed of Sale is valid and genuine. However, plaintiff Anita De Leon was not a signatory to the Deed
of Sale executed on January 12, 1974;
f.
That plaintiff Anita B. De Leon and the late Bonifacio O. De Leon were married in church
rites on May 23, 1977 x x x;
g.
The late Bonifacio O. De Leon died on February 29, 1996 at the UST Hospital,
Espaa, Manila;
h.
The said Deed of Sale executed on January 12, 1974 was registered on May 8, 1996
before the Office of the Register of Deeds of Quezon City and [TCT] No. N-173911 was issued to Lita O.
De Leon and Felix Rio Tarrosa.
The Ruling of the Trial Court
On October 4, 2006, the RTC, on the finding that the lot in question was the conjugal property of Bonifacio and
Anita, rendered judgment in favor of Anita and her children. The dispositive portion of the decision reads:
WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiffs and against
defendants in the following manner:
(1)
Declaring the Deed of Sale dated January 12, 1974 executed by the late Bonifacio O. De
Leon in favor of defendants-spouses Lita De Leon and Felix Rio Tarrosa void ab initio;
(2)
Directing the Register of Deed of Quezon City to cancel Transfer Certificate of Title No. N173911 in the name of Lita O. De Leon, married to Felix Rio Tarrosa and restore Transfer Certificate of
Title No. 173667 in the name of Bonifacio O. De Leon;
(3)

Ordering the defendants-spouses to pay plaintiffs the following sums:

(a)
(b)
(c)
(d)

P25,000.00 as moral damages;


P20,000.00 as exemplary damages;
P50,000.00 as attorneys fees plus appearance fee of P2,500.00 per court appearance;
Costs of this suit.

SO ORDERED.

Aggrieved, the Tarrosas appealed to the CA. As they would submit, the RTC erred:
(1)
(2)
(3)
(4)
(5)
(6)

in finding for the plaintiffs-appellees by declaring that the land subject matter of the case is
conjugal property;
in not declaring the land as the exclusive property of Bonifacio O. De Leon when sold to
defendant-appellants;
in ruling that defendant-appellants did not adduce any proof that the property was acquired
solely by the efforts of Bonifacio O. De Leon;
in declaring that one-half of the conjugal assets does not vest to Bonifacio O. De Leon
because of the absence of liquidation;
in cancelling TCT No. N-173911 and restored TCT No. [173677] in the name of Bonifacio O.
De Leon;
in awarding moral and exemplary damages and attorneys fees to the plaintiffsappellees.
The Ruling of the Appellate Court

On August 27, 2008, the CA rendered a decision affirmatory of that of the RTC, save for the award of damages,
attorneys fees, and costs of suit which the appellate court ordered deleted. The fallo of the CA decision reads:
WHEREFORE, in view of the foregoing, the assailed decision dated October 4, 2006, of the
Regional Trial Court, Branch 22, Quezon Cityin Civil Case No. Q-04-51595 is hereby AFFIRMED with
MODIFICATION, in that the award of moral and exemplary damages as well as attorneys fees,
appearance fee and costs of suit are hereby DELETED.
SO ORDERED.
Just like the RTC, the CA held that the Tarrosas failed to overthrow the legal presumption that the parcel of land in
dispute was conjugal. The appellate court held further that the cases they cited were inapplicable.
As to the deletion of the grant of moral and exemplary damages, the CA, in gist, held that no evidence was adduced
to justify the award. Based on the same reason, it also deleted the award of attorneys fees and costs of suit.
The Tarrosas moved but was denied reconsideration by the CA in its equally assailed resolution of October 20,
2008.
Hence, they filed this petition.
The Issues
I
Whether the [CA] gravely erred in concluding that the land purchased on installment by Bonifacio O. De
Leon before marriage although some installments were paid during the marriage is conjugal and not his
exclusive property.
II
Whether the [CA] gravely erred in ruling that the Lorenzo, et al. vs. Nicolas, et al., and Alvarez vs.
Espiritu cases do not apply in the case at bar because in the latter the land involved is not a friar land
unlike in the former.
III
Whether the [CA] gravely erred in affirming the decision of the trial court a quo which ruled that petitioners
did not adduce any proof that the land was acquired solely by the efforts of Bonifacio O. De Leon.
IV

Whether the court of appeals gravely erred in affirming the decision of the trial court which ruled that onehalf (1/2) of the conjugal assets do not vest to Bonifacio O. De Leon because of the absence of
liquidation.
Our Ruling
The petition lacks merit.

The Subject Property is the


Conjugal Property of Bonifacio and Anita
The first three issues thus raised can be summed up to the question of whether or not the subject property is
conjugal.
Petitioners assert that, since Bonifacio purchased the lot from PHHC on installment before he married Anita, the
land was Bonifacios exclusive property and not conjugal, even though some installments were paid and the title was
issued to Bonifacio during the marriage. In support of their position, petitioners cite Lorenzo v. Nicolas and Alvarez v.
Espiritu.
We disagree.
Article 160 of the 1950 Civil Code, the governing provision in effect at the time Bonifacio and Anita contracted
marriage, provides that all property of the marriage is presumed to belong to the conjugal partnership unless it is proved
that it pertains exclusively to the husband or the wife. For the presumption to arise, it is not, as Tan v. Court of
Appeals teaches, even necessary to prove that the property was acquired with funds of the partnership. Only proof of
acquisition during the marriage is needed to raise the presumption that the property is conjugal. In fact, even when the
manner in which the properties were acquired does not appear, the presumption will still apply, and the properties will still
be considered conjugal.
In the case at bar, ownership over what was once a PHHC lot and covered by the PHHC-Bonifacio Conditional
Contract to Sell was only transferred during the marriage of Bonifacio and Anita. It is well settled that a conditional sale is
akin, if not equivalent, to a contract to sell. In both types of contract, the efficacy or obligatory force of the vendors
obligation to transfer title is subordinated to the happening of a future and uncertain event, usually the full payment of the
purchase price, so that if the suspensive condition does not take place, the parties would stand as if the conditional
obligation had never existed. In other words, in a contract to sell ownership is retained by the seller and is not passed to
the buyer until full payment of the price, unlike in a contract of sale where title passes upon delivery of the thing sold.
Such is the situation obtaining in the instant case. The conditional contract to sell executed by and between
Bonifacio and PHHC on July 20, 1965 provided that ownership over and title to the property will vest on Bonifacio only
upon execution of the final deed of sale which, in turn, will be effected upon payment of the full purchase price, to wit:
14.
Titles to the property subject of this contract remains with the CORPORATION and shall pass to,
and be transferred in the name of the APPLICANT only upon the execution of the final Deed of Sale
provided for in the next succeeding paragraph.
15.
Upon the full payment by the APPLICANT of the price of the lot above referred to together with all
the interest due thereon, taxes and other charges, and upon his faithful compliance with all the conditions
of this contract the CORPORATION agrees to execute in favor of the APPLICANT a final deed of sale of
the aforesaid land, and the APPLICANT agrees to accept said deed, as full performance by the
CORPORATION of its covenants and undertakings hereunder. x x x
Evidently, title to the property in question only passed to Bonifacio after he had fully paid the purchase price on
June 22, 1970. This full payment, to stress, was made more than two (2) years after his marriage to Anita on April 24,
1968. In net effect, the property was acquired during the existence of the marriage; as such, ownership to the property is,
by law, presumed to belong to the conjugal partnership.

Such presumption is rebuttable only with strong, clear, categorical, and convincing evidence. There must be clear
evidence of the exclusive ownership of one of the spouses, and the burden of proof rests upon the party asserting it.
Petitioners argument that the disputed lot was Bonifacios exclusive property, since it was registered solely in his
name, is untenable. The mere registration of a property in the name of one spouse does not destroy its conjugal
nature. What is material is the time when the property was acquired.
Thus, the question of whether petitioners were able to adduce proof to overthrow the presumption is a factual
issue best addressed by the trial court. As a matter of long and sound practice, factual determinations of the trial
courts, especially when confirmed by the appellate court, are accorded great weight by the Court and, as rule, will not be
disturbed on appeal, except for the most compelling reasons. Petitioners have not, as they really cannot, rebut the
presumptive conjugal nature of the lot in question. In this regard, the Court notes and quotes with approval the following
excerpts from the trial courts disposition:
The defendants, however, did not adduce any proof that the property in question was acquired
solely by the efforts of [Bonifacio]. The established jurisprudence on the matter leads this Court to the
conclusion that the property involved in this dispute is indeed the conjugal property of the deceased
[Bonifacio] De Leon.
In fact, defendant even admitted that [Bonifacio] brought into his marriage with plaintiff Anita the
said land, albeit in the concept of a possessor only as it was not yet registered in his name. The property
was registered only in 1972 during the existence of the marriage. However, the absence of evidence on
the source of funding has called for the application of the presumption under Article 160 in favor of the
plaintiffs.
The cases petitioners cited are without governing applicability to this case simply because they involved a law
specifically enacted to govern the disposition of and ownership of friar lands. In Lorenzo, the Court held that the
pervading legislative intent of Act No. 1120 is to sell the friar lands acquired by the Government to actual settlers and
occupants of the same. The Court went on further to say in Alvarez that under the Friar Lands Act of 1120, the equitable
and beneficial title to the land passes to the purchaser the moment the first installment is paid and a certificate of sale is
issued. Plainly, the said cases are not applicable here considering that the disputed property is not friar land.
There can be no quibbling that Anitas conformity to the sale of the disputed lot to petitioners was never obtained or
at least not formally expressed in the conveying deed. The parties admitted as much in their Joint Stipulation of Facts
with Motion earlier reproduced. Not lost on the Court of course is the fact that petitioners went to the process of
registering the deed after Bonifacios death in 1996, some 22 years after its execution. In the interim, petitioners could
have had workbut did nottowards securing Anitas marital consent to the sale.
It cannot be over-emphasized that the 1950 Civil Code is very explicit on the consequence of the husband
alienating or encumbering any real property of the conjugal partnership without the wifes consent. To a specific point, the
sale of a conjugal piece of land by the husband, as administrator, must, as a rule, be with the wifes consent. Else, the
sale is not valid. So it is that in several cases we ruled that the sale by the husband of property belonging to the conjugal
partnership without the consent of the wife is void ab initio, absent any showing that the latter is incapacitated, under civil
interdiction, or like causes. The nullity, as we have explained, proceeds from the fact that sale is in contravention of the
mandatory requirements of Art. 166 of the Code. Since Art. 166 of the Code requires the consent of the wife before the
husband may alienate or encumber any real property of the conjugal partnership, it follows that the acts or transactions
executed against this mandatory provision are void except when the law itself authorized their validity.
Accordingly, the Deed of Sale executed on January 12, 1974 between Bonifacio and the Tarrosas covering the
PHHC lot is void.
Interest in the Conjugal Partnership Is
Merely Inchoate until Liquidation
As a final consideration, the Court agrees with the CA that the sale of one-half of the conjugal property without
liquidation of the partnership is void. Prior 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 a 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.
Therefore, even on the supposition that Bonifacio only sold his portion of the conjugal partnership, the sale is still
theoretically void, for, as previously stated, the right of the husband or the wife to one-half of the conjugal assets does not
vest until the liquidation of the conjugal partnership.
Nevertheless, this Court is mindful of the fact that the Tarrosas paid a valuable consideration in the amount of PhP
19,000 for the property in question. Thus, as a matter of fairness and equity, the share of Bonifacio after the liquidation of
the partnership should be liable to reimburse the amount paid by the Tarrosas. It is a well-settled principle that no person
should unjustly enrich himself at the expense of another.
WHEREFORE, the petition is DENIED. The CA Decision in CA-G.R. CV No. 88571 is AFFIRMED. Costs against
petitioners.
SO ORDERED.
HEIRS OF HERNANDEZ VS MINGOA
LEONARDO-DE CASTRO, J.:
This is a petition for review on certiorari of the Decision dated September 7, 2000 and Resolution dated
December 29, 2000, both of the Court of Appeals (CA), in CA-G.R. CV No. 54896. The CA Decision reversed and set
aside the decision of the Regional Trial Court (RTC) of Quezon City (Branch 92), which ruled in favor of herein petitioners
in the action for reconveyance filed by the latter in said court against the respondents. The CA Resolution denied the
petitioners motion for reconsideration.
The subject matter of the action is a parcel of land with an area of 520.50 square meters situated in Diliman,
Quezon City, described as Lot 15, Block 89 of the subdivision plan Psd-68807, covered by Transfer Certificate of Title
(TCT) No. 107534issued on May 23, 1966 and registered in the name of Domingo B. Hernandez, Sr. married to Sergia V.
Hernandez. Later on, said TCT No. 107534 was cancelled and in lieu thereof, TCT No. 290121 was issued in favor of
Melanie Mingoa.
These are the factual antecedents of this case:
On February 11, 1994, a complaint was filed with the RTC of Quezon City by herein petitioners, heirs of Domingo
Hernandez, Sr., namely, spouse Sergia Hernandez and their surviving children Domingo, Jr. and Maria Leonora Wilma,
against the respondents herein, Dolores Camisura, Melanie Mingoa, Atty. Plaridel Mingoa, Sr. and all persons claiming
rights under the latter, and the Quezon City Register of Deeds. The case was docketed as Civil Case No. 094-19276.
In their complaint, the petitioners asked for (a) the annulment and/or declaration of nullity of TCT No. 290121
including all its derivative titles, the Irrevocable Special Power of Attorney (SPA) dated February 14, 1963 in favor of
Dolores Camisura, the SPA dated May 9, 1964 in favor of Plaridel Mingoa, Sr., and the Deed of Absolute Sale of Real
Estate dated July 9, 1978 executed by Plaridel Mingoa, Sr. in favor of Melanie Mingoafor being products of forgery and
falsification; and (b) the reconveyance and/or issuance to them (petitioners) by the Quezon City Register of Deeds of the
certificate of title covering the subject property.
Respondents filed a Motion to Dismiss the complaint interposing the following grounds: the claim or demand has
been paid, waived, abandoned or otherwise extinguished; lack of cause of action; lack of jurisdiction over the person of
the defendants or over the subject or nature of the suit; and prescription. The following were attached to said motion: a
Deed of Transfer of Rightsdated February 14, 1963 from Domingo Hernandez, Sr. to Camisura, the Irrevocable
SPA executed by the former in the latters favor, and a Deed of Sale of Right in a Residential Land and Improvements
Therein dated May 9, 1964 executed by Camisura in favor of Plaridel Mingoa, Sr.
In its Order dated September 1, 1994, the trial court denied respondents motion to dismiss.
Respondents filed a petition for certiorari and prohibition with the CA assailing the aforementioned Order of denial
by the RTC. Their initial petition was dismissed for being insufficient in form. Respondents then re-filed their petition,
which was docketed as CA-G.R. SP No. 36868. In a decision dated May 26, 1995, respondents re-filed petition was
denied due course by the CA. Having been filed beyond the reglementary period, respondents subsequent motion for
reconsideration was simply noted by the CA in its Resolution of July 7, 1995. On the basis of a technicality, this Court, in

a Resolution dated September 27, 1995, dismissed respondents' appeal which was docketed as G.R. No. 121020. Per
Entry of Judgment, said Resolution became final and executory on January 2, 1996.
Meanwhile, respondents filed their Answer in the main case therein denying the allegations of the complaint and
averring as defenses the same grounds upon which they anchored their earlier motion to dismiss.
The parties having failed to amicably settle during the scheduled pre-trial conference, the case proceeded to trial.
The evidence respectively presented by the parties is summarized as follows:
x x x [It] appears that in the early part of 1958, Domingo Hernandez, Sr. (who was then a Central
Bank employee) and his spouse Sergia V. Hernandez were awarded a piece of real property by the
Philippine Homesite and Housing Corporation (PHHC) by way of salary deduction. On October 18, 1963,
the [petitioners] then having paid in full the entire amount of P6,888.96, a Deed of Absolute Sale of the
property was executed by the PHHC in their favor. TCT No. 107534, covering the property was issued to
the [petitioners] on May 23, 1966. It bears an annotation of the retention period of the property by the
awardee (i.e., restriction of any unauthorized sale to third persons within a certain period). Tax payments
due on the property were religiously paid (until 1955) by the [petitioners] as evidenced by receipts under
the [petitioners] name.
Hernandez, Sr. died intestate in April 1983 and it was only after his burial that his heirs found out
that TCT No. 107534 was already cancelled a year before (in 1982), and in lieu thereof, TCT No. 290121
was issued to the [respondents]. Upon diligent inquiry, [petitioners] came to know that the cancellation of
TCT (No. 107534) in favor of the [respondents] xxx TCT (No. 290121) was based upon three sets of
documents, namely, (1) Irrevocable Power of Attorney; (2) Irrevocable Special Power of Attorney; and (3)
Deed of Absolute Sale.
[Petitioners] also allege that because of financial difficulties, they were only able to file a
complaint on February 11, 1995 after consulting with several lawyers.
xxxx
[Respondents] xxx on the other hand do not deny that Hernandez, Sr. was indeed awarded a
piece of real property by the PHHC. According to the [respondents] xxx, Hernandez, Sr. was awarded by
the PHHC the Right to Purchase the property in question; however, the late Hernandez, Sr. failed to pay
all the installments due on the said property. Thus, afraid that he would forfeit his right to purchase the
property awarded to him, Hernandez, Sr. sold to Dolores Camisura his rights for the sum of P6,500.00 on
February 14, 1963, through a deed of transfer of rights, seemingly a printed form from the
PHHC. Simultaneous to this, Hernandez, Sr. and his spouse executed an irrevocable special power of
attorney, appointing Dolores Camisura as their attorney-in-fact with express power to sign, execute and
acknowledge any contract of disposition, alienation and conveyance of her right over the aforesaid parcel
of land.
Apparently, this special power of attorney was executed for the purpose of securing her right to
transfer the property to a third person considering that there was a prohibition to dispose of the property
by the original purchaser within one (1) year from full payment. Else wise stated, the irrevocable power
of attorney was necessary in order to enable the buyer, Dolores Camisura, to sell the lot to another,
Plaridel Mingoa, without the need of requiring Hernandez, to sign a deed of conveyance.
On May 9, 1964, Dolores Camisura sold her right over the said property to Plaridel Mingoa for
P7,000.00. Camisura then executed a similar irrevocable power of attorney and a deed of sale of right in
a residential land and improvements therein in favor of Plaridel Mingoa. Upon such payment and on the
strength of the said irrevocable power of attorney, Plaridel Mingoa took possession of the said property
and began paying all the installments due on the property to PHHC. Plaridel Mingoa further secured TCT
No. 107534 (issued in the name of Domingo Hernandez, Sr.) on May, 1966. On July 9, 1978, Plaridel
Mingoa sold to his eldest child, Melanie Mingoa, the property in question for P18,000.00. TCT No.
107534 was thus cancelled and TCT No. 290121 was issued in the name of Melanie Mingoa. It is further
claimed that since 1966 until 1982, Plaridel Mingoa religiously paid all the taxes due on the said property;
and that from 1983 up to the present, Melanie Mingoa paid all the property taxes due thereon aside from
having actual possession of the said property. (words in brackets ours)
On May 9, 1996, the RTC rendered a decision in favor of the petitioners, with the following dispositive portion:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs as


follows:
1) TCT No. 290121 and all its derivative titles are hereby declared null and void;
2) Ordering the Register of Deeds of Quezon City to cancel TCT No. 290121 issued in the
name of defendant Melanie Mingoa and corresponding owners duplicate certificate and all its derivative
title[s];
3) Ordering defendant Melanie Mingoa and all derivative owners to surrender owners duplicate
copies of transfer certificate of title to the Register of Deeds of Quezon City for cancellation upon finality
of this decision;
4) Ordering the defendants except the Register of Deeds of Quezon City to turn over to the
plaintiffs the peaceful possession of the subject property; and
5) Ordering the defendants except the Register of Deeds of Quezon City to jointly and severally
(sic) pay the plaintiffs the sum of P10,000.00 as attorneys [fees] and to pay the costs of suit.
SO ORDERED.
In ruling in favor of petitioners, the trial court reasoned as follows:
The two (2) parties in the case at bar gave out conflicting versions as to who paid for the subject
property. The plaintiffs claim that they were the ones who paid the entire amount out of the conjugal
funds while it is the contention of the defendant Mingoa that the former were not able to pay. The
defendant alleged that the right to purchase was sold to him and he was able to pay the whole
amount. The Court is of the opinion that petitioners version is more credible taken together with the
presence of the irrevocable power of attorney which both parties admitted. In light of the version of the
defendants, it is highly improbable that a Power of Attorney would be constituted by the plaintiffs
authorizing the former to sell the subject property. This is because for all intents and purposes, the land is
already the defendants for if we are to follow their claim, they paid for the full amount of the same. It can
be safely concluded then that the Power of Attorney was unnecessary because the defendants, as
buyers, can compel the plaintiff-sellers to execute the transfer of the said property after the period of
prohibition has lapsed. The defendants, as owners, will have the right to do whatever they want with the
land even without an Irrevocable Power of Attorney. Since the presence of the Irrevocable Power of
Attorney is established, it is now the task of this Court to determine the validity of the sale made by virtue
of the said Power of Attorney. As what was said earlier, the Court subscribes to the points raised by the
plaintiffs. It was proved during trial that the signature of the wife was falsified. Therefore, it is as if the wife
never authorized the agent to sell her share of the subject land, it being conjugal property. It follows that
the sale of half of the land is invalid. However, it must be pointed out that the signature of the deceased
husband was never contested and is therefore deemed admitted. We now come to the half which
belongs to the deceased husband. The Law on Sales expressly prohibits the agent from purchasing the
property of the principal without the latters consent (Article 1491 of the Civil Code). It was established
from the records that defendant Plaridel Mingoa sold the subject land to his daughter Melanie. It is now
for the Court to decide whether this transaction is valid. x x x Considering that the sale took place in July
1978, it follows from simple mathematical computation that Melanie was then a minor (20 years of age)
when she allegedly bought the property from her father. Since Melanies father is the sub-agent of the
deceased principal, he is prohibited by law from purchasing the land without the latters consent. This
being the case, the sale is invalid for it appears that Plaridel Mingoa sold the land to himself. It should be
noted that the defendants could have easily presented Melanies birth certificate, it being at their disposal,
but they chose not to. Because of this, this Court is of the belief that the presumption that evidence
willfully suppressed would be adverse if produced arises.
The trial court denied respondents motion for reconsideration of the aforementioned decision in its Order of
August 22, 1996.
Aggrieved, the respondents appealed to the CA, where their case was docketed as CA-G.R. CV No.
54896. Holding that the petitioners were barred by prescription and laches to take any action against the respondents,
the CA, in its herein assailedDecision dated September 7, 2000, reversed and set aside the appealed decision, thereby
dismissing the complaint filed by the petitioners before the trial court. In full, the disposition reads:

WHEREFORE, in view of the foregoing, the Decision of the RTC Branch 92, Quezon City, in Civil
Case No. Q-94-19276, entitled, Heirs of Domingo Hernandez, Sr. vs. Dolores Camisura, et. al., is
hereby REVERSED AND SET ASIDE. A new one is hereby entered, DISMISSING the complaint in Civil
Case No. Q-94-19276 entitled, Heirs of Domingo Hernandez, Sr. vs. Dolores Camisura, et. al., filed by
the plaintiffs-appellees before the RTC Branch 92, Quezon City for lack of merit.
SO ORDERED.
Petitioners subsequent motion for reconsideration was denied by the CA in its impugned Resolution dated
December 29, 2000.
Hence, petitioners are now before this Court via the present recourse. The ten (10) assigned errors set forth in the
petition all boil down to the essential issue of whether the title of the subject property in the name of respondent Melanie
Mingoa may still be reconveyed to the petitioners. As we see it, the resolution thereof hinges on these two pivotal
questions: (1) whether there was a valid alienation involving the subject property; and (2) whether the action impugning
the validity of such alienation has prescribed and/or was barred by laches.
The Court shall deal first with the procedural issues raised by the respondents in their Comment.
We held in Vera-Cruz v. Calderon that:
As a general rule, only questions of law may be raised in a petition for review on certiorari to the
Supreme Court. Although it has long been settled that findings of fact are conclusive upon this Court,
there are exceptional circumstances which would require us to review findings of fact of the Court of
Appeals, to wit:
(1) the conclusion is a finding grounded entirely on speculation, surmise and
conjectures; (2) the inference made is manifestly mistaken; (3) there is grave abuse of
discretion; (4) the judgment is based on misapprehension of facts; (5) the findings of fact
are conflicting; (6) the Court of Appeals went beyond the issues of the case and its
findings are contrary to the admissions of both appellant and appellees; (7) the findings
of fact of the Court of Appeals are contrary to those of the trial court; (8) said
findings of fact are conclusions without citation of specific evidence on which they are
based; (9) the facts set forth in the decision as well as in the petitioners main and reply
briefs are not disputed by the respondents; (10) the finding of fact of the Court of Appeals
is premised on the supposed absence of evidence and is contradicted by evidence on
record. (emphasis ours)
The petition before us raises factual issues which are not proper in a petition for review under Rule 45 of the
Rules of Court. However, we find that one of the exceptional circumstances qualifying a factual review by the Court exists,
that is, the factual findings of the CA are at variance with those of the trial court. We shall then give due course to the
instant petition and review the factual findings of the CA.
Even if only petitioner Domingo Hernandez, Jr. executed the Verification/Certification against forum-shopping, this
will not deter us from proceeding with the judicial determination of the issues in this petition. As we ratiocinated in Heirs of
Olarte v. Office of the President:
The general rule is that the certificate of non-forum shopping must be signed by all the plaintiffs in
a case and the signature of only one of them is insufficient. However, the Court has also stressed that the
rules on forum shopping were designed to promote and facilitate the orderly administration of justice and
thus should not be interpreted with such absolute literalness as to subvert its own ultimate and legitimate
objective. The rule of substantial compliance may be availed of with respect to the contents of the
certification. This is because the requirement of strict compliance with the provisions regarding the
certification of non-forum shopping merely underscores its mandatory nature in that the certification
cannot be altogether dispensed with or its requirements completely disregarded. Thus, under justifiable
circumstances, the Court has relaxed the rule requiring the submission of such certification considering
that although it is obligatory, it is not jurisdictional.
In HLC Construction and Development Corporation v. Emily Homes Subdivision Homeowners
Association, it was held that the signature of only one of the petitioners in the certification against forum

shopping substantially complied with rules because all the petitioners share a common interest and invoke
a common cause of action or defense.
The same leniency was applied by the Court in Cavile v. Heirs of Cavile, because the lone
petitioner who executed the certification of non-forum shopping was a relative and co-owner of the other
petitioners with whom he shares a common interest. x x x
xxx
In the instant case, petitioners share a common interest and defense inasmuch as they
collectively claim a right not to be dispossessed of the subject lot by virtue of their and their deceased
parents construction of a family home and occupation thereof for more than 10 years. The commonality
of their stance to defend their alleged right over the controverted lot thus gave petitioners xxx authority to
inform the Court of Appeals in behalf of the other petitioners that they have not commenced any action or
claim involving the same issues in another court or tribunal, and that there is no other pending action or
claim in another court or tribunal involving the same issues.
xxx
Here, all the petitioners are immediate relatives who share a common interest in the land sought to be reconveyed
and a common cause of action raising the same arguments in support thereof. There was sufficient basis, therefore, for
Domingo Hernandez, Jr. to speak for and in behalf of his co-petitioners when he certified that they had not filed any action
or claim in another court or tribunal involving the same issues. Thus, the Verification/Certification that Hernandez, Jr.
executed constitutes substantial compliance under the Rules.
Anent the contention that the petition erroneously impleaded the CA as respondent in contravention of Section
4(a) of Rule 45 of the 1997 Rules of Civil Procedure, we shall apply our ruling in Simon v. Canlas, wherein we held that:
x x x [The] Court agrees that the correct procedure, as mandated by Section 4, Rule 45 of the 1997 Rules
of Civil Procedure, is not to implead the lower court which rendered the assailed decision. However,
impleading the lower court as respondent in the petition for review on certiorari does not automatically
mean the dismissal of the appeal but merely authorizes the dismissal of the petition. Besides, formal
defects in petitions are not uncommon. The Court has encountered previous petitions for review on
certiorari that erroneously impleaded the CA. In those cases, the Court merely called the petitioners
attention to the defects and proceeded to resolve the case on their merits.
The Court finds no reason why it should not afford the same liberal treatment in this case. While
unquestionably, the Court has the discretion to dismiss the appeal for being defective, sound policy
dictates that it is far better to dispose of cases on the merits, rather than on technicality as the latter
approach may result in injustice. This is in accordance with Section 6, Rule 1 of the 1997 Rules of Civil
Procedure which encourages a reading of the procedural requirements in a manner that will help secure
and not defeat justice.
We now come to the substantive issues.
As correctly found by the appellate court, the following facts are undisputed:
1.

Domingo Hernandez, Sr. was awarded a piece of real property in 1958 by the PHHC as part of the
governments housing program at the time. Title over the said property was issued in 1966 in the name of
Hernandez, Sr., after full payment for the property was received by the PHHC.

2.

Neither [petitioners] nor Hernandez, Sr., took possession of the said property. On the other hand, the
[respondents] took possession of the said property in 1966 and are in actual and physical possession
thereof up to the present, and have made considerable improvements thereon, including a residential
house where they presently reside.

3.

The Owners Duplicate Copy of the title over the property given by the PHHC to Hernandez, Sr. was in
the possession of Plaridel Mingoa, the latter being able to facilitate the cancellation of the said title and
[the issuance of] a new TCT xxx in the name of Melanie Mingoa.

4.

The realty taxes have been paid by [respondents], albeit in the name of Hernandez, Sr., but all official
receipts of tax payments are kept by the [respondents].

5.

From 1966 (the time when the [respondents] were able to possess the property) to 1983 (the time when
the [petitioners] had knowledge that the TCT in the name of Hernandez, Sr. had already been cancelled

by the Registry of Deeds of Quezon City) covers almost a span of 17 years; and from 1983 to 1995 (the
time when the Heirs filed the original action) is a period of another 12 years.
The SPA in favor of Dolores Camisura pertinently states that the latter is the lawful attorney-in-fact of Domingo B.
Hernandez, Sr., married to Sergia Hernandez, to do and perform, among others, the following acts and deeds:
1. To sign, execute and acknowledge all such contracts, deeds or other instruments which may be
required by the Peoples Homesite and Housing Corporation with respect to the purchase of that certain
parcel of land known and designated as Lot No. 15 Block E-89 of the Malaya Avenue Subdivision,
situated in Quezon City and containing an area of 520 square meters, more or less, which I have acquired
thru the CENTRAL BANK STAFF HOUSING CORPORATION;
2. To sign, execute and acknowledge all such contracts or other instruments which may deem necessary
or be required to sign, execute and acknowledge for the purpose of selling, transferring, conveying,
disposing of or alienating whatever rights I may have over that parcel of land mentioned above;
x x x.
The Deed of Transfer of Rights, also executed by Hernandez, Sr. in Camisuras favor, expressly states that the
former, in consideration of the amount of P6,500.00, transfers his rights over the subject property to the latter. Notably,
such deed was simultaneously executed with the SPA on February 14, 1963.
From the foregoing, the Court cannot but conclude that the SPA executed by Hernandez, Sr. in respondent
Camisura's favor was, in reality, an alienation involving the subject property. We particularly note that Hernandez, Sr.,
aside from executing said SPA, likewise sold his rights and interests over the property awarded by the PHHC to
Camisura. The CA committed no error when it ruled:
x x x Appreciating the case in its entirety, the purported SPA appear to be merely a grant of authority to
Camisura (and then to Plaridel Mingoa) to sell and dispose of the subject property as well as a grant of
right to purchase the said property; but in essence, such SPA are disguised deeds of sale of the property
executed in circumventing the retention period restriction over the said property. Verily, the parties knew
that the land in question could not be alienated in favor of any third person within one (1) year without the
approval of the PHHC.
Having ruled that the SPA in favor of Camisura was a contract of sale, the next question is whether or not such
sale was valid.
To constitute a valid contract, the Civil Code requires the concurrence of the following elements: (1) cause, (2)
object, and (3) consent.
The consent of Domingo Hernandez, Sr. to the contract is undisputed, thus, the sale of his share in the conjugal
property was valid. With regard to the consent of his wife, Sergia Hernandez, to the sale involving their conjugal property,
the trial court found that it was lacking because said wifes signature on the SPA was falsified. Notably, even the CA
observed that the forgery was so blatant as to be remarkably noticeable to the naked eye of an ordinary person. Having
compared the questioned signature on the SPA with those of the documents bearing the sample standard signature of
Sergia Hernandez, we affirm both lower courts' findings regarding the forgery.
However, Sergias lack of consent to the sale did not render the transfer of her share invalid.
Petitioners contend that such lack of consent on the part of Sergia Hernandez rendered the SPAs and the deed of
sale fictitious, hence null and void in accordance with Article 1409 of the Civil Code. Petitioners likewise contend that an
action for the declaration of the non-existence of a contract under Article 1410 does not prescribe.
We find, after meticulous review of the facts, that Articles 1409 and 1410 are not applicable to the matter now
before us.
It bears stressing that the subject matter herein involves conjugal property. Said property was awarded to Domingo
Hernandez, Sr. in 1958. The assailed SPAs were executed in 1963 and 1964. Title in the name of Domingo Hernandez,
Sr. covering the subject property was issued on May 23, 1966. The sale of the property to Melanie Mingoa and the
issuance of a new title in her name happened in 1978. Since all these events occurred before the Family Code took effect
in 1988, the provisions of the New Civil Code govern these transactions. We quote the applicable provisions, to wit:

Art. 165. The husband is the administrator of the conjugal partnership.


Art. 166. Unless the wife has been declared a non compos mentis or a spendthrift, or is under
civil interdiction or is confined in a leprosarium, the husband cannot alienate or encumber any real
property of the conjugal partnership without the wifes consent. If she refuses unreasonably to give her
consent, the court may compel her to grant the same. x x x.
Art. 173. The wife may, during the marriage, and within ten years from the transaction
questioned, ask the courts for the annulment of any contract of the husband entered into without her
consent, when such consent is required, or any act or contract of the husband which tends to defraud her
or impair her interest in the conjugal partnership property. Should the wife fail to exercise this right, she or
her heirs, after the dissolution of the marriage, may demand the value of property fraudulently alienated
by the husband. (Emphasis ours.)
Notwithstanding the foregoing, petitioners argue that the disposition of conjugal property made by a husband
without the wifes consent is null and void and the right to file an action thereon is imprescriptible, in accordance
with Garcia v. CA andBucoy v. Paulino.
Concededly, in the aforementioned cases of Garcia and Bucoy, the contracts involving the sale of conjugal property
by the husband without the wife's consent were declared null and void by this Court. But even in Bucoy, we significantly
ruled, in reference to Article 173, that:
The plain meaning attached to the plain language of the law is that the contract, in its entirety,
executed by the husband without the wifes consent, may be annulled by the wife. (emphasis ours)
In succeeding cases, we held that alienation and/or encumbrance of conjugal property by the husband without the
wifes consent is not null and void but merely voidable.
In Sps. Alfredo v. Sps. Borras, we held that:
The Family Code, which took effect on 3 August 1988, provides that any alienation or
encumbrance made by the husband of the conjugal partnership property without the consent of the wife is
void. However, when the sale is made before the effectivity of the Family Code, the applicable law is the
Civil Code.
Article 173 of the Civil Code provides that the disposition of conjugal property without the wife's
consent is not void but merely voidable.
We likewise made the same holding in Pelayo v. Perez:
xxx [Under] Article 173, in relation to Article 166, both of the New Civil Code, which was still in
effect on January 11, 1988 when the deed in question was executed, the lack of marital consent to the
disposition of conjugal property does not make the contract void ab initio but merely voidable.
In Vera-Cruz v. Calderon, the Court noted the state of jurisprudence and elucidated on the matter, thus:
In the recent case of Heirs of Ignacia Aguilar-Reyes v. Spouses Mijares, we reiterated the rule
that the husband cannot alienate or encumber any conjugal real property without the consent, express or
implied, of the wife, otherwise, the contract is voidable. To wit:
Indeed, in several cases the Court has ruled that such alienation or encumbrance
by the husband is void. The better view, however, is to consider the transaction as
merely voidable and not void. This is consistent with Article 173 of the Civil Code
pursuant to which the wife could, during the marriage and within 10 years from the
questioned transaction, seek its annulment.
xxx
Likewise, in the case of Heirs of Christina Ayuste v. Court of Appeals, we declared that:
There is no ambiguity in the wording of the law. A sale of real property of the
conjugal partnership made by the husband without the consent of his wife is

voidable. The action for annulment must be brought during the marriage and within ten
years from the questioned transaction by the wife. Where the law speaks in clear and
categorical language, there is no room for interpretation there is room only for
application.
x x x (Emphasis ours.)
Here, the husbands first act of disposition of the subject property occurred in 1963 when he executed the SPA and
the Deed of Transfer of Rights in favor of Dolores Camisura. Thus, the right of action of the petitioners accrued in 1963,
as Article 173 of the Civil Code provides that the wife may file for annulment of a contract entered into by the husband
without her consent within ten (10) years from the transaction questioned. Petitioners filed the action for reconveyance in
1995. Even if we were to consider that their right of action arose when they learned of the cancellation of TCT No.
107534 and the issuance of TCT No. 290121 in Melanie Mingoas name in 1993, still, twelve (12) years have lapsed since
such discovery, and they filed the petition beyond the period allowed by law. Moreover, when Sergia Hernandez, together
with her children, filed the action for reconveyance, the conjugal partnership of property with Hernandez, Sr. had already
been terminated by virtue of the latter's death on April 16, 1983. Clearly, therefore, petitioners action has prescribed.
And this is as it should be, for in the same Vera-Cruz case, we further held that:
xxx [Under] Article 173 of the New Civil Code, an action for the annulment of any contract
entered into by the husband without the wifes consent must be filed (1) during the marriage; and (2)
within ten years from the transaction questioned. Where any one of these two conditions is lacking,
the action will be considered as having been filed out of time.
In the case at bar, while respondent filed her complaint for annulment of the deed of sale on July
8, 1994, i.e., within the ten-year period counted from the execution of the deed of sale of the property on
June 3, 1986, the marriage between her and Avelino had already been dissolved by the death of the latter
on November 20, 1993. In other words, her marriage to Avelino was no longer subsisting at the time she
filed her complaint. Therefore, the civil case had already been barred by prescription. (Emphasis ours.)
Thus, the failure of Sergia Hernandez to file with the courts an action for annulment of the contract during the
marriage and within ten (10) years from the transaction necessarily barred her from questioning the sale of the subject
property to third persons.
As we held in Vda. De Ramones v. Agbayani:
In Villaranda v. Villaranda, et al., this Court, through Mr. Justice Artemio V. Panganiban, ruled that
without the wifes consent, the husbands alienation or encumbrance of conjugal property prior to the
effectivity of the Family Code is not void, but merely voidable. However, the wifes failure to file with
the courts an action for annulment of the contract during the marriage and within ten (10) years
from the transaction shall render the sale valid. x x x (emphasis ours)
More than having merely prescribed, petitioners action has likewise become stale, as it is barred by laches.
In Isabela Colleges v. Heirs of Nieves-Tolentino, this Court held:
Laches means the failure or neglect for an unreasonable and unexplained length of time to do that
which, by observance of due diligence, could or should have been done earlier. It is negligence or
omission to assert a right within a reasonable time, warranting the presumption that the party entitled to
assert his right either has abandoned or declined to assert it. Laches thus operates as a bar in equity.
xxx
The time-honored rule anchored on public policy is that relief will be denied to a litigant whose
claim or demand has become stale, or who has acquiesced for an unreasonable length of time, or who
has not been vigilant or who has slept on his rights either by negligence, folly or inattention. In other
words, public policy requires, for peace of society, the discouragement of claims grown stale for nonassertion; thus laches is an impediment to the assertion or enforcement of a right which has become,
under the circumstances, inequitable or unfair to permit.

Pertinently, in De la Calzada-Cierras v. CA, we ruled that a complaint to recover the title and possession of the lot
filed 12 years after the registration of the sale is considered neglect for an unreasonably long time to assert a right to the
property.
Here, petitioners' unreasonably long period of inaction in asserting their purported rights over the subject property
weighs heavily against them. We quote with approval the findings of the CA that:
It was earlier shown that there existed a period of 17 years during which time Hernandez, Sr. xxx
never even questioned the defendants-appellants possession of the property; also there was another
interval of 12 years after discovering that the TCT of the property in the name of Hernandez, Sr. before
the Heirs of Hernandez instituted an action for the reconveyance of the title of the property.
xxx
The fact that the Mingoa's were able to take actual possession of the subject property for such a
long period without any form of cognizable protest from Hernandez, Sr. and the plaintiffs-appellees
strongly calls for the application of the doctrine of laches. It is common practice in the real estate industry,
an ocular inspection of the premises involved is a safeguard to the cautious and prudent purchaser
usually takes, and should he find out that the land he intends to buy is occupied by anybody else other
than the seller who is not in actual possession, it could then be incumbent upon the purchaser to verify
the extent of the occupant's possessory rights. The plaintiffs-appellees asseverate that the award was
made in favor of Hernandez, Sr. in 1958; full payment made in 1963; and title issued in 1966. It would
thus be contrary to ordinary human conduct (and prudence dictates otherwise) for any awardee of real
property not to visit and inspect even once, the property awarded to him and find out if there are any
transgressors in his property.
Furthermore, Hernandez, Sr.'s inaction during his lifetime lends more credence to the defendantsappellants assertion that the said property was indeed sold by Hernandez, Sr. by way of the SPAs, albeit
without the consent of his wife. xxx
In addition, the reasons of poverty and poor health submitted by the plaintiffs-appellees could not
justify the 12 years of delay in filing a complaint against the defendants-appellants. The records are
bereft of any evidence to support the idea that the plaintiffs-appellees diligently asserted their rights over
the said property after having knowledge of the cancellation of the TCT issued in Hernandez
name. Moreover the Court seriously doubts the plausibility of this contention since what the plaintiffsappellees are trying to impress on this Court's mind is that they did not know anything at all except only
shortly before the death of Hernandez. To accept that not even the wife knew of the transactions made
by Hernandez, Sr. nor anything about the actual possession of the defendants-appellants for such a long
period is to Us absurd if not fantastic.
In sum, the rights and interests of the spouses Hernandez over the subject property were validly transferred to
respondent Dolores Camisura. Since the sale of the conjugal property by Hernandez, Sr. was without the consent of his
wife, Sergia, the same is voidable; thus, binding unless annulled. Considering that Sergia failed to exercise her right to
ask for the annulment of the sale within the prescribed period, she is now barred from questioning the validity
thereof. And more so, she is precluded from assailing the validity of the subsequent transfers from Camisura to Plaridel
Mingoa and from the latter to Melanie Mingoa. Therefore, title to the subject property cannot anymore be reconveyed to
the petitioners by reason of prescription and laches. The issues of prescription and laches having been resolved, it is no
longer necessary to discuss the other issues raised in this petition.
WHEREFORE, the instant petition is DENIED and the assailed Decision dated September 7, 2000 and Resolution
dated December 29, 2000 of the Court of Appeals are hereby AFFIRMED.
Costs against the petitioners.
SO ORDERED.
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,

G.R. No. 157537

Present:

represented by
LEONORA B. GO,
Petitioners,
-versus ESTER L. SERVACIO and RITO B. GO,
Respondents.

CORONA, C.J., Chairperson,


LEONARDO-DE CASTRO,
BERSAMIN,
DEL CASTILLO, and
VILLARAMA, JR., JJ.
Promulgated:

September 7, 2011
x-----------------------------------------------------------------------------------------x
DECISION
BERSAMIN, J.:
The disposition by sale of a portion of the conjugal property by the surviving spouse without the prior liquidation mandated
by Article 130 of the Family Code is not necessarily void if said portion has not yet been allocated by judicial or
extrajudicial partition to another heir of the deceased spouse. At any rate, the requirement of prior liquidation does not
prejudice vested rights.
Antecedents
On February 22, 1976, Jesus B. Gaviola sold two parcels of land with a total area of 17,140 square meters situated in
Southern Leyte to Protacio B. Go, Jr. (Protacio, Jr.). Twenty three years later, or on March 29, 1999, Protacio, Jr. executed
an Affidavit of Renunciation and Waiver, whereby he affirmed under oath that it was his father, Protacio Go, Sr. (Protacio,
Sr.), not he, who had purchased the two parcels of land (the property).
On November 25, 1987, Marta Barola Go died. She was the wife of Protacio, Sr. and mother of the petitioners. On
December 28, 1999, Protacio, Sr. and his son Rito B. Go (joined by Ritos wife Dina B. Go) sold a portion of the property
with an area of 5,560 square meters to Ester L. Servacio (Servacio) for 5,686,768.00. On March 2, 2001, the petitioners
demanded the return of the property, but Servacio refused to heed their demand. After barangay proceedings failed to
resolve the dispute, they sued Servacio and Rito in the Regional Trial Court in Maasin City, Southern Leyte (RTC) for the
annulment of the sale of the property.
The petitioners averred that following Protacio, Jrs 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.
On October 3, 2002, the RTC declared that the property was the conjugal property of Protacio, Sr. and Marta, not the
exclusive property of Protacio, Sr., because there were three vendors in the sale to Servacio (namely: Protacio, Sr., Rito,
and Dina); that the participation of Rito and Dina as vendors had been by virtue of their being heirs of the late Marta; that
under Article 160 of the Civil Code, the law in effect when the property was acquired, all property acquired by either
spouse during the marriage was conjugal unless there was proof that the property thus acquired pertained exclusively to
the husband or to the wife; and that Protacio, Jr.s renunciation was grossly insufficient to rebut the legal presumption.
Nonetheless, the RTC affirmed the validity of the sale of the property, holding that: xxx As long as the portion sold,
alienated or encumbered will not be allotted to the other heirs in the final partition of the property, or to state it plainly, as
long as the portion sold does not encroach upon the legitimate (sic) of other heirs, it is valid. Quoting Tolentinos
commentary on the matter as authority, the RTC opined:
In his comment on Article 175 of the New Civil Code regarding the dissolution of the conjugal partnership,
Senator Arturo Tolentino, says [sic]
Alienation by the survivor. After the death of one of the spouses, in case it is necessary to
sell any portion of the community property in order to pay outstanding obligation of the
partnership, such sale must be made in the manner and with the formalities established by the
Rules of Court for the sale of the property of the deceased persons. Any sale, transfer,

alienation or disposition of said property affected without said formalities shall be null and void,
except as regards the portion that belongs to the vendor as determined in the liquidation and
partition. Pending the liquidation, the disposition must be considered as limited only to the
contingent share or interest of the vendor in the particular property involved, but not to the
corpus of the property. This rule applies not only to sale but also to mortgages. The alienation,
mortgage or disposal of the conjugal property without the required formality, is not however,
null ab initio, for the law recognizes their validity so long as they do not exceed the portion
which, after liquidation and partition, should pertain to the surviving spouse who made the
contract. [underlining supplied]
It seems clear from these comments of Senator Arturo Tolentino on the provisions of the New Civil Code
and the Family Code on the alienation by the surviving spouse of the community property that
jurisprudence remains the same - that the alienation made by the surviving spouse of a portion of the
community property is not wholly void ab initiodespite Article 103 of the Family Code, and shall be valid to
the extent of what will be allotted, in the final partition, to the vendor. And rightly so, because why
invalidate the sale by the surviving spouse of a portion of the community property that will eventually be
his/her share in the final partition? Practically there is no reason for that view and it would be absurd.
Now here, in the instant case, the 5,560 square meter portion of the 17,140 square-meter conjugal lot is
certainly mush (sic) less than what vendors Protacio Go and his son Rito B. Go will eventually get as their
share in the final partition of the property. So the sale is still valid.
WHEREFORE, premises considered, complaint is hereby DISMISSED without pronouncement as to cost
and damages.
SO ORDERED.
The RTCs denial of their motion for reconsideration prompted the petitioners to appeal directly to the Court on a pure
question of law.
Issue
The petitioners claim that Article 130 of the Family Code is the applicable law; and that the sale by Protacio, Sr., et al. to
Servacio was void for being made without prior liquidation.
In contrast, although they have filed separate comments, Servacio and Rito both argue that Article 130 of
the Family Code was inapplicable; that the want of the liquidation prior to the sale did not render the sale invalid, because
the sale was valid to the extent of the portion that was finally allotted to the vendors as his share; and that the sale did not
also prejudice any rights of the petitioners as heirs, considering that what the sale disposed of was within the aliquot
portion of the property that the vendors were entitled to as heirs.

Ruling
The appeal lacks merit.
Article 130 of the Family Code reads:
Article 130. Upon the termination of the marriage by death, the conjugal partnership property shall
be liquidated in the same proceeding for the settlement of the estate of the deceased.
If no judicial settlement proceeding is instituted, the surviving spouse shall liquidate the conjugal
partnership property either judicially or extra-judicially within one year from the death of the deceased
spouse. If upon the lapse of the six month period no liquidation is made, any disposition or encumbrance
involving the conjugal partnership property of the terminated marriage shall be void.
Should the surviving spouse contract a subsequent marriage without compliance with the foregoing
requirements, a mandatory regime of complete separation of property shall govern the property relations
of the subsequent marriage.
Article 130 is to be read in consonance with Article 105 of the Family Code, viz:

Article 105. In case the future spouses agree in the marriage settlements that the regime of
conjugal partnership of gains shall govern their property relations during marriage, the provisions in this
Chapter shall be of supplementary application.
The provisions of this Chapter shall also apply to conjugal partnerships of gains already
established between spouses before the effectivity of this Code, without prejudice to vested rights
already acquired in accordance with the Civil Code or other laws, as provided in Article 256. (n)
[emphasis supplied]
It is clear that conjugal partnership of gains established before and after the effectivity of the Family Code are
governed by the rules found in Chapter 4 (Conjugal Partnership of Gains) of Title IV (Property Relations Between
Husband And Wife) of theFamily 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, 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 done either by agreement or by judicial decree. Until then, all that he had was an ideal or abstract quota in Martas
share. 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. Consequently, the sale by Protacio, Sr. and Rito as coowners 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. This result conforms to the wellestablished principle that the binding force of a contract must be recognized as far as it is legally possible to do so
(quando res non valet ut ago, valeat quantum valere potest).
Article 105 of the Family Code, supra, expressly provides that the applicability of the rules on dissolution of the
conjugal partnership is without prejudice to vested rights already acquired in accordance with the Civil Code or other laws.
This provision gives another reason not to declare the sale as entirely void. Indeed, such a declaration prejudices the
rights of Servacio who had already acquired the shares of Protacio, Sr. and Rito in the property subject of the sale.
In their separate comments, the respondents aver that each of the heirs had already received a certain allotted
portion at the time of the sale, and that Protacio, Sr. and Rito sold only the portions adjudicated to and owned by them.
However, they did not present any public document on the allocation among her heirs, including themselves, of specific
shares in Martas estate. Neither did they aver that the conjugal properties had already been liquidated and partitioned.
Accordingly, pending a partition among the heirs of Marta, the efficacy of the sale, and whether the extent of the property
sold adversely affected the interests of the petitioners might not yet be properly decided with finality. The appropriate
recourse to bring that about is to commence an action for judicial partition, as instructed in Bailon-Casilao v. Court of
Appeals, to wit:
From the foregoing, it may be deduced that since a co-owner is entitled to sell his undivided
share, a sale of the entire property by one

co-owner without the consent of the other co-owners is not null and void. However, only the rights
of the co-owner-seller are transferred, thereby making the buyer a co-owner of the property.
The proper action in cases like this is not for the nullification of the sale or for the recovery of
possession of the thing owned in common from the third person who substituted the co-owner or co-

owners who alienated their shares, but the DIVISION of the common property as if it continued to remain
in the possession of the co-owners who possessed and administered it [Mainit v. Bandoy, supra].
Thus, it is now settled that the appropriate recourse of co-owners in cases where their
consent were not secured in a sale of the entire property as well as in a sale merely of the
undivided shares of some of the co-owners is an action for PARTITION under Rule 69 of the
Revised Rules of Court. xxx
In the meanwhile, Servacio would be a trustee for the benefit of the co-heirs of her vendors in respect of any
portion that might not be validly sold to her. The following observations of Justice Paras are explanatory of this result, viz:
xxx [I]f it turns out that the property alienated or mortgaged really would pertain to the share of the
surviving spouse, then said transaction is valid. If it turns out that there really would be, after liquidation,
no more conjugal assets then the whole transaction is null and void. But if it turns out that half of the
property thus alienated or mortgaged belongs to the husband as his share in the conjugal partnership,
and half should go to the estate of the wife, then that corresponding to the husband is valid, and that
corresponding to the other is not. Since all these can be determined only at the time the liquidation is
over, it follows logically that a disposal made by the surviving spouse is not void ab initio. Thus, it has
been held that the sale of conjugal properties cannot be made by the surviving spouse without the legal
requirements. The sale is void as to the share of the deceased spouse (except of course as to that portion
of the husbands share inherited by her as the surviving spouse). The buyers of the property that could not
be validly sold become trustees of said portion for the benefit of the husbands other heirs, the cestui que
trust ent. Said heirs shall not be barred by prescription or by laches (See Cuison, et al. v. Fernandez, et
al.,L-11764, Jan.31, 1959.)
WHEREFORE, we DENY the petition for review on certiorari; andAFFIRM the decision of the Regional
Trial Court.

The petitioners shall pay the costs of suit.


SO ORDERED.
b. Under the Family Code
GUIANG VS CA
PANGANIBAN, J.:
The sale of a conjugal property requires the consent of both the husband and the wife. The absence of the consent
of one renders the sale null and void, while the vitiation thereof makes it merely voidable. Only in the latter case can
ratification cure the defect.
These were the principles that guided the Court in deciding this petition for review of the Decision dated January 30,
1996 and the Resolution dated May 28, 1996, promulgated by the Court of Appeals in CA-GR CV No. 41758, affirming the
Decision of the lower court and denying reconsideration, respectively.
On May 28, 1990, Private Respondent Gilda Corpuz filed an Amended Complaint against her husband Judie Corpuz
and Petitioners-Spouses Antonio and Luzviminda Guiang. The said Complaint sought the declaration of a certain deed of
sale, which involved the conjugal property of private respondent and her husband, null and void. The case was raffled to
the Regional Trial Court of Koronadal, South Cotabato, Branch 25. In due course, the trial court rendered a
Decision dated September 9, 1992, disposing as follows:
ACCORDINGLY, judgment is rendered for the plaintiff and against the defendants,
1.
Declaring both the Deed of Transfer of Rights dated March 1, 1990 (Exh. A) and the amicable settlement dated
March 16, 1990 (Exh. B) as null and void and of no effect;
2.
Recognizing as lawful and valid the ownership and possession of plaintiff Gilda Corpuz over the remaining one-half
portion of Lot 9, Block 8, (LRC) Psd-165409 which has been the subject of the Deed of Transfer of Rights (Exh. A);
3.
Ordering plaintiff Gilda Corpuz to reimburse defendants Luzviminda and Antonio Guiang the amount of NINE
THOUSAND (P9,000.00) PESOS corresponding to the payment made by defendants Guiangs to Manuel Callejo for the
unpaid balance of the account of plaintiff in favor of Manuel Callejo, and another sum of P379.62 representing one-half of

the amount of realty taxes paid by defendants Guiangs on Lot 9, Block 8, (LRC) Psd-165409, both with legal interests
thereon computed from the finality of the decision.
No pronouncement as to costs in view of the factual circumstances of the case.
Dissatisfied, petitioners-spouses filed an appeal with the Court of Appeals. Respondent Court, in its challenged
Decision, ruled as follows:
WHEREFORE, the appealed decision of the lower court in Civil Case No. 204 is hereby AFFIRMED by this
Court. No costs considering plaintiff-appellees failure to file her brief, despite notice.
Reconsideration was similarly denied by the same court in its assailed Resolution:
Finding that the issues raised in defendants-appellants motion for reconsideration of Our decision in this case of
January 30, 1996, to be a mere rehash of the same issues which We have already passed upon in the said
decision, and there [being] no cogent reason to disturb the same, this Court RESOLVES to DENY the instant
motion for reconsideration for lack of merit.
The facts of this case are simple. Over the objection of private respondent and while she was in Manila seeking
employment, her husband sold to the petitioners-spouses one half of their conjugal property, consisting of their residence
and the lot on which it stood. The circumstances of this sale are set forth in the Decision of Respondent Court, which
quoted from the Decision of the trial court, as follows:
1.
Plaintiff Gilda Corpuz and defendant Judie Corpuz are legally married spouses. They were married on
December 24, 1968 in Bacolod City, before a judge. This is admitted by defendants-spouses Antonio and
Luzviminda Guiang in their answer, and also admitted by defendant Judie Corpuz when he testified in court (tsn.
p..3, June 9, 1992), although the latter says that they were married in 1967. The couple have three children,
namely: Junie 18 years old, Harriet 17 years of age, and Jodie or Joji, the youngest, who was 15 years of
age in August, 1990 when her mother testified in court.
Sometime on February 14, 1983, the couple Gilda and Judie Corpuz, with plaintiff-wife Gilda Corpuz as vendee,
bought a 421 sq. meter lot located in Barangay Gen. Paulino Santos (Bo. 1), Koronadal, South Cotabato, and
particularly known as Lot 9, Block 8, (LRC) Psd-165409 from Manuel Callejo who signed as vendor through a
conditional deed of sale for a total consideration of P14,735.00. The consideration was payable in installment,
with right of cancellation in favor of vendor should vendee fail to pay three successive installments (Exh. 2, tsn.
p. 6, February 14, 1990).
2.
Sometime on April 22, 1988, the couple Gilda and Judie Corpuz sold one-half portion of their Lot No. 9,
Block 8, (LRC) Psd-165409 to the defendants-spouses Antonio and Luzviminda Guiang. The latter have since
then occupied the one-half portion [and] built their house thereon (tsn. p. 4, May 22, 1992). They are thus
adjoining neighbors of the Corpuzes.
3.
Plaintiff Gilda Corpuz left for Manila sometime in June 1989. She was trying to look for work abroad, in
[the] Middle East. Unfortunately, she became a victim of an unscrupulous illegal recruiter. She was not able to go
abroad. She stayed for sometime in Manila however, coming back to Koronadal, South Cotabato, x x x on March
11, 1990. Plaintiffs departure for Manila to look for work in the Middle East was with the consent of her husband
Judie Corpuz (tsn. p. 16, Aug.12, 1990; p. 10, Sept. 6, 1991).
After his wifes departure for Manila, defendant Judie Corpuz seldom went home to the conjugal dwelling. He
stayed most of the time at his place of work at Samahang Nayon Building, a hotel, restaurant, and a
cooperative. Daughter Harriet Corpuz went to school at Kings College, Bo. 1, Koronadal, South Cotabato, but
she was at the same time working as household help of, and staying at, the house of Mr. Panes. Her brother
Junie was not working. Her younger sister Jodie (Joji) was going to school. Her mother sometimes sent them
money (tsn. p. 14, Sept. 6, 1991).
Sometime in January 1990, Harriet Corpuz learned that her father intended to sell the remaining one-half portion
including their house, of their homelot to defendants Guiangs. She wrote a letter to her mother informing
her. She [Gilda Corpuz] replied that she was objecting to the sale. Harriet, however, did not inform her father
about this; but instead gave the letter to Mrs. Luzviminda Guiang so that she [Guiang] would advise her father
(tsn. pp. 16-17, Sept. 6, 1991).
4.
However, in the absence of his wife Gilda Corpuz, defendant Judie Corpuz pushed through the sale of the
remaining one-half portion of Lot 9, Block 8, (LRC) Psd-165409. On March 1, 1990, he sold to defendant
Luzviminda Guiang thru a document known as Deed of Transfer of Rights (Exh. A) the remaining one-half
portion of their lot and the house standing thereon for a total consideration of P30,000.00 of which P5,000.00
was to be paid in June , 1990. Transferor Judie Corpuzs children Junie and Harriet signed the document as
witnesses.

Four (4) days after March 1, 1990 or on March 5, 1990, obviously to cure whatever defect in defendant Judie
Corpuzs title over the lot transferred, defendant Luzviminda Guiang as vendee executed another agreement
over Lot 9, Block 8, (LRC) Psd-165408 (Exh. 3), this time with Manuela Jimenez Callejo, a widow of the original
registered owner from whom the couple Judie and Gilda Corpuz originally bought the lot (Exh. 2), who signed as
vendor for a consideration of P9,000.00. Defendant Judie Corpuz signed as a witness to the sale (Exh. 3A). The new sale (Exh. 3) describes the lot sold as Lot 8, Block 9, (LRC) Psd-165408 but it is obvious from the
mass of evidence that the correct lot is Lot 8, Block 9, (LRC) Psd-165409, the very lot earlier sold to the couple
Gilda and Judie Corpuz.
5.
Sometime on March 11, 1990, plaintiff returned home. She found her children staying with other
households. Only Junie was staying in their house. Harriet and Joji were with Mr. Panes. Gilda gathered her
children together and stayed at their house. Her husband was nowhere to be found. She was informed by her
children that their father had a wife already.
6.
For staying in their house sold by her husband, plaintiff was complained against by defendant Luzviminda
Guiang and her husband Antonio Guiang before the Barangay authorities of Barangay General Paulino Santos
(Bo. 1), Koronadal, South Cotabato, for trespassing (tsn. p. 34, Aug. 17, 1990). The case was docketed by the
barangay authorities as Barangay Case No. 38 for trespassing. On March 16, 1990, the parties thereat signed a
document known as amicable settlement. In full, the settlement provides for, to wit:
That respondent, Mrs. Gilda Corpuz and her three children, namely: Junie, Hariet and Judie to leave
voluntarily the house of Mr. and Mrs. Antonio Guiang, where they are presently boarding without any
charge, on or before April 7, 1990.
FAIL NOT UNDER THE PENALTY OF THE LAW.
Believing that she had received the shorter end of the bargain, plaintiff went to the Barangay Captain of
Barangay Paulino Santos to question her signature on the amicable settlement. She was referred however to
the Officer-In-Charge at the time, a certain Mr. de la Cruz. The latter in turn told her that he could not do
anything on the matter (tsn. p. 31, Aug. 17, 1990).
This particular point was not rebutted. The Barangay Captain who testified did not deny that Mrs. Gilda Corpuz
approached him for the annulment of the settlement. He merely said he forgot whether Mrs. Corpuz had
approached him (tsn. p. 13, Sept. 26, 1990). We thus conclude that Mrs. Corpuz really approached the
Barangay Captain for the annulment of the settlement. Annulment not having been made, plaintiff stayed put in
her house and lot.
7.
Defendant-spouses Guiang followed thru the amicable settlement with a motion for the execution of the
amicable settlement, filing the same with the Municipal Trial Court of Koronadal, South Cotabato. The
proceedings [are] still pending before the said court, with the filing of the instant suit.
8.
As a consequence of the sale, the spouses Guiang spent P600.00 for the preparation of the Deed of
Transfer of Rights, Exh. A;P9,000.00 as the amount they paid to Mrs. Manuela Callejo, having assumed the
remaining obligation of the Corpuzes to Mrs. Callejo (Exh. 3); P100.00 for the preparation of Exhibit 3; a total
of P759.62 basic tax and special educational fund on the lot; P127.50 as the total documentary stamp tax on the
various documents; P535.72 for the capital gains tax; P22.50 as transfer tax; a standard fee ofP17.00;
certification fee of P5.00. These expenses particularly the taxes and other expenses towards the transfer of the
title to the spouses Guiangs were incurred for the whole Lot 9, Block 8, (LRC) Psd-165409.
Respondent Court found no reversible error in the trial courts ruling that any alienation or encumbrance by the
husband of the conjugal property without the consent of his wife is null and void as provided under Article 124 of the
Family Code. It also rejected petitioners contention that the amicable settlement ratified said sale, citing Article 1409 of
the Code which expressly bars ratification of the contracts specified therein, particularly those prohibited or declared void
by law.
Hence, this petition.
In their Memorandum, petitioners assign to public respondent the following errors:
I
Whether or not the assailed Deed of Transfer of Rights was validly executed.
II
Whether or not the Court of Appeals erred in not declaring as voidable contract under Art. 1390 of the Civil Code
the impugned Deed of Transfer of Rights which was validly ratified thru the execution of the amicable settlement
by the contending parties.

III
Whether or not the Court of Appeals erred in not setting aside the findings of the Court a quo which recognized
as lawful and valid the ownership and possession of private respondent over the remaining one half (1/2) portion
of the subject property.
In a nutshell, petitioners-spouses contend that (1) the contract of sale (Deed of Transfer of Rights) was merely
voidable, and (2) such contract was ratified by private respondent when she entered into an amicable settlement with
them.
The petition is bereft of merit.
Petitioners insist that the questioned Deed of Transfer of Rights was validly executed by the partieslitigants in good faith and for valuable consideration. The absence of private respondents consent merely rendered the
Deed voidable under Article 1390 of the Civil Code, which provides:
ART. 1390. The following contracts are voidable or annullable, even though there may have been no damage to
the contracting parties:
xxx
xxx
xxx
(2)
Those where the consent is vitiated by mistake, violence, intimidation, undue influence or fraud.
These contracts are binding, unless they are annulled by a proper action in court. They are susceptible of
ratification.(n)
The error in petitioners contention is evident. Article 1390, par. 2, refers to contracts visited by vices of
consent, i.e., contracts which were entered into by a person whose consent was obtained and vitiated through mistake,
violence, intimidation, undue influence or fraud. In this instance, private respondents consent to the contract of sale of
their conjugal property was totally inexistent or absent. Gilda Corpuz, on direct examination, testified thus:
Q Now, on March 1, 1990, could you still recall where you were?
A
I was still in Manila during that time.
xxx
xxx
xxx
ATTY. FUENTES:
Q When did you come back to Koronadal, South Cotabato?
A
That was on March 11, 1990, Maam.
Q Now, when you arrived at Koronadal, was there any problem which arose concerning the ownership of your
residential house at Callejo Subdivision?
A
When I arrived here in Koronadal, there was a problem which arose regarding my residential house and lot
because it was sold by my husband without my knowledge.
This being the case, said contract properly falls within the ambit of Article 124 of the Family Code, which was
correctly applied by the two lower courts:
ART. 124. The administration and enjoyment of the conjugal partnership property shall belong to both spouses
jointly. In case of disagreement, the husbands decision shall prevail, subject to recourse to the court by the wife
for proper remedy, which must be availed of within five years from the date of the contract implementing such
decision.
In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the
conjugal properties, the other spouse may assume sole powers of administration. These powers do not include
the powers of disposition or encumbrance which must have the authority of the court or the written consent of the
other spouse. In the absence of such authority or consent, the disposition or encumbrance shall be
void. However, the transaction shall be construed as a continuing offer on the part of the consenting spouse and
the third person, and may be perfected as a binding contract upon the acceptance by the other spouse or
authorization by the court before the offer is withdrawn by either or both offerors.(165a) (Italics supplied)
Comparing said law with its equivalent provision in the Civil Code, the trial court adroitly explained the amendatory
effect of the above provision in this wise:
The legal provision is clear. The disposition or encumbrance is void. It becomes still clearer if we compare the
same with the equivalent provision of the Civil Code of the Philippines. Under Article 166 of the Civil Code, the
husband cannot generally alienate or encumber any real property of the conjugal partnership without the wifes
consent. The alienation or encumbrance if so made however is not null and void. It is merely voidable. The

offended wife may bring an action to annul the said alienation or encumbrance. Thus, the provision of Article 173
of the Civil Code of the Philippines, to wit:
Art. 173. The wife may, during the marriage and within ten years from the transaction questioned, ask
the courts for the annulment of any contract of the husband entered into without her consent, when
such consent is required, or any act or contract of the husband which tends to defraud her or impair
her interest in the conjugal partnership property. Should the wife fail to exercise this right, she or her
heirs after the dissolution of the marriage, may demand the value of property fraudulently alienated by
the husband.(n)
This particular provision giving the wife ten (10) years x x x during [the] marriage to annul the alienation or
encumbrance was not carried over to the Family Code. It is thus clear that any alienation or encumbrance made
after August 3, 1988 when the Family Code took effect by the husband of the conjugal partnership property
without the consent of the wife is null and void.
Furthermore, it must be noted that the fraud and the intimidation referred to by petitioners were perpetrated in the
execution of the document embodying the amicable settlement. Gilda Corpuz alleged during trial that barangay
authorities made her sign said document through misrepresentation and coercion. In any event, its execution does not
alter the void character of the deed of sale between the husband and the petitioners-spouses, as will be discussed
later. The fact remains that such contract was entered into without the wifes consent.
In sum, the nullity of the contract of sale is premised on the absence of private respondents consent. To constitute a
valid contract, the Civil Code requires the concurrence of the following elements: (1) cause, (2) object, and (3)
consent, the last element being indubitably absent in the case at bar.
Insisting that the contract of sale was merely voidable, petitioners aver that it was duly ratified by the contending
parties through the amicable settlement they executed on March 16, 1990 in Barangay Case No. 38.
The position is not well taken. The trial and the appellate courts have resolved this issue in favor of the private
respondent. The trial court correctly held:
By the specific provision of the law [Art. 1390, Civil Code] therefore, the Deed of Transfer of Rights (Exh. A)
cannot be ratified, even by an amicable settlement. The participation by some barangay authorities in the
amicable settlement cannot otherwise validate an invalid act. Moreover, it cannot be denied that the amicable
settlement (Exh. B) entered into by plaintiff Gilda Corpuz and defendant spouses Guiang is a contract. It is a
direct offshoot of the Deed of Transfer of Rights (Exh. A). By express provision of law, such a contract is also
void. Thus, the legal provision, to wit:
Art. 1422. A contract which is the direct result of a previous illegal contract, is also void and
inexistent. (Civil Code of the Philippines).
In summation therefore, both the Deed of Transfer of Rights (Exh. A) and the amicable settlement (Exh. 3) are
null and void.
Doctrinally and clearly, a void contract cannot be ratified.
Neither can the amicable settlement be considered a continuing offer that was accepted and perfected by the
parties,
following
the
last
sentence
of
Article
124. The
order
of
the
pertinent
events
is
clear: after the sale, petitioners filed a complaint for trespassing against private respondent, after which the barangay
authorities secured an amicable settlement and petitioners filed before the MTC a motion for its execution. The
settlement, however, does not mention a continuing offer to sell the property or an acceptance of such a continuing
offer. Its tenor was to the effect that private respondent would vacate the property. By no stretch of the imagination, can
the Court interpret this document as the acceptance mentioned in Article 124.
WHEREFORE, the Court hereby DENIES the petition and AFFIRMS the challenged Decision and Resolution. Costs
against petitioners.
SO ORDERED.

MANALO VS CAMAISA
KAPUNAN, J.:
The issue raised in this case is whether or not the husband may validly dispose of a conjugal property without the
wifes written consent.
The present controversy had its beginning when petitioner Thelma A. Jader-Manalo allegedly came across an
advertisement placed by respondents, the Spouses Norma Fernandez C. Camaisa and Edilberto Camaisa, in the

Classified Ads Section of the newspaper BULLETIN TODAY in its April, 1992 issue, for the sale of their ten-door
apartment in Makati, as well as that in Taytay, Rizal.
As narrated by petitioner in her complaint filed with the Regional Trial Court of Makati, Metro Manila, she was
interested in buying the two properties so she negotiated for the purchase through a real estate broker,
Mr. Proceso Ereno, authorized by respondent spouses. Petitioner made a visual inspection of the said lots with the real
estate broker and was shown the tax declarations, real property tax payment receipts, location plans, and vicinity maps
relating to the properties. Thereafter, petitioner met with the vendors who turned out to be respondent
spouses. She made a definite offer to buy the properties to respondent Edilberto Camaisa with the knowledge and
conformity of his wife, respondent Norma Camaisa in the presence of the real estate broker. After some bargaining,
petitioner and Edilberto agreed upon the purchase price of P1,500,000.00 for the Taytay property and P2,100,000.00 for
the Makati property to be paid on installment basis withdownpayments of P100,000.00 and P200,000.00, respectively, on
April 15, 1992. The balance thereof was to be paid as follows:
Taytay Property
Makati Property
6th month
P200,000.00
P300,000.00
12th month
700,000.00
1,600,000.00
18th month
500,000.00
This agreement was handwritten by petitioner and signed by Edilberto. When petitioner pointed out the conjugal
nature of the properties, Edilberto assured her of his wifes conformity and consent to the sale. The formal typewritten
Contracts to Sell were thereafter prepared by petitioner. The following day, petitioner, the real estate broker
and Edilberto met in the latters office for the formal signing of the typewritten Contracts to Sell. After Edilberto signed the
contracts, petitioner delivered to him two checks, namely, UCPB Check No. 62807 dated April 15, 1992 for P200,000.00
and UCPB Check No. 62808 also dated April 15, 1992 for P100,000.00 in the presence of the real estate broker and an
employee in Edilbertos office. The contracts were given to Edilberto for the formal affixing of his wifes signature.
The following day, petitioner received a call from respondent Norma, requesting a meeting to clarify some provisions
of the contracts. To accommodate her queries, petitioner, accompanied by her lawyer, met with Edilberto and Norma and
the real estate broker at Cafe Rizal inMakati. During the meeting, handwritten notations were made on the contracts to
sell, so they arranged to incorporate the notations and to meet again for the formal signing of the contracts.
When petitioner met again with respondent spouses and the real estate broker at Edilbertos office for the formal
affixing of Normas signature, she was surprised when respondent spouses informed her that they were backing out of the
agreement because they needed spot cash for the full amount of the consideration. Petitioner reminded respondent
spouses that the contracts to sell had already been duly perfected and Normas refusal to sign the same would unduly
prejudice petitioner. Still, Norma refused to sign the contracts prompting petitioner to file a complaint for specific
performance and damages against respondent spouses before the Regional Trial Court of Makati, Branch 136 onApril 29,
1992, to compel respondent Norma Camaisa to sign the contracts to sell.
A Motion to Dismiss was filed by respondents which was denied by the trial court in its Resolution of July 21, 1992.
Respondents then filed their Answer with Compulsory Counter-claim, alleging that it was an agreement between
herein petitioner and respondent Edilberto Camaisa that the sale of the subject properties was still subject to the approval
and conformity of his wife Norma Camaisa. Thereafter, when Norma refused to give her consent to the sale, her refusal
was duly communicated by Edilberto to petitioner. The checks issued by petitioner were returned to her by Edilberto and
she accepted the same without any objection. Respondent further claimed that the acceptance of the checks returned to
petitioner signified her assent to the cancellation of the sale of the subject properties. Respondent Norma denied that she
ever participated in the negotiations for the sale of the subject properties and that she gave her consent and conformity to
the same.
On October 20, 1992, respondent Norma F. Camaisa filed a Motion for Summary Judgment asserting that there is no
genuine issue as to any material fact on the basis of the pleadings and admission of the parties considering that the wifes
written consent was not obtained in the contract to sell, the subject conjugal properties belonging to respondents; hence,
the contract was null and void.
On April 14, 1993, the trial court rendered a summary judgment dismissing the complaint on the ground that under
Art. 124 of the Family Code, the court cannot intervene to authorize the transaction in the absence of the consent of the
wife since said wife who refused to give consent had not been shown to be incapacitated. The dispositive portion of the
trial courts decision reads:
WHEREFORE, considering these premises, judgment is hereby rendered:
1. Dismissing the complaint and ordering the cancellation of the Notice of Lis Pendens by reason of its filing on TCT Nos.
(464860) S-8724 and (464861) S-8725 of the Registry of Deeds at Makati and on TCT Nos. 295976 and 295971 of the
Registry of Rizal.

2. Ordering plaintiff Thelma A. Jader to pay defendant spouses Norma and Edilberto Camaisa, FIFTY THOUSAND
(P50,000.00) as Moral Damages and FIFTY THOUSAND (P50,000.00) as Attorneys Fees.
Costs against plaintiff.
Petitioner, thus, elevated the case to the Court of Appeals. On November 29, 2000, the Court of Appeals affirmed the
dismissal by the trial court but deleted the award of P50,000.00 as damages and P50,000.00 as attorneys fees.
The Court of Appeals explained that the properties subject of the contracts were conjugal properties and as such, the
consent of both spouses is necessary to give effect to the sale. Since private respondent Norma Camaisa refused to sign
the contracts, the sale was never perfected. In fact, the downpayment was returned by respondent spouses and was
accepted by petitioner. The Court of Appeals also stressed that the authority of the court to allow sale or encumbrance of
a conjugal property without the consent of the other spouse is applicable only in cases where the said spouse is
incapacitated or otherwise unable to participate in the administration of the conjugal property.
Hence, the present recourse assigning the following errors:
THE HONORABLE COURT OF APPEALS GRIEVIOUSLY ERRED IN RENDERING SUMMARY JUDGMENT IN
DISMISSING THE COMPLAINT ENTIRELY AND ORDERING THE CANCELLATION OF NOTICE OF LIS PENDENS
ON THE TITLES OF THE SUBJECT REAL PROPERTIES;
THE HONORABLE COURT OF APPEALS GRIEVIOUSLY ERRED IN FAILING TO CONSIDER THAT THE SALE OF
REAL PROPERTIES BY RESPONDENTS TO PETITIONER HAVE ALREADY BEEN PERFECTED, FOR AFTER
THE LATTER PAID P300,000.00 DOWNPAYMENT, RESPONDENT MRS. CAMAISA NEVER OBJECTED TO
STIPULATIONS WITH RESPECT TO PRICE, OBJECT AND TERMS OF PAYMENT IN THE CONTRACT TO SELL
ALREADY SIGNED BY THE PETITIONER, RESPONDENT MR. CAMAISA AND WITNESSES MARKED AS
ANNEX G IN THE COMPLAINT EXCEPT, FOR MINOR PROVISIONS ALREADY IMPLIED BY LAW, LIKE
EJECTMENT OF TENANTS, SUBDIVISION OF TITLE AND RESCISSION IN CASE OF NONPAYMENT, WHICH
PETITIONER READILY AGREED AND ACCEDED TO THEIR INCLUSION;
THE HONORABLE COURT OF APPEALS GRIEVIOUSLY ERRED WHEN IT FAILED TO CONSIDER THAT
CONTRACT OF SALE IS CONSENSUAL AND IT IS PERFECTED BY THE MERE CONSENT OF THE PARTIES
AND THE APPLICABLE PROVISIONS ARE ARTICLES 1157, 1356, 1357, 1358, 1403, 1405 AND 1475 OF THE
CIVIL CODE OF THE PHILIPPINES AND GOVERNED BY THE STATUTE OF FRAUD.
The Court does not find error in the decisions of both the trial court and the Court of Appeals.
Petitioner alleges that the trial court erred when it entered a summary judgment in favor of respondent spouses there
being a genuine issue of fact. Petitioner maintains that the issue of whether the contracts to sell between petitioner and
respondent spouses was perfected is a question of fact necessitating a trial on the merits.
The Court does not agree. A summary judgment is one granted by the court upon motion by a party for an
expeditious settlement of a case, there appearing from the pleadings, depositions, admissions and affidavits that there are
no important questions or issues of fact involved, and that therefore the moving party is entitled to judgment as a matter of
law. A perusal of the pleadings submitted by both parties show that there is no genuine controversy as to the facts
involved therein.
Both parties admit that there were negotiations for the sale of four parcels of land between petitioner and respondent
spouses; that petitioner and respondent Edilberto Camaisa came to an agreement as to the price and the terms of
payment, and a downpayment was paid by petitioner to the latter; and that respondent Norma refused to sign the
contracts to sell. The issue thus posed for resolution in the trial court was whether or not the contracts to sell between
petitioner and respondent spouses were already perfected such that the latter could no longer back out of the agreement.
The law requires that the disposition of a conjugal property by the husband as administrator in appropriate cases
requires the written consent of the wife, otherwise, the disposition is void. Thus, Article 124 of the Family Code provides:
Art. 124. The administration and enjoyment of the conjugal partnership property shall belong to both spouses jointly. In
case of disagreement, the husbands decision shall prevail, subject to recourse to the court by the wife for a proper
remedy, which must be availed of within five years from the date of the contract implementing such decision.
In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the conjugal
properties, the other spouse may assume sole powers of administration. These powers do not include the powers of
disposition or encumbrance which must have the authority of the court or the written consent of the other spouse. In the
absence of such authority or consent the disposition or encumbrance shall be void. However, the transaction shall be
construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as a
binding contract upon the acceptance by the other spouse or authorization by the court before the offer is withdrawn by
either or both offerors. (Underscoring ours.)
The properties subject of the contracts in this case were conjugal; hence, for the contracts to sell to be effective, the
consent of both husband and wife must concur.

Respondent Norma Camaisa admittedly did not give her written consent to the sale. Even granting that respondent
Norma actively participated in negotiating for the sale of the subject properties, which she denied, her written consent to
the sale is required by law for its validity. Significantly, petitioner herself admits that Norma refused to sign the contracts to
sell. Respondent Norma may have been aware of the negotiations for the sale of their conjugal properties. However,
being merely aware of a transaction is not consent.
Finally, petitioner argues that since respondent Norma unjustly refuses to affix her signatures to the contracts to sell,
court authorization under Article 124 of the Family Code is warranted.
The argument is bereft of merit. Petitioner is correct insofar as she alleges that if the written consent of the other
spouse cannot be obtained or is being withheld, the matter may be brought to court which will give such authority if the
same is warranted by the circumstances. However, it should be stressed that court authorization under Art. 124 is only
resorted to in cases where the spouse who does not give consent is incapacitated. In this case, petitioner failed to allege
and prove that respondent Norma was incapacitated to give her consent to the contracts. In the absence of such showing
of the wifes incapacity, court authorization cannot be sought.
Under the foregoing facts, the motion for summary judgment was proper considering that there was no genuine issue
as to any material fact. The only issue to be resolved by the trial court was whether the contract to sell involving conjugal
properties was valid without the written consent of the wife.
WHEREFORE, the petition is hereby DENIED and the decision of the Court of Appeals dated November 29, 2000 in
CA-G.R. CV No. 43421 AFFIRMED.
SO ORDERED.

HOMEOWNERS SAVINGS BANK VS DAILO


TINGA, J.:
This is a petition for review on certiorari under Rule 45 of the Revised Rules of Court, assailing the Decision of the
Court of Appeals in CA-G.R. CV No. 59986 rendered on June 3, 2002, which affirmed with modification the October 18,
1997 Decision of the Regional Trial Court, Branch 29, San Pablo City, Laguna in Civil Case No. SP-4748 (97).
The following factual antecedents are undisputed.
Respondent Miguela C. Dailo and Marcelino Dailo, Jr. were married on August 8, 1967. During their marriage, the
spouses purchased a house and lot situated at Barangay San Francisco, San Pablo City from a certain Sandra Dalida.
The subject property was declared for tax assessment purposes under Assessment of Real Property No. 94-051-2802.
The Deed of Absolute Sale, however, was executed only in favor of the late Marcelino Dailo, Jr. as vendee thereof to the
exclusion of his wife.
On December 1, 1993, Marcelino Dailo, Jr. executed a Special Power of Attorney (SPA) in favor of one Lilibeth
Gesmundo, authorizing the latter to obtain a loan from petitioner Homeowners Savings and Loan Bank to be secured by
the spouses Dailos house and lot in San Pablo City. Pursuant to the SPA, Gesmundo obtained a loan in the amount
of P300,000.00 from petitioner. As security therefor, Gesmundo executed on the same day a Real Estate Mortgage
constituted on the subject property in favor of petitioner. The abovementioned transactions, including the execution of the
SPA in favor of Gesmundo, took place without the knowledge and consent of respondent.
Upon maturity, the loan remained outstanding. As a result, petitioner instituted extrajudicial foreclosure proceedings
on the mortgaged property. After the extrajudicial sale thereof, a Certificate of Sale was issued in favor of petitioner as the
highest bidder. After the lapse of one year without the property being redeemed, petitioner, through its vice-president,
consolidated the ownership thereof by executing on June 6, 1996 an Affidavit of Consolidation of Ownership and a Deed
of Absolute Sale.
In the meantime, Marcelino Dailo, Jr. died on December 20, 1995. In one of her visits to the subject property,
respondent learned that petitioner had already employed a certain Roldan Brion to clean its premises and that her car, a
Ford sedan, was razed because Brion allowed a boy to play with fire within the premises.
Claiming that she had no knowledge of the mortgage constituted on the subject property, which was conjugal in
nature, respondent instituted with the Regional Trial Court, Branch 29, San Pablo City, Civil Case No. SP-2222 (97)
for Nullity of Real Estate Mortgage and Certificate of Sale, Affidavit of Consolidation of Ownership, Deed of Sale,
Reconveyance with Prayer for Preliminary Injunction and Damages against petitioner. In the latters Answer with
Counterclaim, petitioner prayed for the dismissal of the complaint on the ground that the property in question was the
exclusive property of the late Marcelino Dailo, Jr.

After trial on the merits, the trial court rendered a Decision on October 18, 1997. The dispositive portion thereof reads
as follows:
WHEREFORE, the plaintiff having proved by the preponderance of evidence the allegations of the Complaint, the Court
finds for the plaintiff and hereby orders:
ON THE FIRST CAUSE OF ACTION:
1. The declaration of the following documents as null and void:
(a) The Deed of Real Estate Mortgage dated December 1, 1993 executed before Notary Public Romulo
Urrea and his notarial register entered as Doc. No. 212; Page No. 44, Book No. XXI, Series of 1993.
(b) The Certificate of Sale executed by Notary Public Reynaldo Alcantara on April 20, 1995.
(c) The Affidavit of Consolidation of Ownership executed by the defendant
(c) The Affidavit of Consolidation of Ownership executed by the defendant over the residential lot located
at Brgy. San Francisco, San Pablo City, covered by ARP No. 95-091-1236 entered as Doc. No. 406;
Page No. 83, Book No. III, Series of 1996 of Notary Public Octavio M. Zayas.
(d) The assessment of real property No. 95-051-1236.
2. The defendant is ordered to reconvey the property subject of this complaint to the plaintiff.
ON THE SECOND CAUSE OF ACTION
1. The defendant to pay the plaintiff the sum of P40,000.00 representing the value of the car which was burned.
ON BOTH CAUSES OF ACTION
1. The defendant to pay the plaintiff the sum of P25,000.00 as attorneys fees;
2. The defendant to pay plaintiff P25,000.00 as moral damages;
3. The defendant to pay the plaintiff the sum of P10,000.00 as exemplary damages;
4. To pay the cost of the suit.
The counterclaim is dismissed.
SO ORDERED.
Upon elevation of the case to the Court of Appeals, the appellate court affirmed the trial courts finding that the
subject property was conjugal in nature, in the absence of clear and convincing evidence to rebut the presumption that the
subject property acquired during the marriage of spouses Dailo belongs to their conjugal partnership. The appellate court
declared as void the mortgage on the subject property because it was constituted without the knowledge and consent of
respondent, in accordance with Article 124 of the Family Code. Thus, it upheld the trial courts order to reconvey the
subject property to respondent. With respect to the damage to respondents car, the appellate court found petitioner to be
liable therefor because it is responsible for the consequences of the acts or omissions of the person it hired to accomplish
the assigned task.All told, the appellate court affirmed the trial courts Decision, but deleted the award for damages and
attorneys fees for lack of basis.
Hence, this petition, raising the following issues for this Courts consideration:
1. WHETHER OR NOT THE MORTGAGE CONSTITUTED BY THE LATE MARCELINO DAILO, JR. ON THE SUBJECT
PROPERTY AS CO-OWNER THEREOF IS VALID AS TO HIS UNDIVIDED SHARE.
2. WHETHER OR NOT THE CONJUGAL PARTNERSHIP IS LIABLE FOR THE PAYMENT OF THE LOAN OBTAINED BY
THE LATE MARCELINO DAILO, JR. THE SAME HAVING REDOUNDED TO THE BENEFIT OF THE FAMILY.
First, petitioner takes issue with the legal provision applicable to the factual milieu of this case. It contends that Article
124 of the Family Code should be construed in relation to Article 493 of the Civil Code, which states:
ART. 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he
may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal
rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the
portion which may be allotted to him in the division upon the termination of the co-ownership.
Article 124 of the Family Code provides in part:
ART. 124. The administration and enjoyment of the conjugal partnership property shall belong to both spouses jointly. . . .
In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the conjugal
properties, the other spouse may assume sole powers of administration. These powers do not include the powers of
disposition or encumbrance which must have the authority of the court or the written consent of the other spouse. In the
absence of such authority or consent, the disposition or encumbrance shall be void. . . .
Petitioner argues that although Article 124 of the Family Code requires the consent of the other spouse to the
mortgage of conjugal properties, the framers of the law could not have intended to curtail the right of a spouse from

exercising full ownership over the portion of the conjugal property pertaining to him under the concept of coownership. Thus, petitioner would have this Court uphold the validity of the mortgage to the extent of the late Marcelino
Dailo, Jr.s share in the conjugal partnership.
In Guiang v. Court of Appeals, it was held that the sale of a conjugal property requires the consent of both the
husband and wife. In applying Article 124 of the Family Code, this Court declared that the absence of the consent of one
renders the entire sale null and void, including the portion of the conjugal property pertaining to the husband who
contracted the sale. The same principle in Guiang squarely applies to the instant case. As shall be discussed next, there is
no legal basis to construe Article 493 of the Civil Code as an exception to Article 124 of the Family Code.
Respondent and the late Marcelino Dailo, Jr. were married on August 8, 1967. In the absence of a marriage
settlement, the system of relative community or conjugal partnership of gains governed the property relations between
respondent and her late husband. With the effectivity of the Family Code on August 3, 1988, Chapter 4 on Conjugal
Partnership of Gains in the Family Code was made applicable to conjugal partnership of gains already established before
its effectivity unless vested rights have already been acquired under the Civil Code or other laws.
The rules on co-ownership do not even apply to the property relations of respondent and the late Marcelino Dailo, Jr.
even in a suppletory manner. The regime of conjugal partnership of gains is a special type of partnership, where the
husband and wife place in a common fund the proceeds, products, fruits and income from their separate properties and
those acquired by either or both spouses through their efforts or by chance. Unlike the absolute community of property
wherein the rules on co-ownership apply in a suppletory manner, the conjugal partnership shall be governed by the rules
on contract of partnership in all that is not in conflict with what is expressly determined in the chapter (on conjugal
partnership of gains) or by the spouses in their marriage settlements. Thus, the property relations of respondent and her
late husband shall be governed, foremost, by Chapter 4 on Conjugal Partnership of Gains of the Family Code and,
suppletorily, by the rules on partnership under the Civil Code. In case of conflict, the former prevails because the Civil
Code provisions on partnership apply only when the Family Code is silent on the matter.
The basic and established fact is that during his lifetime, without the knowledge and consent of his wife, Marcelino
Dailo, Jr. constituted a real estate mortgage on the subject property, which formed part of their conjugal partnership. By
express provision of Article 124 of the Family Code, in the absence of (court) authority or written consent of the other
spouse, any disposition or encumbrance of the conjugal property shall be void.
The aforequoted provision does not qualify with respect to the share of the spouse who makes the disposition or
encumbrance in the same manner that the rule on co-ownership under Article 493 of the Civil Code does. Where the law
does not distinguish, courts should not distinguish. Thus, both the trial court and the appellate court are correct in
declaring the nullity of the real estate mortgage on the subject property for lack of respondents consent.
Second, petitioner imposes the liability for the payment of the principal obligation obtained by the late Marcelino
Dailo, Jr. on the conjugal partnership to the extent that it redounded to the benefit of the family.
Under Article 121 of the Family Code, [T]he conjugal partnership shall be liable for: . . . (3) Debts and obligations
contracted by either spouse without the consent of the other to the extent that the family may have been benefited; . . . .
For the subject property to be held liable, the obligation contracted by the late Marcelino Dailo, Jr. must have redounded
to the benefit of the conjugal partnership. There must be the requisite showing then of some advantage which clearly
accrued to the welfare of the spouses. Certainly, to make a conjugal partnership respond for a liability that should
appertain to the husband alone is to defeat and frustrate the avowed objective of the new Civil Code to show the utmost
concern for the solidarity and well-being of the family as a unit.
The burden of proof that the debt was contracted for the benefit of the conjugal partnership of gains lies with the
creditor-party litigant claiming as such. Ei incumbit probatio qui dicit, non qui negat (he who asserts, not he who denies,
must prove). Petitioners sweeping conclusion that the loan obtained by the late Marcelino Dailo, Jr. to finance the
construction of housing units without a doubt redounded to the benefit of his family, without adducing adequate proof,
does not persuade this Court. Other than petitioners bare allegation, there is nothing from the records of the case to
compel a finding that, indeed, the loan obtained by the late Marcelino Dailo, Jr. redounded to the benefit of the family.
Consequently, the conjugal partnership cannot be held liable for the payment of the principal obligation.
In addition, a perusal of the records of the case reveals that during the trial, petitioner vigorously asserted that the
subject property was the exclusive property of the late Marcelino Dailo, Jr. Nowhere in the answer filed with the trial court
was it alleged that the proceeds of the loan redounded to the benefit of the family. Even on appeal, petitioner never
claimed that the family benefited from the proceeds of the loan. When a party adopts a certain theory in the court below,
he will not be permitted to change his theory on appeal, for to permit him to do so would not only be unfair to the other
party but it would also be offensive to the basic rules of fair play, justice and due process. A party may change his legal
theory on appeal only when the factual bases thereof would not require presentation of any further evidence by the
adverse party in order to enable it to properly meet the issue raised in the new theory.
WHEREFORE, the petition is DENIED. Costs against petitioner.

SO ORDERED.

RAVINA VS VILLA ABRILLE


QUISUMBING, Acting C.J.:
For review are the Decision dated February 21, 2002 and the Resolution dated October 7, 2003 of the Court of Appeals in
CA-G.R. CV No. 54560. The appellate court modified the Decision dated September 26, 1995 of the Regional Trial Court
(RTC) of Davao City, Branch 15.
Simply stated, the facts as found by the Court of Appeals are as follows:
Respondent Mary Ann Pasaol Villa Abrille and Pedro Villa Abrille are husband and wife. They have four children, who are
also parties to the instant case and are represented by their mother, Mary Ann.
In 1982, the spouses acquired a 555-square meter parcel of land denominated as Lot 7, located at Kamuning Street, Juna
Subdivision, Matina, Davao City, and covered by Transfer Certificate of Title (TCT) No. T-88674 in their names. Said lot is
adjacent to a parcel of land which Pedro acquired when he was still single and which is registered solely in his name
under TCT No. T-26471.
Through their joint efforts and the proceeds of a loan from the Development Bank of the Philippines (DBP), the spouses
built a house on Lot 7 and Pedros lot. The house was finished in the early 1980s but the spouses continuously made
improvements, including a poultry house and an annex.
In 1991, Pedro got a mistress and began to neglect his family. Mary Ann was forced to sell or mortgage their movables to
support the family and the studies of her children. By himself, Pedro offered to sell the house and the two lots to herein
petitioners, Patrocinia and Wilfredo Ravina. Mary Ann objected and notified the petitioners of her objections, but Pedro
nonetheless sold the house and the two lots without Mary Anns consent, as evidenced by a Deed of Sale dated June 21,
1991. It appears on the said deed that Mary Ann did not sign on top of her name.
On July 5, 1991 while Mary Ann was outside the house and the four children were in school, Pedro together with armed
members of the Civilian Armed Forces Geographical Unit (CAFGU) and acting in connivance with petitioners began
transferring all their belongings from the house to an apartment.
When Mary Ann and her daughter Ingrid Villa Abrille came home, they were stopped from entering it. They waited outside
the gate until evening under the rain. They sought help from the Talomo Police Station, but police authorities refused to
intervene, saying that it was a family matter. Mary Ann alleged that the incident caused stress, tension and anxiety to her
children, so much so that one flunked at school. Thus, respondents Mary Ann and her children filed a complaint for
Annulment of Sale, Specific Performance, Damages and Attorneys Fees with Preliminary Mandatory Injunction against
Pedro and herein petitioners (the Ravinas) in the RTC of Davao City.
During the trial, Pedro declared that the house was built with his own money. Petitioner Patrocinia Ravina testified that
they bought the house and lot from Pedro, and that her husband, petitioner Wilfredo Ravina, examined the titles when
they bought the property.
On September 26, 1995, the trial court ruled in favor of herein respondent Mary Ann P. Villa Abrille as follows:
WHEREFORE, judgment is rendered as follows:
1. The sale of lot 8 covered by TCT No. 26471 by defendant Pedro Abrille appearing in the Deed of Sale marked
as Exh. "E" is void as to one half or 277.5 square meters representing the share of plaintiff Mary Villa Abrille.
2. That sale of Lot 7 covered by TCT No. [88674] by defendant Pedro Villa Abrille in the Deed of Sale (Exh. "A") is
valid as to one half or 277.5 square meters of the 555 square meters as one half belongs to defendant Pedro
Abrille but it is void as to the other half or 277.5 square meters as it belongs to plaintiff Mary Abrille who did not
sell her share nor give her consent to the sale.
3. That sale of the house mentioned in the Deed of Sale (Exh. "A") is valid as far as the one half of the house
representing the share of defendant Pedro Abrille is concerned but void as to the other half which is the share of
plaintiff Mary Abrille because she did not give her consent/sign the said sale.
4. The defendants shall jointly pay the plaintiffs.
4. A. Seventeen Thousand Pesos (P17,000.00) representing the value of the movables and belonging[s]
that were lost when unknown men unceremoniously and without their knowledge and consent removed
their movables from their house and brought them to an apartment.
4. B. One Hundred Thousand Pesos (P 100,000.00) to plaintiff Mary Abrille as moral damages.
4. C. Fifty Thousand Pesos (P50,000.00) to each of the four children as moral damages, namely:

a) Ingrid Villa Abrille Fifty Thousand Pesos (P50,000.00), b) Ingremark Villa Abrille Fifty Thousand
Pesos (P50,000.00), c) Ingresoll Villa Abrille Fifty Thousand Pesos (P50,000.00) and d) Ingrelyn Villa
Abrille Fifty Thousand Pesos (P50,000.00).
5. Ten Thousand Pesos (P10,000.00) as exemplary damages by way of example and correction for the public
good.
6. The costs of suit.
On appeal, the Court of Appeals modified the decision, thus:
WHEREFORE, the appealed judgment is hereby MODIFIED as follows:
1. The sale of lot covered by TCT No. 26471 in favor of defendants spouses Wilfredo and Patrocinia Ravina is
declared valid.
2. The sale of lot covered by TCT No. 88674 in favor of said defendants spouses Ravina, together with the house
thereon, is declared null and void.
3. Defendant Pedro Abrille is ordered to return the value of the consideration for the lot covered by TCT No.
88674 and the house thereon to co-defendants spouses Ravina.
4. Defendants spouses Ravina [a]re ordered to reconvey the lot and house covered by TCT No. 88674 in favor of
spouses Pedro and Mary Villa Abrille and to deliver possession to them.
5. Plaintiffs are given the option to exercise their rights under Article [450] of the New Civil Code with respect to
the improvements introduced by defendant spouses Ravina.
6. Defendants Pedro Villa Abrille and spouses Ravina are ordered to pay jointly and severally the plaintiffs as
follows:
a) One Hundred Thousand Pesos (P100,000.00) to plaintiff Mary Villa Abrille as moral damages.
b) Fifty Thousand Pesos (P50,000.00) as moral damages to each of the four children, namely: Ingrid Villa
Abrille, Ingremark Villa Abrille, Ingresoll Villa Abrille and Ingrelyn Villa Abrille.
c) Ten Thousand (P10,000.00) as exemplary damages by way of example and correction for the public
good.
SO ORDERED.
Their Motion for Reconsideration having been denied, petitioners filed this petition. Petitioners argue that:
I.
THE COURT OF APPEALS ERRED WHEN IT DECLARED x x x THE SALE OF LOT COVERED BY TCT NO. 88674 IN
FAVOR OF SPOUSES RAVINA, TOGETHER WITH THE HOUSE THEREON, AS NULL AND VOID SINCE IT IS
CLEARLY CONTRARY TO LAW AND EVIDENCE.
II.
THE COURT OF APPEALS ERRED WHEN IT RULED THAT PETITIONERS PATROCIN[I]A RAVINA AND WILFREDO
RAVINA ARE NOT INNOCENT PURCHASERS FOR VALUE, THE SAME BEING CONTRARY TO LAW AND EVIDENCE.
III.
THE COURT OF APPEALS ERRED WHEN IT RULED THAT PETITIONERS PATROCIN[I]A RAVINA AND WILFREDO
RAVINA ARE LIABLE FOR DAMAGES, THE SAME BEING CONTRARY TO LAW AND EVIDENCE.
In essence, petitioners assail the appellate courts declaration that the sale to them by Pedro of the lot covered by TCT
No. T-88674 is null and void. However, in addressing this issue, it is imperative to determine: (1) whether the subject
property covered by TCT No. T-88674 is an exclusive property of Pedro or conjugal property, and (2) whether its sale by
Pedro was valid considering the absence of Mary Anns consent.
Petitioners assert that the subject lot covered by TCT No. T-88674 was the exclusive property of Pedro having been
acquired by him through barter or exchange. They allege that the subject lot was acquired by Pedro with the proceeds of
the sale of one of his exclusive properties. Allegedly, Pedro and his sister Carmelita initially agreed to exchange their
exclusive lots covered by TCT No. T-26479 and TCT No. T-26472, respectively. Later, however, Pedro sold the lot covered
by TCT No. T-26472 to one Francisca Teh Ting and purchased the property of Carmelita using the proceeds of the sale. A
new title, TCT No. T-88674, was issued thereafter. Thus, petitioners insist that the subject lot remains to be an exclusive
property of Pedro as it was acquired or purchased through the exclusive funds or money of the latter.
We are not persuaded. Article 160 of the New Civil Code provides, "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."
There is no issue with regard to the lot covered by TCT No. T-26471, which was an exclusive property of Pedro, having
been acquired by him before his marriage to Mary Ann. However, the lot covered by TCT No. T-88674 was acquired in
1982 during the marriage of Pedro and Mary Ann. No evidence was adduced to show that the subject property was

acquired through exchange or barter. The presumption of the conjugal nature of the property subsists in the absence of
clear, satisfactory and convincing evidence to overcome said presumption or to prove that the subject property is
exclusively owned by Pedro. Petitioners bare assertion would not suffice to overcome the presumption that TCT No. T88674, acquired during the marriage of Pedro and Mary Ann, is conjugal. Likewise, the house built thereon is conjugal
property, having been constructed through the joint efforts of the spouses, who had even obtained a loan from DBP to
construct the house.1avvphi1
Significantly, a sale or encumbrance of conjugal property concluded after the effectivity of the Family Code on August 3,
1988, is governed by Article 124 of the same Code that now treats such a disposition to be void if done (a) without the
consent of both the husband and the wife, or (b) in case of one spouses inability, the authority of the court. Article 124 of
the Family Code, the governing law at the time the assailed sale was contracted, is explicit:
ART. 124. The administration and enjoyment of the conjugal partnership property shall belong to both spouses jointly. In
case of disagreement, the husbands decision shall prevail, subject to recourse to the court by the wife for proper remedy
which must be availed of within five years from the date of the contract implementing such decision.
In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the conjugal
properties, the other spouse may assume sole powers of administration. These powers do not include the powers of
disposition or encumbrance which must have the authority of the court or the written consent of the other spouse. In the
absence of such authority or consent, the disposition or encumbrance shall be void. However, the transaction shall be
construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as a
binding contract upon the acceptance by the other spouse or authorization by the court before the offer is withdrawn by
either or both offerors. (Emphasis supplied.)
The particular provision in the New Civil Code giving the wife ten (10) years to annul the alienation or encumbrance was
not carried over to the Family Code. It is thus clear that alienation or encumbrance of the conjugal partnership property by
the husband without the consent of the wife is null and void.
Hence, just like the rule in absolute community of property, if the husband, without knowledge and consent of the wife,
sells conjugal property, such sale is void. If the sale was with the knowledge but without the approval of the wife, thereby
resulting in a disagreement, such sale is annullable at the instance of the wife who is given five (5) years from the date the
contract implementing the decision of the husband to institute the case.
Here, respondent Mary Ann timely filed the action for annulment of sale within five (5) years from the date of sale and
execution of the deed. However, her action to annul the sale pertains only to the conjugal house and lot and does not
include the lot covered by TCT No. T-26471, a property exclusively belonging to Pedro and which he can dispose of freely
without Mary Anns consent.
On the second assignment of error, petitioners contend that they are buyers in good faith. Accordingly, they need not
inquire whether the lot was purchased by money exclusively belonging to Pedro or of the common fund of the spouses
and may rely on the certificates of title.
The contention is bereft of merit. As correctly held by the Court of Appeals, a purchaser in good faith is one who buys the
property of another without notice that some other person has a right to, or interest in, such property and pays a full and
fair price for the same at the time of such purchase, or before he has notice of the claim or interest of some other person
in the property. To establish his status as a buyer for value in good faith, a person dealing with land registered in the name
of and occupied by the seller need only show that he relied on the face of the sellers certificate of title. But for a person
dealing with land registered in the name of and occupied by the seller whose capacity to sell is restricted, such as by
Articles 166 and 173 of the Civil Code or Article 124 of the Family Code, he must show that he inquired into the latters
capacity to sell in order to establish himself as a buyer for value in good faith.1avvphi1
In the present case, the property is registered in the name of Pedro and his wife, Mary Ann. Petitioners cannot deny
knowledge that during the time of the sale in 1991, Pedro was married to Mary Ann. However, Mary Anns conformity did
not appear in the deed. Even assuming that petitioners believed in good faith that the subject property is the exclusive
property of Pedro, they were apprised by Mary Anns lawyer of her objection to the sale and yet they still proceeded to
purchase the property without Mary Anns written consent. Moreover, the respondents were the ones in actual, visible and
public possession of the property at the time the transaction was being made. Thus, at the time of sale, petitioners knew
that Mary Ann has a right to or interest in the subject properties and yet they failed to obtain her conformity to the deed of
sale. Hence, petitioners cannot now invoke the protection accorded to purchasers in good faith.
Now, if a voidable contract is annulled, the restoration of what has been given is proper. The relationship between the
parties in any contract even if subsequently annulled must always be characterized and punctuated by good faith and fair
dealing. Hence, in consonance with justice and equity and the salutary principle of non-enrichment at anothers expense,
we sustain the appellate courts order directing Pedro to return to petitioner spouses the value of the consideration for the
lot covered by TCT No. T-88674 and the house thereon.

However, this court rules that petitioners cannot claim reimbursements for improvements they introduced after their good
faith had ceased. As correctly found by the Court of Appeals, petitioner Patrocinia Ravina made improvements and
renovations on the house and lot at the time when the complaint against them was filed. Ravina continued introducing
improvements during the pendency of the action.
Thus, Article 449 of the New Civil Code is applicable. It provides that, "(h)e who builds, plants or sows in bad faith on the
land of another, loses what is built, planted or sown without right to indemnity."
On the last issue, petitioners claim that the decision awarding damages to respondents is not supported by the evidence
on record.
The claim is erroneous to say the least. The manner by which respondent and her children were removed from the family
home deserves our condemnation. On July 5, 1991, while respondent was out and her children were in school, Pedro Villa
Abrille acting in connivance with the petitioners surreptitiously transferred all their personal belongings to another place.
The respondents then were not allowed to enter their rightful home or family abode despite their impassioned pleas.
Firmly established in our civil law is the doctrine that: "Every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and observe honesty and good faith." When a right is
exercised in a manner that does not conform with such norms and results in damages to another, a legal wrong is thereby
committed for which the wrong doer must be held responsible. Similarly, any person who willfully 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 damages
caused. It is patent in this case that petitioners alleged acts fall short of these established civil law standards.
WHEREFORE, we deny the instant petition for lack of merit. The Decision dated February 21, 2002 and the Resolution
dated October 7, 2003 of the Court of Appeals in CA-G.R. CV No. 54560 are AFFIRMED.
Costs against petitioners.
SO ORDERED.

FUENTES VS ROCA
ABAD, J.:
This case is about a husbands sale of conjugal real property, employing a challenged affidavit of consent from an
estranged wife. The buyers claim valid consent, loss of right to declare nullity of sale, and prescription.
The Facts and the Case
Sabina Tarroza owned a titled 358-square meter lot in Canelar, Zamboanga City. On October 11, 1982 she sold it to her
son, Tarciano T. Roca (Tarciano) under a deed of absolute sale. But Tarciano did not for the meantime have the registered
title transferred to his name.
Six years later in 1988, Tarciano offered to sell the lot to petitioners Manuel and Leticia Fuentes (the Fuentes spouses).
They arranged to meet at the office of Atty. Romulo D. Plagata whom they asked to prepare the documents of sale. They
later signed an agreement to sell that Atty. Plagata prepared dated April 29, 1988, which agreement expressly stated that
it was to take effect in six months.
The agreement required the Fuentes spouses to pay Tarciano a down payment of P60,000.00 for the transfer of the lots
title to him. And, within six months, Tarciano was to clear the lot of structures and occupants and secure the consent of his
estranged wife, Rosario Gabriel Roca (Rosario), to the sale. Upon Tarcianos compliance with these conditions, the
Fuentes spouses were to take possession of the lot and pay him an additional P140,000.00 or P160,000.00, depending
on whether or not he succeeded in demolishing the house standing on it. If Tarci ano was unable to comply with these
conditions, the Fuentes spouses would become owners of the lot without any further formality and payment.
The parties left their signed agreement with Atty. Plagata who then worked on the other requirements of the sale.
According to the lawyer, he went to see Rosario in one of his trips to Manila and had her sign an affidavit of consent. As
soon as Tarciano met the other conditions, Atty. Plagata notarized Rosarios affidavit in Zamboanga City. On January 11,
1989 Tarciano executed a deed of absolute sale in favor of the Fuentes spouses. They then paid him the
additional P140,000.00 mentioned in their agreement. A new title was issued in the name of the spouses who immediately
constructed a building on the lot. On January 28, 1990 Tarciano passed away, followed by his wife Rosario who died nine
months afterwards.
Eight years later in 1997, the children of Tarciano and Rosario, namely, respondents Conrado G. Roca, Annabelle R.
Joson, and Rose Marie R. Cristobal, together with Tarcianos sister, Pilar R. Malcampo, represented by her son, John Paul
M. Trinidad (collectively, the Rocas), filed an action for annulment of sale and reconveyance of the land against the
Fuentes spouses before the Regional Trial Court (RTC) of Zamboanga City in Civil Case 4707. The Rocas claimed that
the sale to the spouses was void since Tarcianos wife, Rosario, did not give her consent to it. Her signature on the

affidavit of consent had been forged. They thus prayed that the property be reconveyed to them upon reimbursement of
the price that the Fuentes spouses paid Tarciano.
The spouses denied the Rocas allegations. They presented Atty. Plagata who testified that he personally saw Rosario
sign the affidavit at her residence in Paco, Manila, on September 15, 1988. He admitted, however, that he notarized the
document in Zamboanga City four months later on January 11, 1989. All the same, the Fuentes spouses pointed out that
the claim of forgery was personal to Rosario and she alone could invoke it. Besides, the four-year prescriptive period for
nullifying the sale on ground of fraud had already lapsed.
Both the Rocas and the Fuentes spouses presented handwriting experts at the trial. Comparing Rosarios standard
signature on the affidavit with those on various documents she signed, the Rocas expert testified that the signatures were
not written by the same person. Making the same comparison, the spouses expert concluded that they were.
On February 1, 2005 the RTC rendered judgment, dismissing the case. It ruled that the action had already prescribed
since the ground cited by the Rocas for annulling the sale, forgery or fraud, already prescribed under Article 1391 of the
Civil Code four years after its discovery. In this case, the Rocas may be deemed to have notice of the fraud from the date
the deed of sale was registered with the Registry of Deeds and the new title was issued. Here, the Rocas filed their action
in 1997, almost nine years after the title was issued to the Fuentes spouses on January 18, 1989.
Moreover, the Rocas failed to present clear and convincing evidence of the fraud. Mere variance in the signatures of
Rosario was not conclusive proof of forgery. The RTC ruled that, although the Rocas presented a handwriting expert, the
trial court could not be bound by his opinion since the opposing expert witness contradicted the same. Atty. Plagatas
testimony remained technically unrebutted.
Finally, the RTC noted that Atty. Plagatas defective notarization of the affidavit of consent did not invalidate the sale. The
law does not require spousal consent to be on the deed of sale to be valid. Neither does the irregularity vitiate Rosarios
consent. She personally signed the affidavit in the presence of Atty. Plagata.
On appeal, the Court of Appeals (CA) reversed the RTC decision. The CA found sufficient evidence of forgery and did not
give credence to Atty. Plagatas testimony that he saw Rosario sign the document in Quezon City. Its jurat said differently.
Also, upon comparing the questioned signature with the specimen signatures, the CA noted significant variance between
them. That Tarciano and Rosario had been living separately for 30 years since 1958 also reinforced the conclusion that
her signature had been forged.
Since Tarciano and Rosario were married in 1950, the CA concluded that their property relations were governed by the
Civil Code under which an action for annulment of sale on the ground of lack of spousal consent may be brought by the
wife during the marriage within 10 years from the transaction. Consequently, the action that the Rocas, her heirs, brought
in 1997 fell within 10 years of the January 11, 1989 sale.
Considering, however, that the sale between the Fuentes spouses and Tarciano was merely voidable, the CA held that its
annulment entitled the spouses to reimbursement of what they paid him plus legal interest computed from the filing of the
complaint until actual payment. Since the Fuentes spouses were also builders in good faith, they were entitled under
Article 448 of the Civil Code to payment of the value of the improvements they introduced on the lot. The CA did not award
damages in favor of the Rocas and deleted the award of attorneys fees to the Fuentes spouses.
Unsatisfied with the CA decision, the Fuentes spouses came to this court by petition for review.
The Issues Presented
The case presents the following issues:
1. Whether or not Rosarios signature on the document of consent to her husband Tarcianos sale of their conjugal
land to the Fuentes spouses was forged;
2. Whether or not the Rocas action for the declaration of nullity of that sale to the spouses already prescribed;
and
3. Whether or not only Rosario, the wife whose consent was not had, could bring the action to annul that sale.
The Courts Rulings
First. The key issue in this case is whether or not Rosarios signature on the document of consent had been forged. For, if
the signature were genuine, the fact that she gave her consent to her husbands sale of the conjugal land would render
the other issues merely academic.
The CA found that Rosarios signature had been forged. The CA observed a marked difference between her signature on
the affidavit of consent and her specimen signatures. The CA gave no weight to Atty. Plagatas testimony that he saw
Rosario sign the document in Manila on September 15, 1988 since this clashed with his declaration in the jurat that
Rosario signed the affidavit in Zamboanga City on January 11, 1989.
The Court agrees with the CAs observation that Rosarios signature strokes on the affidavit appears heavy, deliberate,
and forced. Her specimen signatures, on the other hand, are consistently of a lighter stroke and more fluid. The way the
letters "R" and "s" were written is also remarkably different. The variance is obvious even to the untrained eye.

Significantly, Rosarios specimen signatures were made at about the time that she signed the supposed affidavit of
consent. They were, therefore, reliable standards for comparison. The Fuentes spouses presented no evidence that
Rosario suffered from any illness or disease that accounted for the variance in her signature when she signed the affidavit
of consent. Notably, Rosario had been living separately from Tarciano for 30 years since 1958. And she resided so far
away in Manila. It would have been quite tempting for Tarciano to just forge her signature and avoid the risk that she
would not give her consent to the sale or demand a stiff price for it.
What is more, Atty. Plagata admittedly falsified the jurat of the affidavit of consent. That jurat declared that Rosario swore
to the document and signed it in Zamboanga City on January 11, 1989 when, as Atty. Plagata testified, she supposedly
signed it about four months earlier at her residence in Paco, Manila on September 15, 1988. While a defective
notarization will merely strip the document of its public character and reduce it to a private instrument, that falsified jurat,
taken together with the marks of forgery in the signature, dooms such document as proof of Rosarios consent to the sale
of the land. That the Fuentes spouses honestly relied on the notarized affidavit as proof of Rosarios consent does not
matter. The sale is still void without an authentic consent.
Second. Contrary to the ruling of the Court of Appeals, the law that applies to this case is the Family Code, not the Civil
Code. Although Tarciano and Rosario got married in 1950, Tarciano sold the conjugal property to the Fuentes spouses on
January 11, 1989, a few months after the Family Code took effect on August 3, 1988.
When Tarciano married Rosario, the Civil Code put in place the system of conjugal partnership of gains on their property
relations. While its Article 165 made Tarciano the sole administrator of the conjugal partnership, Article 166 prohibited him
from selling commonly owned real property without his wifes consent. Still, if he sold the same without his wifes consent,
the sale is not void but merely voidable. Article 173 gave Rosario the right to have the sale annulled during the marriage
within ten years from the date of the sale. Failing in that, she or her heirs may demand, after dissolution of the marriage,
only the value of the property that Tarciano fraudulently sold. Thus:
Art. 173. The wife may, during the marriage, and within ten years from the transaction questioned, ask the courts for the
annulment of any contract of the husband entered into without her consent, when such consent is required, or any act or
contract of the husband which tends to defraud her or impair her interest in the conjugal partnership property. Should the
wife fail to exercise this right, she or her heirs, after the dissolution of the marriage, may demand the value of property
fraudulently alienated by the husband.
But, as already stated, the Family Code took effect on August 3, 1988. Its Chapter 4 on Conjugal Partnership of Gains
expressly superseded Title VI, Book I of the Civil Code on Property Relations Between Husband and Wife.Further, the
Family Code provisions were also made to apply to already existing conjugal partnerships without prejudice to vested
rights. Thus:
Art. 105. x x x The provisions of this Chapter shall also apply to conjugal partnerships of gains already established
between spouses before the effectivity of this Code, without prejudice to vested rights already acquired in accordance with
the Civil Code or other laws, as provided in Article 256. (n)
Consequently, when Tarciano sold the conjugal lot to the Fuentes spouses on January 11, 1989, the law that governed the
disposal of that lot was already the Family Code.
In contrast to Article 173 of the Civil Code, Article 124 of the Family Code does not provide a period within which the wife
who gave no consent may assail her husbands sale of the real property. It simply provides that without the other spouses
written consent or a court order allowing the sale, the same would be void. Article 124 thus provides:
Art. 124. x x x In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the
conjugal properties, the other spouse may assume sole powers of administration. These powers do not include the
powers of disposition or encumbrance which must have the authority of the court or the written consent of the other
spouse. In the absence of such authority or consent, the disposition or encumbrance shall be void. x x x
Under the provisions of the Civil Code governing contracts, a void or inexistent contract has no force and effect from the
very beginning. And this rule applies to contracts that are declared void by positive provision of law, as in the case of a
sale of conjugal property without the other spouses written consent. A void contract is equivalent to nothing and is
absolutely wanting in civil effects. It cannot be validated either by ratification or prescription.
But, although a void contract has no legal effects even if no action is taken to set it aside, when any of its terms have been
performed, an action to declare its inexistence is necessary to allow restitution of what has been given under it. This
action, according to Article 1410 of the Civil Code does not prescribe. Thus:
Art. 1410. The action or defense for the declaration of the inexistence of a contract does not prescribe.
Here, the Rocas filed an action against the Fuentes spouses in 1997 for annulment of sale and reconveyance of the real
property that Tarciano sold without their mothers (his wifes) written consent. The passage of time did not erode the right
to bring such an action.

Besides, even assuming that it is the Civil Code that applies to the transaction as the CA held, Article 173 provides that
the wife may bring an action for annulment of sale on the ground of lack of spousal consent during the marriage within 10
years from the transaction. Consequently, the action that the Rocas, her heirs, brought in 1997 fell within 10 years of the
January 11, 1989 sale. It did not yet prescribe.
The Fuentes spouses of course argue that the RTC nullified the sale to them based on fraud and that, therefore, the
applicable prescriptive period should be that which applies to fraudulent transactions, namely, four years from its
discovery. Since notice of the sale may be deemed given to the Rocas when it was registered with the Registry of Deeds
in 1989, their right of action already prescribed in 1993.
But, if there had been a victim of fraud in this case, it would be the Fuentes spouses in that they appeared to have agreed
to buy the property upon an honest belief that Rosarios written consent to the sale was genuine. They had four years then
from the time they learned that her signature had been forged within which to file an action to annul the sale and get back
their money plus damages. They never exercised the right.
If, on the other hand, Rosario had agreed to sign the document of consent upon a false representation that the property
would go to their children, not to strangers, and it turned out that this was not the case, then she would have four years
from the time she discovered the fraud within which to file an action to declare the sale void. But that is not the case here.
Rosario was not a victim of fraud or misrepresentation. Her consent was simply not obtained at all. She lost nothing since
the sale without her written consent was void. Ultimately, the Rocas ground for annulment is not forgery but the lack of
written consent of their mother to the sale. The forgery is merely evidence of lack of consent.
Third. The Fuentes spouses point out that it was to Rosario, whose consent was not obtained, that the law gave the right
to bring an action to declare void her husbands sale of conjugal land. But here, Rosario died in 1990, the year after the
sale. Does this mean that the right to have the sale declared void is forever lost?
The answer is no. As stated above, that sale was void from the beginning. Consequently, the land remained the property
of Tarciano and Rosario despite that sale. When the two died, they passed on the ownership of the property to their heirs,
namely, the Rocas. As lawful owners, the Rocas had the right, under Article 429 of the Civil Code, to exclude any person
from its enjoyment and disposal.1avvphi1
In fairness to the Fuentes spouses, however, they should be entitled, among other things, to recover from Tarcianos heirs,
the Rocas, the P200,000.00 that they paid him, with legal interest until fully paid, chargeable against his estate.
Further, the Fuentes spouses appear to have acted in good faith in entering the land and building improvements on it. Atty.
Plagata, whom the parties mutually entrusted with closing and documenting the transaction, represented that he got
Rosarios signature on the affidavit of consent. The Fuentes spouses had no reason to believe that the lawyer had
violated his commission and his oath. They had no way of knowing that Rosario did not come to Zamboanga to give her
consent. There is no evidence that they had a premonition that the requirement of consent presented some difficulty.
Indeed, they willingly made a 30 percent down payment on the selling price months earlier on the assurance that it was
forthcoming.
Further, the notarized document appears to have comforted the Fuentes spouses that everything was already in order
when Tarciano executed a deed of absolute sale in their favor on January 11, 1989. In fact, they paid the balance due him.
And, acting on the documents submitted to it, the Register of Deeds of Zamboanga City issued a new title in the names of
the Fuentes spouses. It was only after all these had passed that the spouses entered the property and built on it. He is
deemed a possessor in good faith, said Article 526 of the Civil Code, who is not aware that there exists in his title or mode
of acquisition any flaw which invalidates it.
As possessor in good faith, the Fuentes spouses were under no obligation to pay for their stay on the property prior to its
legal interruption by a final judgment against them. What is more, they are entitled under Article 448 to indemnity for the
improvements they introduced into the property with a right of retention until the reimbursement is made. Thus:
Art. 448. The owner of the land on which anything has been built, sown or planted in good faith, shall have the right to
appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in Articles 546 and 548,
or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper rent. However,
the builder or planter cannot be obliged to buy the land if its value is considerably more than that of the building or trees.
In such case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the building or trees
after proper indemnity. The parties shall agree upon the terms of the lease and in case of disagreement, the court shall fix
the terms thereof. (361a)
The Rocas shall of course have the option, pursuant to Article 546 of the Civil Code, of indemnifying the Fuentes spouses
for the costs of the improvements or paying the increase in value which the property may have acquired by reason of such
improvements.
WHEREFORE, the Court DENIES the petition and AFFIRMS WITH MODIFICATION the decision of the Court of Appeals
in CA-G.R. CV 00531 dated February 27, 2007 as follows:

1. The deed of sale dated January 11, 1989 that Tarciano T. Roca executed in favor of Manuel O. Fuentes,
married to Leticia L. Fuentes, as well as the Transfer Certificate of Title T-90,981 that the Register of Deeds of
Zamboanga City issued in the names of the latter spouses pursuant to that deed of sale are DECLARED void;
2. The Register of Deeds of Zamboanga City is DIRECTED to reinstate Transfer Certificate of Title 3533 in the
name of Tarciano T. Roca, married to Rosario Gabriel;
3. Respondents Gonzalo G. Roca, Annabelle R. Joson, Rose Marie R. Cristobal, and Pilar Malcampo are
ORDERED to pay petitioner spouses Manuel and Leticia Fuentes the P200,000.00 that the latter paid Tarciano T.
Roca, with legal interest from January 11, 1989 until fully paid, chargeable against his estate;
4. Respondents Gonzalo G. Roca, Annabelle R. Joson, Rose Marie R. Cristobal, and Pilar Malcampo are further
ORDERED, at their option, to indemnify petitioner spouses Manuel and Leticia Fuentes with their expenses for
introducing useful improvements on the subject land or pay the increase in value which it may have acquired by
reason of those improvements, with the spouses entitled to the right of retention of the land until the indemnity is
made; and
5. The RTC of Zamboanga City from which this case originated is DIRECTED to receive evidence and determine
the amount of indemnity to which petitioner spouses Manuel and Leticia Fuentes are entitled.
SO ORDERED.
G.R. No. 166496
November 9, 2006
JOSEFA BAUTISTA FERRER, Petitioner,
vs.
SPS. MANUEL M. FERRER & VIRGINIA FERRER and SPS. ISMAEL M. FERRER and FLORA FERRER,Respondents.
DECISION
CHICO-NAZARIO, J.:
Before this Court is an Appeal by Certiorari which assails the Decision of the Court of Appeals dated 16 August 2004 in
CA-G.R. SP No. 78525, reversing and setting aside the Order dated 16 December 2002 of the Regional Trial Court (RTC),
Mandaluyong City, Branch 212 in Civil Case No. MC02-1780. The Court of Appeals ordered the dismissal of the
Complaint filed by petitioner Josefa Bautista Ferrer against respondents Sps. Manuel M. Ferrer and Virginia Ferrer, and
Sps. Ismael M. Ferrer and Flora Ferrer in the aforesaid Civil Case No. MC02-1780.
In her Complaint for payment of conjugal improvements, sum of money, and accounting with prayer for injunction and
damages, petitioner alleged that she is the widow of Alfredo Ferrer (Alfredo), a half-brother of respondents Manuel M.
Ferrer (Manuel) and Ismael M. Ferrer (Ismael). Before her marriage to Alfredo, the latter acquired a piece of lot, covered
by Transfer Certificate of Title (TCT) No. 67927. He applied for a loan with the Social Security System (SSS) to build
improvements thereon, including a residential house and a two-door apartment building. However, it was during their
marriage that payment of the loan was made using the couples conjugal funds. From their conjugal funds, petitioner
posited, they constructed a warehouse on the lot. Moreover, petitioner averred that respondent Manuel occupied one door
of the apartment building, as well as the warehouse; however, in September 1991, he stopped paying rentals thereon,
alleging that he had acquired ownership over the property by virtue of a Deed of Sale executed by Alfredo in favor of
respondents, Manuel and Ismael and their spouses. TCT No. 67927 was cancelled, and TCT. No. 2728 was issued and
registered in the names of respondents.
It is petitioners contention that on 2 October 1989, when her husband was already bedridden, respondents Ismael and
Flora Ferrer made him sign a document, purported to be his last will and testament. The document, however, was a Deed
of Sale covering Alfredos lot and the improvements thereon. Learning of this development, Alfredo filed with the RTC of
Pasig, a Complaint for Annulment of the said sale against respondents, docketed as Civil Case No. 61327. On 22 June
1993, the RTC dismissed the same. The RTC found that the terms and conditions of the Deed of Sale are not contrary to
law, morals, good customs, and public policy, and should be complied with by the parties in good faith, there being no
compelling reason
under the law to do otherwise. The dismissal was affirmed by the Court of Appeals. Subsequently, on 7 November 1994,
this Court, in G.R. No. L-117067, finding no reversible error committed by the appellate court in affirming the dismissal of
the RTC, affirmed the Decision of the Court of Appeals.
Further, in support of her Complaint, petitioner alluded to a portion of the Decision dated 22 June 1993 of the RTC in Civil
Case No. 61327, which stated, to wit:
In determining which property is the principal and which is the accessory, the property of greater value shall be considered
the principal. In this case, the lot is the principal and the improvements the accessories. Since Article 120 of the Family
Code provides the rule that the ownership of accessory follows the ownership of the principal, then the subject lot with all
its improvements became an exclusive and capital property of Alfredo with an obligation to reimburse the conjugal
partnership of the cost of improvements at the time of liquidation of [the] conjugal partnership. Clearly, Alfredo has all the
rights to sell the subject property by himself without need of Josefas consent.
According to petitioner, the ruling of the RTC shows that, when Alfredo died on 29 September 1999, or at the time of the
liquidation of the conjugal partnership, she had the right to be reimbursed for the cost of the improvements on Alfredos lot.

She alleged that the cost of the improvements amounted to P500,000.00; hence, one-half thereof should be reimbursed
and paid by respondents as they are now the registered owners of Alfredos lot. She averred that respondents cannot
claim lack of knowledge about the fact that the improvements were constructed using conjugal funds as they had
occupied one of the apartment buildings on Alfredos lot, and even paid rentals to petitioner. In addition, petitioner prayed
that respondents be ordered to render an accounting from September, 1991, on the income of the boarding house
constructed thereon which they had appropriated for themselves, and to remit one-half thereof as her share. Finally,
petitioner sought from respondents moral and exemplary damages, litigation and incidental expenses.
For their part, respondents filed a Motion to Dismiss, contending that petitioner had no cause of action against them, and
that the cause of action was barred by prior judgment.
On 16 December 2002, the RTC rendered an Order, denying the Motion to Dismiss. According to the RTC, no
pronouncement as to the improvements constructed on Alfredos lot has been made in Civil Case No. 61327, and the
payment of petitioners share in the conjugal partnership constitutes a separate cause of action. A subsequent
Order dated 17 January 2003 was issued by the RTC, denying respondents Motion for Reconsideration.
Aggrieved, respondents elevated the case to the Court of Appeals by way of a Petition for Certiorari, alleging grave abuse
of discretion amounting to lack or excess of jurisdiction on the RTC in denying the dismissal.
On 16 August 2004, the Court of Appeals rendered a Decision granting the Petition. It held that petitioners Complaint
failed to state a cause of action. The appellate court rationalized as follows:
[W]e believe that the instant complaint is not the proper action for the respondent to enforce her right of reimbursement of
the cost of the improvement[s] on the subject property. As correctly pointed out by the petitioners, the same should be
made and directed in the settlement of estate of her deceased husband Alfredo Ferrer pursuant to Article 129 of the
Family Code. Such being the case, it appears that the complaint herein fails to state a cause of action against the
petitioners, the latter not being the proper parties against whom the subject action for reimbursement must be directed to.
A complaint states a cause of action where it contains three essential elements of a cause of action, namely: (1) the legal
right of the plaintiff; (2) the correlative obligation of the defendant, and (3) the act or omission of the defendant in violation
of said legal right. If these elements are absent, the complaint becomes vulnerable to a motion to dismiss on the ground of
failure to state a cause of action. Albeit the respondent herein has the legal right to be reimbursed of the cost of the
improvements of the subject property, it is not the petitioners but the estate of her deceased husband which has the
obligation to pay the same. The complaint herein is therefore dismissible for failure to state a cause of action against the
petitioners. Needless to say, the respondent is not without any further recourse as she may file her claim against the
estate of her deceased husband.
In light of the foregoing, we find that the public respondent committed grave abuse of discretion in denying the petitioners
motion to dismiss for failure to state a cause of action.
Aggrieved, petitioner filed a Motion for Reconsideration thereon. However, on 17 December 2004, the Court of Appeals
rendered a Resolution denying the motion.
Hence, the present recourse.
Petitioner submits the following grounds for the allowance of the instant Petition, to wit:
A. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT PETITIONERS COMPLAINT FAILS TO
STATE A CAUSE OF ACTION AGAINST THE RESPONDENTS, THE LATTER NOT BEING THE PROPER
PARTIES AGAINST WHOM THE SUBJECT ACTION FOR REIMBURSEMENT MUST BE DIRECTED TO.
B. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE PUBLIC RESPONDENT, HON.
RIZALINA T. CAPCO-UMALI, COMMITTED GRAVE ABUSE OF DISCRETION IN DENYING THE
[RESPONDENTS] MOTION TO DISMISS FOR FAILURE TO STATE A CAUSE OF ACTION.
Both arguments raise the sole issue of whether the Court of Appeals erred in dismissing petitioners Complaint for failure
to state a cause of action.
Section 1(g) Rule 16 of the 1997 Rules of Civil Procedure makes it clear that failure to make a sufficient allegation of a
cause of action in the complaint warrants the dismissal thereof. Section 2, Rule 2 of the 1997 Rules of Civil Procedure
defines a cause of action as the act or omission by which a party violates the right of another. It is the delict or the
wrongful act or omission committed by the defendant in violation of the primary right of the plaintiff.
A cause of action has the following essential elements, viz:
(1) A right in favor of the plaintiff by whatever means and under whatever law it arises or is created;
(2) An obligation on the part of the named defendant to respect or not to violate such right; and
(3) Act or omission on the part of such defendant in violation of the right of the plaintiff or constituting a breach of
the obligation of the defendant to the plaintiff for which the latter may maintain an action for recovery of damages
or other appropriate relief.
A complaint states a cause of action only when it has the three indispensable elements.
In the determination of the presence of these elements, inquiry is confined to the four corners of the complaint. Only the
statements in the Complaint may be properly considered. The absence of any of these elements makes a complaint
vulnerable to a Motion to Dismiss on the ground of a failure to state a cause of action.

After a reading of the allegations contained in petitioners Complaint, we are convinced that the same failed to state a
cause of action.
In the case at bar, petitioner asserts a legal right in her favor by relying on the Decision of the RTC in Civil Case No.
61327. It can be recalled that the aforesaid case is an action for Annulment filed by Alfredo and petitioner against the
respondents to seek annulment of the Deed of Sale, executed by Alfredo in respondents favor and covering the herein
subject premises. The Complaint was dismissed by the RTC, and subsequently affirmed by the Court of Appeals and by
this Court in G.R. No. L-117067.
According to petitioner, while the RTC in Civil Case No. 61327 recognized that the improvements constructed on Alfredos
lots were deemed as Alfredos exclusive and capital property, the court also held that petitioner, as Alfredos spouse, has
the right to claim reimbursement from the estate of Alfredo. It is argued by petitioner that her husband had no other
property, and his only property had been sold to the respondents; hence, she has the legal right to claim for
reimbursement from the respondents who are now the owners of the lot and the improvements thereon. In fine, petitioner
asseverates that the Complaint cannot be dismissed on the ground of failure to state a cause of action because the
respondents have the correlative obligation to pay the value of the improvements.
Petitioner was not able to show that there is an obligation on the part of the respondents to respect or not to violate her
right. While we could concede that Civil Case No. 61327 made a reference to the right of the spouse as contemplated in
Article 120 of the Family Code to be reimbursed for the cost of the improvements, the obligation to reimburse rests on the
spouse upon whom ownership of the entire property is vested. There is no obligation on the part of the purchaser of the
property, in case the property is sold by the owner-spouse.
Indeed, Article 120 provides the solution in determining the ownership of the improvements that are made on the separate
property of the spouses at the expense of the partnership or through the acts or efforts of either or both spouses. Thus,
when the cost of the improvement and any resulting increase in value are more than the value of the property at the time
of the improvement, the entire property of one of the spouses shall belong to the conjugal partnership, subject to
reimbursement of the value of the property of the owner-spouse at the time of the improvement; otherwise, said property
shall be retained in ownership by the owner-spouse, likewise subject to reimbursement of the cost of the improvement.
The subject property was precisely declared as the exclusive property of Alfredo on the basis of Article 120 of the Family
Code.
What is incontrovertible is that the respondents, despite the allegations contained in the Complaint that they are the
buyers of the subject premises, are not petitioners spouse nor can they ever be deemed as the owner-spouse upon
whom the obligation to reimburse petitioner for her costs rested. It is the owner-spouse who has the obligation to
reimburse the conjugal partnership or the spouse who expended the acts or efforts, as the case may be. Otherwise
stated, respondents do not have the obligation to respect petitioners right to be reimbursed.
On this matter, we do not find an act or omission on the part of respondents in violation of petitioners rights. The right of
the respondents to acquire as buyers the subject premises from Alfredo under the assailed Deed of Sale in Civil Case No.
61327 had been laid to rest. This is because the validity of the Deed of Sale had already been determined and upheld with
finality. The same had been similarly admitted by petitioner in her Complaint. It can be said, thus, that respondents act of
acquiring the subject property by sale was not in violation of petitioners rights. The same can also be said of the
respondents objection to reimburse petitioner. Simply, no correlative obligation exists on the part of the respondents to
reimburse the petitioner. Corollary thereto, neither can it be said that their refusal to reimburse constituted a violation of
petitioners rights. As has been shown in the foregoing, no obligation by the respondents under the law exists. Petitioners
Complaint failed to state a cause of action against the respondents, and for this reason, the Court of Appeals was not in
error in dismissing the same.
WHEREFORE, the Petition is DENIED. The Decision dated 16 August 2004 and the Resolution dated 17 December 2004
of the Court of Appeals in CA G.R. SP. No. 78525 are AFFIRMED. Costs de oficio.
SO ORDERED.
G.R. No. 149615 August 29, 2006
IN RE: PETITION FOR SEPARATION OF PROPERTY ELENA BUENAVENTURA MULLER, Petitioner,
vs.
HELMUT MULLER, Respondent.
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari assails the February 26, 2001 Decision of the Court of Appeals in CA-G.R. CV No.
59321 affirming with modification the August 12, 1996 Decision of the Regional Trial Court of Quezon City, Branch 86 in
Civil Case No. Q-94-21862, which terminated the regime of absolute community of property between petitioner and
respondent, as well as the Resolution dated August 13, 2001 denying the motion for reconsideration.
The facts are as follows:
Petitioner Elena Buenaventura Muller and respondent Helmut Muller were married in Hamburg, Germany on September
22, 1989. The couple resided in Germany at a house owned by respondents parents but decided to move and reside
permanently in the Philippines in 1992. By this time, respondent had inherited the house in Germany from his parents

which he sold and used the proceeds for the purchase of a parcel of land in Antipolo, Rizal at the cost of P528,000.00 and
the construction of a house amounting to P2,300,000.00. The Antipolo property was registered in the name of petitioner
under Transfer Certificate of Title No. 219438 of the Register of Deeds of Marikina, Metro Manila.
Due to incompatibilities and respondents alleged womanizing, drinking, and maltreatment, the spouses eventually
separated. On September 26, 1994, respondent filed a petition for separation of properties before the Regional Trial
Court of Quezon City.
On August 12, 1996, the trial court rendered a decision which terminated the regime of absolute community of property
between the petitioner and respondent. It also decreed the separation of properties between them and ordered the equal
partition of personal properties located within the country, excluding those acquired by gratuitous title during the marriage.
With regard to the Antipolo property, the court held that it was acquired using paraphernal funds of the respondent.
However, it ruled that respondent cannot recover his funds because the property was purchased in violation of Section 7,
Article XII of the Constitution. Thus
However, pursuant to Article 92 of the Family Code, properties acquired by gratuitous title by either spouse during the
marriage shall be excluded from the community property. The real property, therefore, inherited by petitioner in Germany
is excluded from the absolute community of property of the herein spouses. Necessarily, the proceeds of the sale of said
real property as well as the personal properties purchased thereby, belong exclusively to the petitioner. However, the part
of that inheritance used by the petitioner for acquiring the house and lot in this country cannot be recovered by the
petitioner, its acquisition being a violation of Section 7, Article XII of the Constitution which provides that "save in cases of
hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations or
associations qualified to acquire or hold lands of the public domain." The law will leave the parties in the situation where
they are in without prejudice to a voluntary partition by the parties of the said real property. x x x
xxxx
As regards the property covered by Transfer Certificate of Title No. 219438 of the Registry of Deeds of Marikina, Metro
Manila, situated in Antipolo, Rizal and the improvements thereon, the Court shall not make any pronouncement on
constitutional grounds.
Respondent appealed to the Court of Appeals which rendered the assailed decision modifying the trial courts Decision. It
held that respondent merely prayed for reimbursement for the purchase of the Antipolo property, and not acquisition or
transfer of ownership to him. It also considered petitioners ownership over the property in trust for the respondent. As
regards the house, the Court of Appeals ruled that there is nothing in the Constitution which prohibits respondent from
acquiring the same. The dispositive portion of the assailed decision reads:
WHEREFORE, in view of the foregoing, the Decision of the lower court dated August 12, 1996 is hereby MODIFIED.
Respondent Elena Buenaventura Muller is hereby ordered to REIMBURSE the petitioner the amount of P528,000.00 for
the acquisition of the land and the amount of P2,300,000.00 for the construction of the house situated in Atnipolo, Rizal,
deducting therefrom the amount respondent spent for the preservation, maintenance and development of the aforesaid
real property including the depreciation cost of the house or in the alternative to SELL the house and lot in the event
respondent does not have the means to reimburse the petitioner out of her own money and from the proceeds thereof,
reimburse the petitioner of the cost of the land and the house deducting the expenses for its maintenance and
preservation spent by the respondent. Should there be profit, the same shall be divided in proportion to the equity each
has over the property. The case is REMANDED to the lower court for reception of evidence as to the amount claimed by
the respondents for the preservation and maintenance of the property.
SO ORDERED.
Hence, the instant petition for review raising the following issues:
I
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT THE RESPONDENT HEREIN IS
ENTITLED TO REIMBURSEMENT OF THE AMOUNT USED TO PURCHASE THE LAND AS WELL AS THE COSTS
FOR THE CONSTRUCTION OF THE HOUSE, FOR IN SO RULING, IT INDIRECTLY ALLOWED AN ACT DONE WHICH
OTHERWISE COULD NOT BE DIRECTLY x x x DONE, WITHOUT DOING VIOLENCE TO THE CONSTITUTIONAL
PROSCRIPTION THAT AN ALIEN IS PROHIBITED FROM ACQUIRING OWNERSHIP OF REAL PROPERTIES
LOCATED IN THE PHILIPPINES.
II
THE COURT OF APPEALS GRAVELY ERRED IN SUSTAINING RESPONDENTS CAUSE OF ACTION WHICH IS
ACTUALLY A DESPERATE ATTEMPT TO OBTAIN OWNERSHIP OVER THE LOT IN QUESTION, CLOTHED UNDER
THE GUISE OF CLAIMING REIMBURSEMENT.
Petitioner contends that respondent, being an alien, is disqualified to own private lands in the Philippines; that respondent
was aware of the constitutional prohibition but circumvented the same; and that respondents purpose for filing an action
for separation of property is to obtain exclusive possession, control and disposition of the Antipolo property.
Respondent claims that he is not praying for transfer of ownership of the Antipolo property but merely reimbursement; that
the funds paid by him for the said property were in consideration of his marriage to petitioner; that the funds were given to
petitioner in trust; and that equity demands that respondent should be reimbursed of his personal funds.

The issue for resolution is whether respondent is entitled to reimbursement of the funds used for the acquisition of the
Antipolo property.
The petition has merit.
Section 7, Article XII of the 1987 Constitution states:
Save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals,
corporations, or associations qualified to acquire or hold lands of the public domain.
Aliens, whether individuals or corporations, are disqualified from acquiring lands of the public domain. Hence, they are
also disqualified from acquiring private lands. The primary purpose of the constitutional provision is the conservation of
the national patrimony. In the case of Krivenko v. Register of Deeds, the Court held:
Under section 1 of Article XIII of the Constitution, "natural resources, with the exception of public agricultural land, shall
not be alienated," and with respect to public agricultural lands, their alienation is limited to Filipino citizens. But this
constitutional purpose conserving agricultural resources in the hands of Filipino citizens may easily be defeated by the
Filipino citizens themselves who may alienate their agricultural lands in favor of aliens. It is partly to prevent this result that
section 5 is included in Article XIII, and it reads as follows:
"Sec. 5. Save in cases of hereditary succession, no private agricultural land will be transferred or assigned except to
individuals, corporations, or associations qualified to acquire or hold lands of the public domain in the Philippines."
This constitutional provision closes the only remaining avenue through which agricultural resources may leak into aliens
hands. It would certainly be futile to prohibit the alienation of public agricultural lands to aliens if, after all, they may be
freely so alienated upon their becoming private agricultural lands in the hands of Filipino citizens. x x x
xxxx
If the term "private agricultural lands" is to be construed as not including residential lots or lands not strictly agricultural,
the result would be that "aliens may freely acquire and possess not only residential lots and houses for themselves but
entire subdivisions, and whole towns and cities," and that "they may validly buy and hold in their names lands of any area
for building homes, factories, industrial plants, fisheries, hatcheries, schools, health and vacation resorts, markets, golf
courses, playgrounds, airfields, and a host of other uses and purposes that are not, in appellants words, strictly
agricultural." (Solicitor Generals Brief, p. 6.) That this is obnoxious to the conservative spirit of the Constitution is beyond
question.
Respondent was aware of the constitutional prohibition and expressly admitted his knowledge thereof to this Court. He
declared that he had the Antipolo property titled in the name of petitioner because of the said prohibition. His attempt at
subsequently asserting or claiming a right on the said property cannot be sustained.
The Court of Appeals erred in holding that an implied trust was created and resulted by operation of law in view of
petitioners marriage to respondent. Save for the exception provided in cases of hereditary succession, respondents
disqualification from owning lands in the Philippines is absolute. Not even an ownership in trust is allowed. Besides, where
the purchase is made in violation of an existing statute and in evasion of its express provision, no trust can result in favor
of the party who is guilty of the fraud. To hold otherwise would allow circumvention of the constitutional prohibition.
Invoking the principle that a court is not only a court of law but also a court of equity, is likewise misplaced. It has been
held that equity as a rule will follow the law and will not permit that to be done indirectly which, because of public policy,
cannot be done directly. He who seeks equity must do equity, and he who comes into equity must come with clean hands.
The latter is a frequently stated maxim which is also expressed in the principle that he who has done inequity shall not
have equity. It signifies that a litigant may be denied relief by a court of equity on the ground that his conduct has been
inequitable, unfair and dishonest, or fraudulent, or deceitful as to the controversy in issue.
Thus, in the instant case, respondent cannot seek reimbursement on the ground of equity where it is clear that he willingly
and knowingly bought the property despite the constitutional prohibition.
Further, the distinction made between transfer of ownership as opposed to recovery of funds is a futile exercise on
respondents part. To allow reimbursement would in effect permit respondent to enjoy the fruits of a property which he is
not allowed to own. Thus, it is likewise proscribed by law. As expressly held in Cheesman v. Intermediate Appellate Court:
Finally, the fundamental law prohibits the sale to aliens of residential land. Section 14, Article XIV of the 1973 Constitution
ordains that, "Save in cases of hereditary succession, no private land shall be transferred or conveyed except to
individuals, corporations, or associations qualified to acquire or hold lands of the public domain." Petitioner Thomas
Cheesman was, of course, charged with knowledge of this prohibition. Thus, assuming that it was his intention that the lot
in question be purchased by him and his wife, he acquired no right whatever over the property by virtue of that purchase;
and in attempting to acquire a right or interest in land, vicariously and clandestinely, he knowingly violated the
Constitution; the sale as to him was null and void. In any event, he had and has no capacity or personality to question the
subsequent sale of the same property by his wife on the theory that in so doing he is merely exercising the prerogative of
a husband in respect of conjugal property. To sustain such a theory would permit indirect controversion of the
constitutional prohibition. If the property were to be declared conjugal, this would accord to the alien husband a not
insubstantial interest and right over land, as he would then have a decisive vote as to its transfer or disposition. This is a
right that the Constitution does not permit him to have.

As already observed, the finding that his wife had used her own money to purchase the property cannot, and will not, at
this stage of the proceedings be reviewed and overturned. But even if it were a fact that said wife had used conjugal funds
to make the acquisition, the considerations just set out to militate, on high constitutional grounds, against his recovering
and holding the property so acquired, or any part thereof. And whether in such an event, he may recover from his wife any
share of the money used for the purchase or charge her with unauthorized disposition or expenditure of conjugal funds is
not now inquired into; that would be, in the premises, a purely academic exercise. (Emphasis added)
WHEREFORE, in view of the foregoing, the instant petition is GRANTED. The Decision dated February 26, 2001 of the
Court of Appeals in CA-G.R. CV No. 59321 ordering petitioner Elena Buenaventura Muller to reimburse respondent
Helmut Muller the amount of P528,000 for the acquisition of the land and the amount of P2,300,000 for the construction of
the house in Antipolo City, and the Resolution dated August 13, 2001 denying reconsideration thereof, are REVERSED
and SET ASIDE. The August 12, 1996 Decision of the Regional Trial Court of Quezon City, Branch 86 in Civil Case No. Q94-21862 terminating the regime of absolute community between the petitioner and respondent, decreeing a separation of
property between them and ordering the partition of the personal properties located in the Philippines equally, is
REINSTATED.
SO ORDERED.
VIRGILIO MAQUILAN, G.R. NO. 155409
Petitioner,
Present:
YNARES-SANTIAGO, J.,
Chairperson,
- versus - AUSTRIA-MARTINEZ,
CHICO-NAZARIO, and
NACHURA, JJ.
DITA MAQUILAN, Promulgated:
Respondent. June 8, 2007
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
DECISION
AUSTRIA-MARTINEZ, J.:
Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the
Decision dated August 30, 2002 promulgated by the Court of Appeals (CA) in CA-G.R. SP No. 69689, which affirmed the
Judgment on Compromise Agreement dated January 2, 2002 of the Regional Trial Court (RTC), Branch
3, Nabunturan, Compostela Valley, and the RTC Orders dated January 21, 2002 and February 7, 2002 (ORDERS) in Civil
Case No. 656.
The facts of the case, as found by the CA, are as follows:
Herein petitioner and herein private respondent are spouses who once had a blissful married life and out
of which were blessed to have a son. However, their once sugar coated romance turned bitter when
petitioner discovered that private respondent was having illicit sexual affair with her paramour, which thus,
prompted the petitioner to file a case of adultery against private respondent and the latters
paramour. Consequently, both the private respondent and her paramour were convicted of the crime
charged and were sentenced to suffer an imprisonment ranging from one (1) year, eight (8) months,
minimum of prision correccional as minimum penalty, to three (3) years, six (6) months and twenty one
(21) days, medium of prision correccional as maximum penalty.
Thereafter, private respondent, through counsel, filed a Petition for Declaration of Nullity of Marriage,
Dissolution and Liquidation of Conjugal Partnership of Gains and Damages on June 15, 2001 with the
Regional Trial Court, Branch 3 of Nabunturan, Compostela Valley, docketed as Civil Case No. 656,
imputing psychological incapacity on the part of the petitioner.
During the pre-trial of the said case, petitioner and private respondent entered into a COMPROMISE
AGREEMENT in the following terms, to wit:
1. In partial settlement of the conjugal partnership of gains, the parties agree to the
following:

a.

P500,000.00 of the money deposited in the bank jointly in the name of


the spouses shall be withdrawn and deposited in favor and in trust of
their common child, Neil Maquilan, with the deposit in the joint account of
the parties.
The balance of such deposit, which presently stands atP1,318,043.36,
shall be withdrawn and divided equally by the parties;

b.

The store that is now being occupied by the plaintiff shall be allotted to
her while the bodega shall be for the defendant. The defendant shall be
paid the sum ofP50,000.00 as his share in the stocks of the store in full
settlement thereof.
The plaintiff shall be allowed to occupy the bodega until the time the
owner of the lot on which it stands shall construct a building thereon;

c. The motorcycles shall be divided between them such that


the Kawasaki shall be owned by the plaintiff while the Honda Dream shall
be for the defendant;
d. The passenger jeep shall be for the plaintiff who shall pay the defendant
the sum of P75,000.00 as his share thereon and in full settlement
thereof;
e. The house and lot shall be to the common child.
2. This settlement is only partial, i.e., without prejudice to the litigation of other conjugal
properties that have not been mentioned;
xxxx
The said Compromise Agreement was given judicial imprimatur by the respondent judge in the
assailed Judgment On Compromise Agreement, which was erroneously dated January 2, 2002.
However, petitioner filed an Omnibus Motion dated January 15, 2002, praying for the repudiation of the
Compromise Agreement and the reconsideration of the Judgment on Compromise Agreement by the
respondent judge on the grounds that his previous lawyer did not intelligently and judiciously apprise him
of the consequential effects of the Compromise Agreement.
The respondent Judge in the assailed Order dated January 21, 2002, denied the aforementioned
Omnibus Motion.
Displeased, petitioner filed a Motion for Reconsideration of the aforesaid Order, but the same was denied
in the assailed Order dated February 7, 2002. (Emphasis supplied)
The petitioner filed a Petition for Certiorari and Prohibition with the CA under Rule 65 of the Rules of Court claiming that
the RTC committed grave error and abuse of discretion amounting to lack or excess of jurisdiction (1) in upholding the
validity of the Compromise Agreement dated January 11, 2002; (2) when it held in its Order dated February 7, 2002 that
the Compromise Agreement was made within the cooling-off period; (3) when it denied petitioners Motion to Repudiate
Compromise Agreement and to Reconsider Its Judgment on Compromise Agreement; and (4) when it conducted the
proceedings without the appearance and participation of the Office of the Solicitor General and/or the Provincial
Prosecutor.
On August 30, 2002, the CA dismissed the Petition for lack of merit. The CA held that the conviction of the respondent of
the crime of adultery does not ipso facto disqualify her from sharing in the conjugal property, especially considering that
she had only been sentenced with the penalty ofprision correccional, a penalty that does not carry the accessory penalty
of civil interdiction which deprives the person of the rights to manage her property and to dispose of such
property inter vivos; that Articles 43 and 63 of the Family Code, which pertain to the effects of a nullified marriage and the
effects of legal separation, respectively, do not apply, considering, too, that the Petition for the Declaration of the Nullity of
Marriage filed by the respondent invoking Article 36 of the Family Code has yet to be decided, and, hence, it is premature
to apply Articles 43 and 63 of the Family Code; that, although adultery is a ground for legal separation, nonetheless,

Article 63 finds no application in the instant case since no petition to that effect was filed by the petitioner against the
respondent; that the spouses voluntarily separated their property through their Compromise Agreement with court
approval under Article 134 of the Family Code; that the Compromise Agreement, which embodies the voluntary separation
of property, is valid and binding in all respects because it had been voluntarily entered into by the parties; that,
furthermore, even if it were true that the petitioner was not duly informed by his previous counsel about the legal effects of
the Compromise Agreement, this point is untenable since the mistake or negligence of the lawyer binds his client, unless
such mistake or negligence amounts to gross negligence or deprivation of due process on the part of his client; that these
exceptions are not present in the instant case; that the Compromise Agreement was plainly worded and written in simple
language, which a person of ordinary intelligence can discern the consequences thereof, hence, petitioners claim that his
consent was vitiated is highly incredible; that the Compromise Agreement was made during the existence of the marriage
of the parties since it was submitted during thependency of the petition for declaration of nullity of marriage; that the
application of Article 2035 of the Civil Code is misplaced; that the cooling-off period under Article 58 of the Family Code
has no bearing on the validity of the Compromise Agreement; that the Compromise Agreement is not contrary to law,
morals, good customs, public order, and public policy; that this agreement may not be later disowned simply because of a
change of mind; that the presence of the Solicitor General or his deputy is not indispensable to the execution and validity
of the Compromise Agreement, since the purpose of his presence is to curtail any collusion between the parties and to
see to it that evidence is not fabricated, and, with this in mind, nothing in the Compromise Agreement touches on the very
merits of the case of declaration of nullity of marriage for the court to be wary of any possible collusion; and, finally, that
the Compromise Agreement is merely an agreement between the parties to separate their conjugal properties partially
without prejudice to the outcome of the pending case of declaration of nullity of marriage.
Hence, herein Petition, purely on questions of law, raising the following issues:
I.
WHETHER OF NOT A SPOUSE CONVICTED OF EITHER CONCUBINAGE OR ADULTERY, CAN STILL
SHARE IN THE CONJUGAL PARTNERSHIP;
II
WHETHER OR NOT A COMPROMISE AGREEMENT ENTERED INTO BY SPOUSES, ONE OF WHOM
WAS CONVICTED OF ADULTERY, GIVING THE CONVICTED SPOUSE A SHARE IN THE CONJUGAL
PROPERTY, VALID AND LEGAL;
III
WHETHER OR NOT A JUDGMENT FOR ANNULMENT AND LEGAL SEPARATION IS A PREREQUISITE BEFORE A SPOUSE CONVICTED OF EITHER CONCUBINAGE OR ADULTERY, BE
DISQUALIFIED AND PROHIBITED FROM SHARING IN THE CONJUGAL PROPERTY;
IV
WHETHER OR NOT THE DISQUALIFICATION OF A CONVICTED SPOUSE OF ADULTERY FROM
SHARING IN A CONJUGAL PROPERTY, CONSTITUTES CIVIL INTERDICTION.
The petitioner argues that the Compromise Agreement should not have been given judicial imprimatur since it is
against law and public policy; that the proceedings where it was approved is null and void, there being no
appearance and participation of the Solicitor General or the Provincial Prosecutor; that it was timely repudiated;
and that the respondent, having been convicted of adultery, is therefore disqualified from sharing in the conjugal
property.
The Petition must fail.
The essential question is whether the partial voluntary separation of property made by the spouses pending the petition
for declaration of nullity of marriage is valid.
First. The petitioner contends that the Compromise Agreement is void because it circumvents the law that prohibits the
guilty spouse, who was convicted of either adultery or concubinage, from sharing in the conjugal property. Since the
respondent was convicted of adultery, the petitioner argues that her share should be forfeited in favor of the common child
under Articles 43(2) and 63 of the Family Code.
To the petitioner, it is the clear intention of the law to disqualify the spouse convicted of adultery from sharing in the
conjugal property; and because the Compromise Agreement is void, it never became final and executory.
Moreover, the petitioner cites Article 2035 of the Civil Code and argues that since adultery is a ground for legal separation,
the Compromise Agreement is therefore void.

These arguments are specious. The foregoing provisions of the law are inapplicable to the instant case.
Article 43 of the Family Code refers to Article 42, to wit:
Article 42. The subsequent marriage referred to in the preceding Articleshall be automatically terminated
by the recording of the affidavit of reappearance of the absent spouse, unless there is a judgment
annulling the previous marriage or declaring it void ab initio.
A sworn statement of the fact and circumstances of reappearance shall be recorded in the civil registry of
the residence of the parties to the subsequent marriage at the instance of any interested person, with due
notice to the spouses of the subsequent marriage and without prejudice to the fact of reappearance being
judicially determined in case such fact is disputed.
where a subsequent marriage is terminated because of the reappearance of an absent spouse; while Article 63 applies to
the effects of a decree of legal separation. The present case involves a proceeding where the nullity of the marriage is
sought to be declared under the ground of psychological capacity.
Article 2035 of the Civil Code is also clearly inapplicable. The Compromise Agreement partially divided the properties of
the conjugal partnership of gains between the parties and does not deal with the validity of a marriage or legal
separation. It is not among those that are expressly prohibited by Article 2035.
Moreover, the contention that the Compromise Agreement is tantamount to a circumvention of the law prohibiting the
guilty spouse from sharing in the conjugal properties is misplaced. Existing law and jurisprudence do not impose such
disqualification.
Under Article 143 of the Family Code, separation of property may be effected voluntarily or for sufficient cause, subject to
judicial approval. The questioned Compromise Agreement which was judicially approved is exactly such a separation of
property allowed under the law. This conclusion holds true even if the proceedings for the declaration of nullity of marriage
was still pending. However, the Court must stress that this voluntary separation of property is subject to the rights
of all creditors of the conjugal partnership of gains and other persons with pecuniary interest pursuant to Article
136 of the Family Code.
Second. Petitioners claim that since the proceedings before the RTC were void in the absence of the participation of the
provincial prosecutor or solicitor, the voluntary separation made during the pendency of the case is also void. The
proceedings pertaining to the Compromise Agreement involved the conjugal properties of the spouses. The settlement
had no relation to the questions surrounding the validity of their marriage. Nor did the settlement amount to a
collusion between the parties.
Article 48 of the Family Code states:
Art. 48. In all cases of annulment or declaration of absolute nullity of marriage, the Court shall order the
prosecuting attorney or fiscal assigned to it to appear on behalf of the State to take steps to prevent
collusion between the parties and to take care that the evidence is not fabricated or
suppressed. (Emphasis supplied)
Section 3(e) of Rule 9 of the 1997 Rules of Court provides:
SEC. 3. Default; declaration of.- x x x x
xxxx
(e) Where no defaults allowed. If the defending party in action for annulment or declaration of
nullity of marriage or for legal separation fails to answer, the court shall order the prosecuting attorney
to investigate whether or not a collusion between the parties exists if there is no collusion, to
intervene for the State in order to see to it that the evidence submitted is not fabricated. (Emphasis
supplied
Truly, the purpose of the active participation of the Public Prosecutor or the Solicitor General is to ensure that the interest
of the State is represented and protected in proceedings for annulment and declaration of nullity of marriages by
preventing collusion between the parties, or the fabrication or suppression of evidence. While the appearances of the
Solicitor General and/or the Public Prosecutor are mandatory, the failure of the RTC to require their appearance does
not per se nullify the Compromise Agreement. This Court fully concurs with the findings of the CA:
x x x. It bears emphasizing that the intendment of the law in requiring the presence of the Solicitor
General and/or State prosecutor in all proceedings of legal separation and annulment or declaration of

nullity of marriage is to curtail or prevent any possibility of collusion between the parties and to see to it
that their evidence respecting the case is not fabricated. In the instant case, there is no exigency for the
presence of the Solicitor General and/or the State prosecutor because as already stated, nothing in the
subject compromise agreement touched into the very merits of the case of declaration of nullity of
marriage for the court to be wary of any possible collusion between the parties. At the risk of
beingrepetiti[ve], the compromise agreement pertains merely to an agreement between the petitioner and
the private respondent to separate their conjugal properties partially without prejudice to the outcome of
the pending case of declaration of nullity of marriage.
Third. The conviction of adultery does not carry the accessory of civil interdiction. Article 34 of the Revised Penal Code
provides for the consequences of civil interdiction:
Art. 34. Civil Interdiction. Civil interdiction shall deprive the offender during the time of his sentence of the
rights of parental authority, or guardianship, either as to the person or property of any ward, of marital
authority, of the right to manage his property and of the right to dispose of such property by any act or any
conveyance inter vivos.
Under Article 333 of the same Code, the penalty for adultery is prisioncorreccional in its medium and maximum
periods. Article 333 should be read with Article 43 of the same Code. The latter provides:
Art. 43. Prision correccional Its accessory penalties. The penalty ofprision correccional shall carry with it
that of suspension from public office, from the right to follow a profession or calling, and that of perpetual
special disqualification from the right of suffrage, if the duration of said imprisonment shall exceed
eighteen months. The offender shall suffer the disqualification provided in this article although pardoned
as to the principal penalty, unless the same shall have been expressly remitted in the pardon.
It is clear, therefore, and as correctly held by the CA, that the crime of adultery does not carry the accessory penalty of
civil interdiction which deprives the person of the rights to manage her property and to dispose of such
property inter vivos.
Fourth. Neither could it be said that the petitioner was not intelligently and judiciously informed of the consequential effects
of the compromise agreement, and that, on this basis, he may repudiate the Compromise Agreement. The argument of
the petitioner that he was not duly informed by his previous counsel about the legal effects of the voluntary settlement is
not convincing. Mistake or vitiation of consent, as now claimed by the petitioner as his basis for repudiating the settlement,
could hardly be said to be evident. In Salonga v. Court of Appeals, this Court held:
[I]t is well-settled that the negligence of counsel binds the client. This is based on the rule that any act
performed by a lawyer within the scope of his general or implied authority is regarded as an act of his
client. Consequently, the mistake or negligence of petitioners' counsel may result in the rendition of an
unfavorable judgment against them.
Exceptions to the foregoing have been recognized by the Court in cases where reckless or gross
negligence of counsel deprives the client of due process of law, or when its application "results in the
outright deprivation of one's property through a technicality." x x x x
None of these exceptions has been sufficiently shown in the present case.
WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals is AFFIRMED with MODIFICATION that the
subject Compromise Agreement is VALID without prejudice to the rights of all creditors and other persons with pecuniary
interest in the properties of the conjugal partnership of gains.
SO ORDERED.
G.R. No. 195670
December 3, 2012
WILLEM BEUMER, Petitioner,
vs.
AVELINA AMORES, Respondent.
DECISION
PERLAS-BERNABE, J.:
Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of CoLlli assailing the October 8, 2009
Decision and January 24, 2011 Resolution of the court of Appeals (CA) in CA-G.R. CV No. 01940, which affirmed the
February 28, 2007 Decision of the Regional Trial Court (RTC) of Negros Oriental, Branch 34 in Civil Case No. I 2884. The

foregoing rulings dissolved the conjugal partnership of gains of Willem Beumer (petitioner) and Avelina Amores
(respondent) and distributed the properties forming part of the said property regime.
The Factual Antecedents
Petitioner, a Dutch National, and respondent, a Filipina, married in March 29, 1980. After several years, the RTC of
Negros Oriental, Branch 32, declared the nullity of their marriage in the Decision dated November 10, 2000 on the basis
of the formers psychological incapacity as contemplated in Article 36 of the Family Code.
Consequently, petitioner filed a Petition for Dissolution of Conjugal Partnership dated December 14, 2000 praying for the
distribution of the following described properties claimed to have been acquired during the subsistence of their marriage,
to wit:
By Purchase:
a. Lot 1, Block 3 of the consolidated survey of Lots 2144 & 2147 of the Dumaguete Cadastre, covered by Transfer
Certificate of Title (TCT) No. 22846, containing an area of 252 square meters (sq.m.), including a residential
house constructed thereon.
b. Lot 2142 of the Dumaguete Cadastre, covered by TCT No. 21974, containing an area of 806 sq.m., including a
residential house constructed thereon.
c. Lot 5845 of the Dumaguete Cadastre, covered by TCT No. 21306, containing an area of 756 sq.m.
d. Lot 4, Block 4 of the consolidated survey of Lots 2144 & 2147 of the Dumaguete Cadastre, covered by TCT No.
21307, containing an area of 45 sq.m.
By way of inheritance:
e. 1/7 of Lot 2055-A of the Dumaguete Cadastre, covered by TCT No. 23567, containing an area of 2,635 sq.m.
(the area that appertains to the conjugal partnership is 376.45 sq.m.).
f. 1/15 of Lot 2055-I of the Dumaguete Cadastre, covered by TCT No. 23575, containing an area of 360 sq.m. (the
area that appertains to the conjugal partnership is 24 sq.m.).
In defense, respondent averred that, with the exception of their two (2) residential houses on Lots 1 and 2142, she and
petitioner did not acquire any conjugal properties during their marriage, the truth being that she used her own personal
money to purchase Lots 1, 2142, 5845 and 4 out of her personal funds and Lots 2055-A and 2055-I by way of
inheritance. She submitted a joint affidavit executed by her and petitioner attesting to the fact that she purchased Lot 2142
and the improvements thereon using her own money. Accordingly, respondent sought the dismissal of the petition for
dissolution as well as payment for attorneys fees and litigation expenses.
During trial, petitioner testified that while Lots 1, 2142, 5845 and 4 were registered in the name of respondent, these
properties were acquired with the money he received from the Dutch government as his disability benefitsince respondent
did not have sufficient income to pay for their acquisition. He also claimed that the joint affidavit they submitted before the
Register of Deeds of Dumaguete City was contrary to Article 89 of the Family Code, hence, invalid.
For her part, respondent maintained that the money used for the purchase of the lots came exclusively from her personal
funds, in particular, her earnings from selling jewelry as well as products from Avon, Triumph and Tupperware. She further
asserted that after she filed for annulment of their marriage in 1996, petitioner transferred to their second house and
brought along with him certain personal properties, consisting of drills, a welding machine, grinders, clamps, etc. She
alleged that these tools and equipment have a total cost of P500,000.00.
The RTC Ruling
On February 28, 2007, the RTC of Negros Oriental, Branch 34 rendered its Decision, dissolving the parties conjugal
partnership, awarding all the parcels of land to respondent as her paraphernal properties; the tools and equipment in favor
of petitioner as his exclusive properties; the two (2) houses standing on Lots 1 and 2142 as co-owned by the parties, the
dispositive of which reads:
WHEREFORE, judgment is hereby rendered granting the dissolution of the conjugal partnership of gains between
petitioner Willem Beumer and respondent Avelina Amores considering the fact that their marriage was previously annulled
by Branch 32 of this Court. The parcels of land covered by Transfer Certificate of Titles Nos. 22846, 21974, 21306, 21307,
23567 and 23575 are hereby declared paraphernal properties of respondent Avelina Amores due to the fact that while
these real properties were acquired by onerous title during their marital union, Willem Beumer, being a foreigner, is not
allowed by law to acquire any private land in the Philippines, except through inheritance.
The personal properties, i.e., tools and equipment mentioned in the complaint which were brought out by Willem from the
conjugal dwelling are hereby declared to be exclusively owned by the petitioner.
The two houses standing on the lots covered by Transfer Certificate of Title Nos. 21974 and 22846 are hereby declared to
be co-owned by the petitioner and the respondent since these were acquired during their marital union and since there is
no prohibition on foreigners from owning buildings and residential units. Petitioner and respondent are, thereby, directed to
subject this court for approval their project of partition on the two houses aforementioned.
The Court finds no sufficient justification to award the counterclaim of respondent for attorneys fees considering the well
settled doctrine that there should be no premium on the right to litigate. The prayer for moral damages are likewise denied
for lack of merit.

No pronouncement as to costs.
SO ORDERED.
It ruled that, regardless of the source of funds for the acquisition of Lots 1, 2142, 5845 and 4, petitioner could not have
acquired any right whatsoever over these properties as petitioner still attempted to acquire them notwithstanding his
knowledge of the constitutional prohibition against foreign ownership of private lands. This was made evident by the
sworn statements petitioner executed purporting to show that the subject parcels of land were purchased from the
exclusive funds of his wife, the herein respondent. Petitioners plea for reimbursement for the amount he had paid to
purchase the foregoing properties on the basis of equity was likewise denied for not having come to court with clean
hands.
The CA Ruling
Petitioner elevated the matter to the CA, contesting only the RTCs award of Lots 1, 2142, 5845 and 4 in favor of
respondent. He insisted that the money used to purchase the foregoing properties came from his own capital funds and
that they were registered in the name of his former wife only because of the constitutional prohibition against foreign
ownership. Thus, he prayed for reimbursement of one-half (1/2) of the value of what he had paid in the purchase of the
said properties, waiving the other half in favor of his estranged ex-wife.
On October 8, 2009, the CA promulgated a Decision affirming in toto the judgment rendered by the RTC of Negros
Oriental, Branch 34. The CA stressed the fact that petitioner was "well-aware of the constitutional prohibition for aliens to
acquire lands in the Philippines." Hence, he cannot invoke equity to support his claim for reimbursement.
Consequently, petitioner filed the instant Petition for Review on Certiorari assailing the CA Decision due to the following
error:
UNDER THE FACTS ESTABLISHED, THE COURT ERRED IN NOT SUSTAINING THE PETITIONERS ATTEMPT AT
SUBSEQUENTLY ASSERTING OR CLAIMING A RIGHT OF HALF OR WHOLE OF THE PURCHASE PRICE USED IN
THE PURCHASE OF THE REAL PROPERTIES SUBJECT OF THIS CASE. (Emphasis supplied)
The Ruling of the Court
The petition lacks merit.
The issue to be resolved is not of first impression. In In Re: Petition For Separation of Property-Elena Buenaventura
Muller v. Helmut Muller the Court had already denied a claim for reimbursement of the value of purchased parcels of
Philippine land instituted by a foreigner Helmut Muller, against his former Filipina spouse, Elena Buenaventura Muller. It
held that Helmut Muller cannot seek reimbursement on the ground of equity where it is clear that he willingly and
knowingly bought the property despite the prohibition against foreign ownership of Philippine land enshrined under
Section 7, Article XII of the 1987 Philippine Constitution which reads:
Section 7. Save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals,
corporations, or associations qualified to acquire or hold lands of the public domain.
Undeniably, petitioner openly admitted that he "is well aware of the above-cited constitutional prohibition" and even
asseverated that, because of such prohibition, he and respondent registered the subject properties in the latters
name. Clearly, petitioners actuations showed his palpable intent to skirt the constitutional prohibition. On the basis of such
admission, the Court finds no reason why it should not apply the Muller ruling and accordingly, deny petitioners claim for
reimbursement.
As also explained in Muller, the time-honored principle is that he who seeks equity must do equity, and he who comes into
equity must come with clean hands. Conversely stated, he who has done inequity shall not be accorded equity. Thus, a
litigant may be denied relief by a court of equity on the ground that his conduct has been inequitable, unfair and dishonest,
or fraudulent, or deceitful.
In this case, petitioners statements regarding the real source of the funds used to purchase the subject parcels of land
dilute the veracity of his claims: While admitting to have previously executed a joint affidavit that respondents personal
funds were used to purchase Lot 1, he likewise claimed that his personal disability funds were used to acquire the same.
Evidently, these inconsistencies show his untruthfulness. Thus, as petitioner has come before the Court with unclean
hands, he is now precluded from seeking any equitable refuge.
In any event, the Court cannot, even on the grounds of equity, grant reimbursement to petitioner given that he acquired no
right whatsoever over the subject properties by virtue of its unconstitutional purchase. It is well-established that equity as
a rule will follow the law and will not permit that to be done indirectly which, because of public policy, cannot be done
directly. Surely, a contract that violates the Constitution and the law is null and void, vests no rights, creates no obligations
and produces no legal effect at all. Corollary thereto, under Article 1412 of the Civil Code, petitioner cannot have the
subject properties deeded to him or allow him to recover the money he had spent for the purchase thereof. The law will
not aid either party to an illegal contract or agreement; it leaves the parties where it finds them. Indeed, one cannot
salvage any rights from an unconstitutional transaction knowingly entered into.
Neither can the Court grant petitioners claim for reimbursement on the basis of unjust enrichment. As held in Frenzel v.
Catito, a case also involving a foreigner seeking monetary reimbursement for money spent on purchase of Philippine land,
the provision on unjust enrichment does not apply if the action is proscribed by the Constitution, to wit:

Futile, too, is petitioner's reliance on Article 22 of the New Civil Code which reads:
Art. 22. Every person who through an act of performance by another, or any other means, acquires or comes into
possession of something at the expense of the latter without just or legal ground, shall return the same to him.
The provision is expressed in the maxim: "MEMO CUM ALTERIUS DETER DETREMENTO PROTEST" (No person
should unjustly enrich himself at the expense of another). An action for recovery of what has been paid without just cause
has been designated as an accion in rem verso. This provision does not apply if, as in this case, the action is proscribed
by the Constitution or by the application of the pari delicto doctrine. It may be unfair and unjust to bar the petitioner from
filing an accion in rem verso over the subject properties, or from recovering the money he paid for the said properties, but,
as Lord Mansfield stated in the early case of Holman v. Johnson: "The objection that a contract is immoral or illegal as
between the plaintiff and the defendant, sounds at all times very ill in the mouth of the defendant. It is not for his sake,
however, that the objection is ever allowed; but it is founded in general principles of policy, which the defendant has the
advantage of, contrary to the real justice, as between him and the plaintiff." (Citations omitted)
Nor would the denial of his claim amount to an injustice based on his foreign citizenship. Precisely, it is the Constitution
itself which demarcates the rights of citizens and non-citizens in owning Philippine land. To be sure, the constitutional ban
against foreigners applies only to ownership of Philippine land and not to the improvements built thereon, such as the two
(2) houses standing on Lots 1 and 2142 which were properly declared to be co-owned by the parties subject to partition.
Needless to state, the purpose of the prohibition is to conserve the national patrimony and it is this policy which the Court
is duty-bound to protect.
WHEREFORE, the petition is DENIED. Accordingly, the assailed October 8, 2009 Decision and January 24, 2011
Resolution of the Court of Appeals in CA-G.R. CV No. 01940 are AFFIRMED.
SO ORDERED.
G.R. No. 188289
August 20, 2014
DAVID A. NOVERAS, Petitioner,
vs.
LETICIA T. NOVERAS, Respondent.
DECISION
PEREZ, J.:
Before the Court is a petition for review assailing the 9 May 2008 Decision of the Court of Appeals in CA-G.R .. CV No.
88686, which affirmed in part the 8 December 2006 Decision of the Regional Trial Court (RTC) of Baler, Aurora, Branch
96.
The factual antecedents are as follow:
David A. Noveras (David) and Leticia T. Noveras (Leticia) were married on 3 December 1988 in Quezon City, Philippines.
They resided in California, United States of America (USA) where they eventually acquired American citizenship. They
then begot two children, namely: Jerome T.
Noveras, who was born on 4 November 1990 and JenaT. Noveras, born on 2 May 1993. David was engaged in courier
service business while Leticia worked as a nurse in San Francisco, California.
During the marriage, they acquired the following properties in the Philippines and in the USA:
PHILIPPINES
PROPERTY

FAIR MARKET VALUE

House and Lot with an area of 150 sq. m.


located at 1085 Norma Street, Sampaloc,
Manila (Sampaloc property)

P1,693,125.00

Agricultural land with an area of 20,742 sq. m.


located at Laboy, Dipaculao, Aurora

P400,000.00

A parcel of land with an area of 2.5 hectares


located at Maria Aurora, Aurora

P490,000.00

A parcel of land with an area of 175 sq.m.


located at Sabang Baler, Aurora

P175,000.00

3-has. coconut plantation in San Joaquin Maria


Aurora, Aurora

P750,000.00

USA

PROPERTY

FAIR MARKET VALUE

House and Lot at 1155 Hanover Street, Daly


City, California
$550,000.00
(unpaid debt of $285,000.00)
Furniture and furnishings

$3,000

Jewelries (ring and watch)

$9,000

2000 Nissan Frontier 4x4 pickup truck


Bank of America Checking Account

$13,770.00
$8,000

Bank of America Cash Deposit


Life Insurance (Cash Value)

$100,000.00

Retirement, pension, profit-sharing, annuities

$56,228.00

The Sampaloc property used to beowned by Davids parents. The parties herein secured a loan from a bank and
mortgaged the property. When said property was about to be foreclosed, the couple paid a total of P1.5 Million for the
redemption of the same.
Due to business reverses, David left the USA and returned to the Philippines in 2001. In December 2002,Leticia executed
a Special Power of Attorney (SPA) authorizing David to sell the Sampaloc property for P2.2 Million. According to Leticia,
sometime in September 2003, David abandoned his family and lived with Estrellita Martinez in Aurora province. Leticia
claimed that David agreed toand executed a Joint Affidavit with Leticia in the presence of Davids father, Atty. Isaias
Noveras, on 3 December 2003 stating that: 1) the P1.1Million proceeds from the sale of the Sampaloc property shall be
paid to and collected by Leticia; 2) that David shall return and pay to Leticia P750,000.00, which is equivalent to half of the
amount of the redemption price of the Sampaloc property; and 3) that David shall renounce and forfeit all his rights and
interest in the conjugal and real properties situated in the Philippines. David was able to collect P1,790,000.00 from the
sale of the Sampaloc property, leaving an unpaid balance of P410,000.00.
Upon learning that David had an extra-marital affair, Leticia filed a petition for divorce with the Superior Court of California,
County of San Mateo, USA. The California court granted the divorce on 24 June 2005 and judgment was duly entered on
29 June 2005. The California court granted to Leticia the custody of her two children, as well as all the couples properties
in the USA.
On 8 August 2005, Leticia filed a petition for Judicial Separation of Conjugal Property before the RTC of Baler, Aurora.
She relied on the 3 December 2003 Joint Affidavit and Davids failure to comply with his obligation under the same. She
prayed for: 1) the power to administer all conjugal properties in the Philippines; 2) David and his partner to cease and
desist from selling the subject conjugal properties; 3) the declaration that all conjugal properties be forfeited in favor of her
children; 4) David to remit half of the purchase price as share of Leticia from the sale of the Sampaloc property; and 5) the
payment ofP50,000.00 and P100,000.00 litigation expenses.
In his Answer, David stated that a judgment for the dissolution of their marriage was entered on 29 June 2005 by the
Superior Court of California, County of San Mateo. He demanded that the conjugal partnership properties, which also
include the USA properties, be liquidated and that all expenses of liquidation, including attorneys fees of both parties be
charged against the conjugal partnership.
The RTC of Baler, Aurora simplified the issues as follow:
1. Whether or not respondent David A. Noveras committed acts of abandonment and marital infidelity which can
result intothe forfeiture of the parties properties in favor of the petitioner and their two (2) children.
2. Whether or not the Court has jurisdiction over the properties in California, U.S.A. and the same can be included
in the judicial separation prayed for.
3. Whether or not the "Joint Affidavit" x x x executed by petitioner Leticia T. Noveras and respondent David A.
Noveras will amount to a waiver or forfeiture of the latters property rights over their conjugal properties.
4. Whether or not Leticia T. Noveras isentitled to reimbursement of onehalf of the P2.2 [M]illion sales proceeds of
their property in Sampaloc, Manila and one-half of the P1.5 [M]illion used to redeem the property of Atty. Isaias
Noveras, including interests and charges.
5. How the absolute community properties should be distributed.

6. Whether or not the attorneys feesand litigation expenses of the parties were chargeable against their conjugal
properties.
Corollary to the aboveis the issue of:
Whether or not the two common children of the parties are entitled to support and presumptive legitimes.
On 8 December 2006, the RTC rendered judgment as follows:
1. The absolute community of property of the parties is hereby declared DISSOLVED;
2. The net assets of the absolute community of property ofthe parties in the Philippines are hereby ordered to be
awarded to respondent David A. Noveras only, with the properties in the United States of America remaining in the
sole ownership of petitioner Leticia Noveras a.k.a. Leticia Tacbiana pursuant to the divorce decree issuedby the
Superior Court of California, County of San Mateo, United States of America, dissolving the marriage of the
parties as of June 24, 2005. The titles presently covering said properties shall be cancelled and new titles be
issued in the name of the party to whom said properties are awarded;
3. One-half of the properties awarded to respondent David A. Noveras in the preceding paragraph are hereby
given to Jerome and Jena, his two minor children with petitioner LeticiaNoveras a.k.a. Leticia Tacbiana as their
presumptive legitimes and said legitimes must be annotated on the titles covering the said properties.Their share
in the income from these properties shall be remitted to them annually by the respondent within the first half of
January of each year, starting January 2008;
4. One-half of the properties in the United States of America awarded to petitioner Leticia Noveras a.k.a. Leticia
Tacbiana in paragraph 2 are hereby given to Jerome and Jena, her two minor children with respondent David A.
Noveras as their presumptive legitimes and said legitimes must be annotated on the titles/documents covering the
said properties. Their share in the income from these properties, if any, shall be remitted to them annually by the
petitioner within the first half of January of each year, starting January 2008;
5. For the support of their two (2) minor children, Jerome and Jena, respondent David A. Noveras shall give them
US$100.00 as monthly allowance in addition to their income from their presumptive legitimes, while petitioner
Leticia Tacbiana shall take care of their food, clothing, education and other needs while they are in her custody in
the USA. The monthly allowance due from the respondent shall be increased in the future as the needs of the
children require and his financial capacity can afford;
6. Of the unpaid amount of P410,000.00 on the purchase price of the Sampaloc property, the Paringit Spouses
are hereby ordered to pay P5,000.00 to respondent David A. Noveras and P405,000.00 to the two children. The
share of the respondent may be paid to him directly but the share of the two children shall be deposited with a
local bank in Baler, Aurora, in a joint account tobe taken out in their names, withdrawal from which shall only be
made by them or by their representative duly authorized with a Special Power of Attorney. Such payment/deposit
shall be made withinthe period of thirty (30) days after receipt of a copy of this Decision, with the passbook of the
joint account to be submitted to the custody of the Clerk of Court of this Court within the same period. Said
passbook can be withdrawn from the Clerk of Court only by the children or their attorney-in-fact; and
7. The litigation expenses and attorneys fees incurred by the parties shall be shouldered by them individually.
The trial court recognized that since the parties are US citizens, the laws that cover their legal and personalstatus are
those of the USA. With respect to their marriage, the parties are divorced by virtue of the decree of dissolution of their
marriage issued by the Superior Court of California, County of San Mateo on 24June 2005. Under their law, the parties
marriage had already been dissolved. Thus, the trial court considered the petition filed by Leticia as one for liquidation of
the absolute community of property regime with the determination of the legitimes, support and custody of the children,
instead of an action for judicial separation of conjugal property.
With respect to their property relations, the trial court first classified their property regime as absolute community of
property because they did not execute any marriage settlement before the solemnization of their marriage pursuant to
Article 75 of the Family Code. Then, the trial court ruled that in accordance with the doctrine of processual presumption,
Philippine law should apply because the court cannot take judicial notice of the US law since the parties did not submit
any proof of their national law. The trial court held that as the instant petition does not fall under the provisions of the law
for the grant of judicial separation of properties, the absolute community properties cannot beforfeited in favor of Leticia
and her children. Moreover, the trial court observed that Leticia failed to prove abandonment and infidelity with
preponderant evidence.
The trial court however ruled that Leticia is not entitled to the reimbursements she is praying for considering that she
already acquired all of the properties in the USA. Relying still on the principle of equity, the Court also adjudicated the
Philippine properties to David, subject to the payment of the childrens presumptive legitimes. The trial court held that
under Article 89 of the Family Code, the waiver or renunciation made by David of his property rights in the Joint Affidavit is
void.
On appeal, the Court of Appeals modified the trial courts Decision by directing the equal division of the Philippine
properties between the spouses. Moreover with respect to the common childrens presumptive legitime, the appellate
court ordered both spouses to each pay their children the amount of P520,000.00, thus:

WHEREFORE, the instant appeal is PARTLY GRANTED. Numbers 2, 4 and 6 of the assailedDecision dated December 8,
2006 of Branch 96, RTC of Baler, Aurora Province, in Civil Case No. 828 are hereby MODIFIED to read as follows:
2. The net assets of the absolute community of property of the parties in the Philippines are hereby divided
equally between petitioner Leticia Noveras a.k.a. Leticia Tacbiana (sic) and respondent David A. Noveras;
xxx
4. One-half of the properties awarded to petitioner Leticia Tacbiana (sic) in paragraph 2 shall pertain to her minor
children, Jerome and Jena, as their presumptive legitimes which shall be annotated on the titles/documents
covering the said properties. Their share in the income therefrom, if any, shall be remitted to them by petitioner
annually within the first half of January, starting 2008;
xxx
6. Respondent David A. Noveras and petitioner Leticia Tacbiana (sic) are each ordered to pay the amount
ofP520,000.00 to their two children, Jerome and Jena, as their presumptive legitimes from the sale of the
Sampaloc property inclusive of the receivables therefrom, which shall be deposited to a local bank of Baler,
Aurora, under a joint account in the latters names. The payment/deposit shall be made within a period of thirty
(30) days from receipt ofa copy of this Decision and the corresponding passbook entrusted to the custody ofthe
Clerk of Court a quowithin the same period, withdrawable only by the children or their attorney-in-fact.
A number 8 is hereby added, which shall read as follows:
8. Respondent David A. Noveras is hereby ordered to pay petitioner Leticia Tacbiana (sic) the amount
ofP1,040,000.00 representing her share in the proceeds from the sale of the Sampaloc property.
The last paragraph shall read as follows:
Send a copy of this Decision to the local civil registry of Baler, Aurora; the local civil registry of Quezon City; the Civil
RegistrarGeneral, National Statistics Office, Vibal Building, Times Street corner EDSA, Quezon City; the Office of the
Registry of Deeds for the Province of Aurora; and to the children, Jerome Noveras and Jena Noveras.
The rest of the Decision is AFFIRMED.
In the present petition, David insists that the Court of Appeals should have recognized the California Judgment which
awarded the Philippine properties to him because said judgment was part of the pleading presented and offered in
evidence before the trial court. David argues that allowing Leticia to share in the Philippine properties is tantamount to
unjust enrichment in favor of Leticia considering that the latter was already granted all US properties by the California
court.
In summary and review, the basic facts are: David and Leticia are US citizens who own properties in the USA and in the
Philippines. Leticia obtained a decree of divorce from the Superior Court of California in June 2005 wherein the court
awarded all the properties in the USA to Leticia. With respect to their properties in the Philippines, Leticia filed a petition
for judicial separation of conjugal properties.
At the outset, the trial court erred in recognizing the divorce decree which severed the bond of marriage between the
parties. In Corpuz v. Sto. Tomas, we stated that:
The starting point in any recognition of a foreign divorce judgment is the acknowledgment that our courts do not take
judicial notice of foreign judgments and laws. Justice Herrera explained that, as a rule, "no sovereign is bound to give
effect within its dominion to a judgment rendered by a tribunal of another country." This means that the foreign judgment
and its authenticity must beproven as facts under our rules on evidence, together with the aliens applicable national law
to show the effect of the judgment on the alien himself or herself. The recognition may be made in an action instituted
specifically for the purpose or in another action where a party invokes the foreign decree as an integral aspect of his claim
or defense.
The requirements of presenting the foreign divorce decree and the national law of the foreigner must comply with our
Rules of Evidence. Specifically, for Philippine courts to recognize a foreign judgment relating to the status of a marriage, a
copy of the foreign judgment may be admitted in evidence and proven as a fact under Rule 132, Sections 24 and 25, in
relation to Rule 39, Section 48(b) of the Rules of Court.
Under Section 24 of Rule 132, the record of public documents of a sovereign authority or tribunal may be proved by: (1)
an official publication thereof or (2) a copy attested by the officer having the legal custody thereof. Such official publication
or copy must beaccompanied, if the record is not kept in the Philippines, with a certificate that the attesting officer has the
legal custody thereof. The certificate may be issued by any of the authorized Philippine embassy or consular officials
stationed in the foreign country in which the record is kept, and authenticated by the seal of his office. The attestation
must state, in substance, that the copy is a correct copy of the original, or a specific part thereof, asthe case may be, and
must be under the official seal of the attesting officer.
Section 25 of the same Rule states that whenever a copy of a document or record is attested for the purpose of evidence,
the attestation must state, in substance, that the copy is a correct copy of the original, or a specific part thereof, as the
case may be. The attestation must be under the official seal of the attesting officer, if there be any, or if hebe the clerk of a
court having a seal, under the seal of such court.

Based on the records, only the divorce decree was presented in evidence. The required certificates to prove its
authenticity, as well as the pertinent California law on divorce were not presented.
It may be noted that in Bayot v. Court of Appeals, we relaxed the requirement on certification where we held that
"[petitioner therein] was clearly an American citizenwhen she secured the divorce and that divorce is recognized and
allowed in any of the States of the Union, the presentation of a copy of foreign divorce decree duly authenticatedby the
foreign court issuing said decree is, as here, sufficient." In this case however, it appears that there is no seal from the
office where the divorce decree was obtained.
Even if we apply the doctrine of processual presumption as the lower courts did with respect to the property regime of the
parties, the recognition of divorce is entirely a different matter because, to begin with, divorce is not recognized between
Filipino citizens in the Philippines. Absent a valid recognition of the divorce decree, it follows that the parties are still
legally married in the Philippines. The trial court thus erred in proceeding directly to liquidation.
As a general rule, any modification in the marriage settlements must be made before the celebration of marriage. An
exception to this rule is allowed provided that the modification is judicially approved and refers only to the instances
provided in Articles 66,67, 128, 135 and 136 of the Family Code.
Leticia anchored the filing of the instant petition for judicial separation of property on paragraphs 4 and 6 of Article 135 of
the Family Code, to wit:
Art. 135. Any of the following shall be considered sufficient cause for judicial separation of property:
(1) That the spouse of the petitioner has been sentenced to a penalty which carries with it civil interdiction;
(2) That the spouse of the petitioner has been judicially declared an absentee;
(3) That loss of parental authority ofthe spouse of petitioner has been decreed by the court;
(4) That the spouse of the petitioner has abandoned the latter or failed to comply with his or her obligations to the
family as provided for in Article 101;
(5) That the spouse granted the power of administration in the marriage settlements has abused that power; and
(6) That at the time of the petition, the spouses have been separated in fact for at least one year and
reconciliation is highly improbable.
In the cases provided for in Numbers (1), (2), and (3), the presentation of the final judgment against the guiltyor absent
spouse shall be enough basis for the grant of the decree ofjudicial separation of property. (Emphasis supplied).
The trial court had categorically ruled that there was no abandonment in this case to necessitate judicial separation of
properties under paragraph 4 of Article 135 of the Family Code. The trial court ratiocinated:
Moreover, abandonment, under Article 101 of the Family Code quoted above, must be for a valid cause and the spouse is
deemed to have abandoned the other when he/she has left the conjugal dwelling without intention of returning. The
intention of not returning is prima facie presumed if the allegedly [sic] abandoning spouse failed to give any information as
to his or her whereabouts within the period of three months from such abandonment.
In the instant case, the petitioner knows that the respondent has returned to and stayed at his hometown in Maria Aurora,
Philippines, as she even went several times to visit him there after the alleged abandonment. Also, the respondent has
been going back to the USA to visit her and their children until the relations between them worsened. The last visit of said
respondent was in October 2004 when he and the petitioner discussed the filing by the latter of a petition for dissolution of
marriage with the California court. Such turn for the worse of their relationship and the filing of the saidpetition can also be
considered as valid causes for the respondent to stay in the Philippines.
Separation in fact for one year as a ground to grant a judicial separation of property was not tackled in the trial courts
decision because, the trial court erroneously treated the petition as liquidation of the absolute community of properties.
The records of this case are replete with evidence that Leticia and David had indeed separated for more than a year and
that reconciliation is highly improbable. First, while actual abandonment had not been proven, it is undisputed that the
spouses had been living separately since 2003 when David decided to go back to the Philippines to set up his own
business. Second, Leticia heard from her friends that David has been cohabiting with Estrellita Martinez, who represented
herself as Estrellita Noveras. Editha Apolonio, who worked in the hospital where David was once confined, testified that
she saw the name of Estrellita listed as the wife of David in the Consent for Operation form. Third and more significantly,
they had filed for divorce and it was granted by the California court in June 2005.
Having established that Leticia and David had actually separated for at least one year, the petition for judicial separation
of absolute community of property should be granted.
The grant of the judicial separation of the absolute community property automatically dissolves the absolute community
regime, as stated in the 4th paragraph of Article 99 ofthe Family Code, thus:
Art. 99. The absolute community terminates:
(1) Upon the death of either spouse;
(2) When there is a decree of legal separation;
(3) When the marriage is annulled or declared void; or
(4) In case of judicial separation of property during the marriage under Articles 134 to 138. (Emphasis supplied).

Under Article 102 of the same Code, liquidation follows the dissolution of the absolute community regime and the following
procedure should apply:
Art. 102. Upon dissolution of the absolute community regime, the following procedure shall apply:
(1) An inventory shall be prepared, listing separately all the properties of the absolute community and the
exclusive properties of each spouse.
(2) The debts and obligations of the absolute community shall be paid out of its assets. In case of insufficiency of
said assets, the spouses shall be solidarily liable for the unpaid balance with their separate properties in
accordance with the provisions of the second paragraph of Article 94.
(3) Whatever remains of the exclusive properties of the spouses shall thereafter be delivered to each of them.
(4) The net remainder of the properties of the absolute community shall constitute its net assets, which shall be
divided equally between husband and wife, unless a different proportion or division was agreed upon in the
marriage settlements, or unless there has been a voluntary waiver of such share provided in this Code. For
purposes of computing the net profits subject to forfeiture in accordance with Articles 43, No. (2) and 63, No.
(2),the said profits shall be the increase in value between the market value of the community property at the time
of the celebration of the marriage and the market value at the time of its dissolution.
(5) The presumptive legitimes of the common children shall be delivered upon partition, in accordance with Article
51.
(6) Unless otherwise agreed upon by the parties, in the partition of the properties, the conjugal dwelling and the lot
on which it is situated shall be adjudicated tothe spouse with whom the majority of the common children choose to
remain. Children below the age of seven years are deemed to have chosen the mother, unless the court has
decided otherwise. In case there is no such majority, the court shall decide, taking into consideration the best
interests of said children. At the risk of being repetitious, we will not remand the case to the trial court. Instead, we
shall adopt the modifications made by the Court of Appeals on the trial courts Decision with respect to liquidation.
We agree with the appellate court that the Philippine courts did not acquire jurisdiction over the California properties of
David and Leticia. Indeed, Article 16 of the Civil Code clearly states that real property as well as personal property is
subject to the law of the country where it is situated. Thus, liquidation shall only be limited to the Philippine properties.
We affirm the modification made by the Court of Appeals with respect to the share of the spouses in the absolute
community properties in the Philippines, as well as the payment of their childrens presumptive legitimes, which the
appellate court explained in this wise:
Leticia and David shall likewise have an equal share in the proceeds of the Sampaloc property. While both claimed to
have contributed to the redemption of the Noveras property, absent a clear showing where their contributions came from,
the same is presumed to have come from the community property. Thus, Leticia is not entitled to reimbursement of half of
the redemption money.
David's allegation that he used part of the proceeds from the sale of the Sampaloc property for the benefit of the absolute
community cannot be given full credence. Only the amount of P120,000.00 incurred in going to and from the U.S.A. may
be charged thereto. Election expenses in the amount of P300,000.00 when he ran as municipal councilor cannot be
allowed in the absence of receipts or at least the Statement of Contributions and Expenditures required under Section 14
of Republic Act No. 7166 duly received by the Commission on Elections. Likewise, expenses incurred to settle the criminal
case of his personal driver is not deductible as the same had not benefited the family. In sum, Leticia and David shall
share equally in the proceeds of the sale net of the amount of P120,000.00 or in the respective amounts
of P1,040,000.00.
xxxx
Under the first paragraph of Article 888 of the Civil Code, "(t)he legitime of legitimate children and descendants consists of
one-half or the hereditary estate of the father and of the mother." The children arc therefore entitled to half of the share of
each spouse in the net assets of the absolute community, which shall be annotated on the titles/documents covering the
same, as well as to their respective shares in the net proceeds from the sale of the Sampaloc property including the
receivables from Sps. Paringit in the amount of P410,000.00. Consequently, David and Leticia should each pay them the
amount of P520,000.00 as their presumptive legitimes therefrom.
WHEREFORE, the petition is DENIED. The assailed Decision of the Court of Appeals in CA G.R. CV No. 88686 is
AFFIRMED.
SO ORDERED.

[G.R. No. 122749. July 31, 1996]

ANTONIO A. S. VALDES, petitioner, vs. REGIONAL TRIAL COURT, BRANCH 102, QUEZON CITY, and CONSUELO
M. GOMEZ-VALDES,respondents.
DECISION
VITUG, J.:
The petition for review bewails, purely on a question of law, an alleged error committed by the Regional Trial Court in
Civil Case No. Q-92-12539. Petitioner avers that the court a quo has failed to apply the correct law that should govern the
disposition of a family dwelling in a situation where a marriage is declared void ab initio because of psychological
incapacity on the part of either or both of the parties to the contract.
The pertinent facts giving rise to this incident are, by and large, not in dispute.
Antonio Valdes and Consuelo Gomez were married on 05 January 1971. Begotten during the marriage were five
children. In a petition, dated 22 June 1992, Valdes sought the declaration of nullity of the marriage pursuant to Article 36 of
the Family Code (docketed Civil Case No. Q-92-12539, Regional Trial Court of Quezon City, Branch 102). After hearing
the parties following the joinder of issues, the trial court, in its decision of 29 July 1994, granted the petition; viz:
"WHEREFORE, judgment is hereby rendered as follows:
"(1) The marriage of petitioner Antonio Valdes and respondent Consuelo Gomez-Valdes is hereby declared null and void
under Article 36 of the Family Code on the ground of their mutual psychological incapacity to comply with their essential
marital obligations;
"(2) The three older children, Carlos Enrique III, Antonio Quintin and Angela Rosario shall choose which parent they would
want to stay with.
"Stella Eloisa and Joaquin Pedro shall be placed in the custody of their mother, herein respondent Consuelo GomezValdes.
"The petitioner and respondent shall have visitation rights over the children who are in the custody of the other.
"(3) The petitioner and respondent are directed to start proceedings on the liquidation of their common properties as
defined by Article 147 of the Family Code, and to comply with the provisions of Articles 50, 51 and 52 of the same code,
within thirty (30) days from notice of this decision.
"Let a copy of this decision be furnished the Local Civil Registrar of Mandaluyong, Metro Manila, for proper recording in
the registry of marriages." (Italics ours)
Consuelo Gomez sought a clarification of that portion of the decision directing compliance with Articles 50, 51 and 52
of the Family Code. She asserted that the Family Code contained no provisions on the procedure for the liquidation of
common property in "unions without marriage." Parenthetically, during the hearing on the motion, the children filed a joint
affidavit expressing their desire to remain with their father, Antonio Valdes, herein petitioner.
In an Order, dated 05 May 1995, the trial court made the following clarification:
"Consequently, considering that Article 147 of the Family Code explicitly provides that the property acquired by both
parties during their union, in the absence of proof to the contrary, are presumed to have been obtained through the joint
efforts of the parties and will be owned by them in equal shares, plaintiff and defendant will own their 'family home' and all
their other properties for that matter in equal shares.
"In the liquidation and partition of the properties owned in common by the plaintiff and defendant, the provisions on coownership found in the Civil Code shall apply." (Italics supplied)
In addressing specifically the issue regarding the disposition of the family dwelling, the trial court said:
"Considering that this Court has already declared the marriage between petitioner and respondent as null and void ab
initio, pursuant to Art. 147, the property regime of petitioner and respondent shall be governed by the rules on coownership.
"The provisions of Articles 102 and 129 of the Family Code finds no application since Article 102 refers to the procedure
for the liquidation of the conjugal partnership property and Article 129 refers to the procedure for the liquidation of
the absolute community of property."
Petitioner moved for a reconsideration of the order. The motion was denied on 30 October 1995.
In his recourse to this Court, petitioner submits that Articles 50, 51 and 52 of the Family Code should be held
controlling; he argues that:
"I
"Article 147 of the Family Code does not apply to cases where the parties are psychological incapacitated.

"II
"Articles 50, 51 and 52 in relation to Articles 102 and 129 of the Family Code govern the disposition of the family dwelling
in cases where a marriage is declared void ab initio, including a marriage declared void by reason of the psychological
incapacity of the spouses.
"III
"Assuming arguendo that Article 147 applies to marriages declared void ab initio on the ground of the psychological
incapacity of a spouse, the same may be read consistently with Article 129.
"IV
"It is necessary to determine the parent with whom majority of the children wish to stay."
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 andindustry 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 inter vivos his or her share in co-ownership property, without the
consent of the other, during the period of cohabitation; and
(b) In the case of a void marriage, any party in bad faith shall forfeit his or her share in the co-ownership in favor of
their common children; in default thereof or waiver by any or all of the common children, each vacant share shall belong to
the respective surviving descendants, or still in default thereof, to the innocent party. The forfeiture shall take place upon
the termination of the cohabitation or declaration of nullity of the marriage.
When the common-law spouses suffer from a legal impediment to marry or when they do not live exclusively with
each other (as husband and wife ),only the property acquired by both of them through their actual joint contribution of
money, property or industry shall be owned in common and in proportion to their respective contributions. Such
contributions and corresponding shares, however, are prima facie presumed to be equal. The share of any party who is
married to another shall accrue to the absolute community or conjugal partnership, as the case may be, if so existing

under a valid marriage. If the party who has acted in bad faith is not validly married to another, his or her share shall be
forfeited in the manner already heretofore expressed.
In deciding to take further cognizance of the issue on the settlement of the parties' common property, the trial court
acted neither imprudently nor precipitately; a court which has jurisdiction to declare the marriage a nullity must be deemed
likewise clothed with authority to resolve incidental and consequential matters. Nor did it commit a reversible error in ruling
that petitioner and private respondent own the "family home" and all their common property in equal shares, as well as in
concluding that, in the liquidation and partition of the property owned in common by them, the provisions on co-ownership
under the Civil Code, not Articles 50, 51 and 52, in relation to Articles 102 and 129, 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 voidablemarriages 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.
WHEREFORE, the questioned orders, dated 05 May 1995 and 30 October 1995, of the trial court are AFFIRMED. No
costs.
SO ORDERED.

[G.R. No. 127358. March 31, 2005]

NOEL

BUENAVENTURA, petitioner,
BUENAVENTURA, respondents.

vs. COURT

OF

APPEALS

and

ISABEL

LUCIA

SINGH

and

ISABEL

LUCIA

SINGH

[G.R. No. 127449. March 31, 2005]

NOEL

BUENAVENTURA, petitioner,
BUENAVENTURA, respondents.

vs. COURT

OF

APPEALS

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.
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 ofP3,675,335.79 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.
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.
On September 2, 1996, the Court of Appeals issued a Resolution increasing the supportpendente
lite to P20,000. Petitioner filed a motion for reconsideration questioning the said Resolution.
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. 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. Petitioner filed a
Petition for Certiorari to question these two Resolutions.
On July 9, 1997, the Petition for Review on Certiorari and the Petition for Certiorari were ordered consolidated by this
Court.
In the Petition for Review on Certiorari petitioner claims that the Court of Appeals decided the case not in accord with
law and jurisprudence, thus:
1. WHEN IT AWARDED DEFENDANT-APPELLEE MORAL DAMAGES IN THE AMOUNT OF P2.5 MILLION AND
EXEMPLARY DAMAGES OF P1 MILLION, WITH 6% INTEREST FROM THE DATE OF ITS DECISION, WITHOUT ANY
LEGAL AND MORAL BASIS;
2. WHEN IT AWARDED P100,000.00 ATTORNEYS FEES AND P50,000.00 EXPENSES OF LITIGATION, PLUS COSTS,
TO DEFENDANT-APPELLEE, WITHOUT FACTUAL AND LEGAL BASIS;
3. WHEN IT ORDERED PLAINTIFF-APPELLANT NOEL TO PAY DEFENDANT-APPELLEE ONE-HALF
OR P1,837,667.89 OUT OF HIS RETIREMENT BENEFITS RECEIVED FROM THE FAR EAST BANK AND TRUST CO.,
WITH 12% INTEREST THEREON FROM THE DATE OF ITS DECISION, NOTWITHSTANDING THAT SAID
RETIREMENT BENEFITS ARE GRATUITOUS AND EXCLUSIVE PROPERTY OF NOEL, AND ALSO TO DELIVER TO
DEFENDANT-APPELLEE ONE-HALF OF HIS SHARES OF STOCK WITH THE MANILA MEMORIAL PARK AND THE
PROVIDENT GROUP OF COMPANIES, ALTHOUGH SAID SHARES OF STOCK WERE ACQUIRED BY NOEL BEFORE
HIS MARRIAGE TO RESPONDENT ISABEL AND ARE, THEREFORE, AGAIN HIS EXCLUSIVE PROPERTIES; AND
4. WHEN IT AWARDED EXCLUSIVE CARE AND CUSTODY OVER THE PARTIES MINOR CHILD TO DEFENDANTAPPELLEE 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.
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.
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.
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.
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.
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.
The award by the trial court of moral damages is based on Articles 2217 and 21 of the Civil Code, which read as
follows:
ART. 2217. Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation,
wounded feelings, moral shock, social humiliation, and similar injury. Though incapable of pecuniary computation, moral
damages may be recovered if they are the proximate result of the defendants wrongful act or omission.
ART. 21. Any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or
public policy shall compensate the latter for the damage.
The trial court referred to Article 21 because Article 2219 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. . . .

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.
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)
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.
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. S35680 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.
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 plaintiffappellant 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.
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, 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 andindustry shall be governed by the
rules on equal co-ownership. Any property acquired during the union is prima facie presumed to have been obtained
through their joint efforts. A party who did not participate in the acquisition of the property shall still be considered as
having contributed thereto jointly if said party's "efforts consisted in the care and maintenance of the family household."
Unlike the conjugal partnership of gains, the fruits of the couple's separate property are not included in the co-ownership.
Article 147 of the Family Code, in substance and to the above extent, has clarified Article 144 of the Civil Code; in
addition, the law now expressly provides that
(a) Neither party can dispose or encumber by act[s] inter vivos [of] his or her share in co-ownership property, without the
consent of the other, during the period of cohabitation; and
(b) In the case of a void marriage, any party in bad faith shall forfeit his or her share in the co-ownership in favor of their
common children; in default thereof or waiver by any or all of the common children, each vacant share shall belong to the
respective surviving descendants, or still in default thereof, to the innocent party. The forfeiture shall take place upon the
termination of the cohabitation or declaration of nullity of the marriage.
In deciding to take further cognizance of the issue on the settlement of the parties' common property, the trial court acted
neither imprudently nor precipitately; a court which had jurisdiction to declare the marriage a nullity must be deemed
likewise clothed with authority to resolve incidental and consequential matters. Nor did it commit a reversible error in ruling
that petitioner and private respondent own the "family home" and all their common property in equal shares, as well as in
concluding that, in the liquidation and partition of the property owned in common by them, the provisions on co-ownership
under the Civil Code, not Articles 50, 51 and 52, in relation to Articles 102 and 129, of the Family Code, should aptly
prevail. The rules set up to govern the liquidation of either the absolute community or the conjugal partnership of gains,
the property regimes recognized for valid and voidable marriages (in the latter case until the contract is annulled), are
irrelevant to the liquidation of the co-ownership that exists between common-law spouses. The first paragraph of Article 50
of the Family Code, applying paragraphs (2), (3), (4) and (5) of Article 43, relates only, by its explicit terms,
to voidable marriages and, exceptionally, to void marriages under Article 40 of the Code, i.e., the declaration of nullity of a
subsequent marriage contracted by a spouse of a prior void marriage before the latter is judicially declared void. The latter
is a special rule that somehow recognizes the philosophy and an old doctrine that void marriages are inexistent from the
very beginning and no judicial decree is necessary to establish their nullity. In now requiring for purposes of remarriage,
the declaration of nullity by final judgment of the previously contracted void marriage, the present law aims to do away
with any continuing uncertainty on the status of the second marriage. It is not then illogical for the provisions of Article 43,
in relation to Articles 41 and 42, of the Family Code, on the effects of the termination of a subsequent marriage contracted
during the subsistence of a previous marriage to be made applicable pro hac vice. In all other cases, it is not to be
assumed that the law has also meant to have coincident property relations, on the one hand, between spouses in valid
and voidable marriages (before annulment) and, on the other, between common-law spouses or spouses of void
marriages, leaving to ordain, in the latter case, the ordinary rules on co-ownership subject to the provision of Article 147
and Article 148 of the Family Code. It must be stressed, nevertheless, even as it may merely state the obvious, that the
provisions of the Family Code on the "family home," i.e., the provisions found in Title V, Chapter 2, of the Family Code,
remain in force and effect regardless of the property regime of the spouses.
Since the properties ordered to be distributed by the court a quo were found, both by the trial court and the Court of
Appeals, to have been acquired during the union of the parties, the same would be covered by the co-ownership. No fruits
of a separate property of one of the parties appear to have been included or involved in said distribution. The liquidation,
partition and distribution of the properties owned in common by the parties herein as ordered by the court a quo should,
therefore, be sustained, but on the basis of co-ownership and not of the regime of conjugal partnership of gains.
As to the issue on custody of the parties over their only child, Javy Singh Buenaventura, it is now moot since he is
about to turn twenty-five years of age on May 27, 2005 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 onehalf of the retirement benefits of petitioner from Far East Bank and Trust Co. and one-half of petitioners shares of stock in
Manila Memorial Park and in the Provident Group of Companies issustained but on the basis of the liquidation,
partition and distribution of the co-ownership and not of the regime of conjugal partnership of gains . The rest of
said Decision and Resolution are AFFIRMED.
The Petition for Review on Certiorari (G.R. No. 127358) contesting the Court of Appeals Resolutions of September 2,
1996 and November 13, 1996 which increased the supportpendente lite in favor of the parties son, Javy Singh
Buenaventura, is now MOOT and ACADEMIC and is, accordingly, DISMISSED.
No costs.
SO ORDERED.
G.R. No. 146294
July 31, 2006
JOHN ABING, petitioner,
vs.
WAEYAN, respondent.
DECISION
GARCIA, J.:
In this appeal by way of a petition for review under Rule 45 of the Rules of Court, petitioner John Abing (John, hereafter)
seeks to set aside the Decision dated October 24, 2000 of the Court of Appeals (CA) in CA-G.R. SP No. 48675, reversing
that of the Regional Trial Court (RTC) of Benguet, Branch 64, which affirmed an earlier decision of the Municipal Trial
Court (MTC) of Mankayan, Benguet in an ejectment suit thereat commenced by the petitioner against the respondent.
In the main, the controversy is between a man and a woman who, during the good old days, lived together as husband
and wife without the benefit of marriage. During their cohabitation, they acquired properties. Later, they parted ways, and
with it this litigation between them involving one of their common properties.
The facts:
Sometime in 1986, John and respondent WAEYAN (Waeyan, for short) met and fell in love with each other. In time, the
duo cohabited as husband and wife without the benefit of marriage. Together, the couple bought a 2-storey residential
house from one Benjamin Macua which was erected on a lot owned by a certain Alejandro Dio on Aurora Street,
Mankayan, Benguet. Consequent to the purchase, the tax declaration of the 2-storey house was transferred in the name
of Waeyan.
On December 2, 1991, Waeyan left for overseas employment in Korea. She would send money to John who deposited
the same in their joint bank account.
In 1992, the original 2-storey residential house underwent renovation. To it was annexed a new structure which housed
a sari-sari store. This new structure and the sari-sari store thereat are the properties involved in this case.
In 1994, Waeyan returned from Korea and continued to live with John. She managed the sari-sari store while John worked
as a mine employee of the Lepanto Consolidated Mining, Inc.
In 1995, the relationship between the two turned from bad to worse. Hence, they decided to partition their properties. For
the purpose, they executed on October 7, 1995 a Memorandum of Agreement. Unfortunately, the document was left
unsigned by the parties although signed by the witnesses thereto. Under their unsigned agreement, John shall leave the
couples' dwelling with Waeyan paying him the amount of P428,870.00 representing John's share in all their properties. On
the same date October 7, 1995 Waeyan paid John the sum ofP232,397.66 by way of partial payment of his share, with
the balance of P196,472.34 to be paid by Waeyan in twelve monthly installment beginning November 1995.
Waeyan, however, failed to make good the balance. On account thereof, John demanded of her to vacate the annex
structure housing the sari-sari store. Waeyan refused, prompting John to file an ejectment suit against her before the MTC
of Mankayan, Benguet.
In his complaint, John alleged that he alone spent for the construction of the annex structure with his own funds and thru
money he borrowed from his relatives. In fact, he added that the tax declaration for the structure was under his name. On
this premise, John claimed exclusive ownership of the subject structure, which thereby gave him the right to eject Waeyan
therefrom upon the latter's failure to pay the agreed balance due him under the aforementioned Memorandum of
Agreement.
In her answer, Waeyan countered that their original house was renovated thru their common funds and that the subject
structure annexed thereto was merely an attachment or an extension of their original residential house, hence the same
pertained to the two of them in common.
In a decision dated March 15, 1997, the MTC, on its finding that the money used in the construction of the structure in
question solely came from John, ruled that the same exclusively pertained to the latter, and accordingly ordered Waeyan's
eviction therefrom, including the sari-sari store thereat, and required her to surrender possession thereof to John, thus:
WHEREFORE, judgment is rendered in favor of the plaintiff (John) and against the defendant (Waeyan).

Defendant is hereby ordered to vacate the premises of the store in litigation covered by Tax Declaration No. 96001-00445 in the name of the Plaintiff and turn over possession thereof to the latter.
Defendant is hereby further ordered to pay the Plaintiff the sum of P2,500.00 a month from the time she withheld
possession of the store in litigation in June 1996 until she vacates the same and turn over possession thereof to
the Plaintiff.
Defendant is finally ordered, to pay the sum of P5,000.00 to the Plaintiff by way of Attorney's fees; and to pay the
costs.
SO ORDERED.
On Waeyan's appeal to the RTC, the latter, in its decision of July 29, 1995, affirmed that of the MTC. Undaunted, Waeyan
then went to the CA in CA-G.R. SP No. 48675.
As stated at the threshold hereof, the CA, in its Decision of October 24, 2000, reversed that of the RTC, to wit:
WHEREFORE, the petition is GRANTED. The assailed decision of the Regional Trial Court is hereby reversed
and set aside. Petitioner, WAEYAN is entitled to possess the property and maintain therein her business.
SO ORDERED.
Partly says the CA in its reversal disposition:
It is undisputed that the parties lived together as husband and wife without the benefit of marriage from 1986 to
1995 and that they acquired certain properties which must be divided between them upon the termination of their
common law relationship.
xxx
xxx
xxx
. . . their property relations cannot be governed by the provision of the Civil Code on conjugal partnership... but by
the rule on co-ownership.
xxx
xxx
xxx
. . . the parties' share in respect of the properties they have accumulated during their cohabitation shall be equal
unless there is proof to the contrary.
To the CA, John's evidence failed to establish that he alone spent for the construction of the annex structure. Hence, the
same pertained to both, and being a co-owner herself, Waeyan cannot be evicted therefrom, adding that if ever, John's
cause of action should have been for a sum of money "because he claims that Waeyan still owes him the payment for the
extension." According to the CA, ejectment cannot lie against Waeyan because Waeyan's possession of the premises in
dispute was not by virtue of a contract, express or implied, nor did she obtain such possession thru force, intimidation,
threat, strategy or stealth.
Hence, John's present recourse, submitting that the CA erred in
1. not giving effect to the parties' Memorandum of Agreement which should have been binding between them
albeit unsigned by both;
2. in holding that the subject premises (annex structure housing the sari-sari store) is owned by the two of them in
common;
3. in ruling that the parties should settle their common properties in a separate action for partition even as the
community character of the subject premises has not been proven.
We AFFIRM with modification.
Essentially, the issues raised center on the core question of whether or not the property subject of the suit pertains to the
exclusive ownership of petitioner, John. Departing from the factual findings of the two courts before it, the CA found that
the premises in dispute is owned in common by Waeyan and John, the latter having failed to establish by the required
quantum of proof that the money spent for the construction thereof solely came from him. Being a co-owner of the same
structure, Waeyan may not be ejected therefrom.
While the question raised is essentially one of fact, of which the Court normally eschews from, yet, given the conflicting
factual findings of the three courts below, the Court shall go by the exception to the general rule and proceed to make its
own assessment of the evidence.
First and foremost, it is undisputed that the parties hereto lived together as husband and wife from 1986 to 1995 without
the benefit of marriage. Neither is it disputed that sometime in December 1991, Waeyan left for Korea and worked thereat,
sending money to John which the latter deposited in their joint account. In fact, Waeyan was still in Korea when the annex
structure was constructed in 1992.
Other than John's bare allegation that he alone, thru his own funds and money he borrowed from his relatives, spent for
the construction of the annex structure, evidence is wanting to support such naked claim. For sure, John even failed to
reveal how much he spent therefor. Neither did he divulge the names of the alleged relatives from whom he made his
borrowings, let alone the amount of money he borrowed from them. All that petitioner could offer by way of reinforcing his
claim of spending his own funds and borrowed money in putting up the subject structure was the affidavit executed by a
certain Manuel Macaraeg to the effect that petitioner borrowedP30,000.00 from him. Even then, Macaraeg stated in his
affidavit that it was sometime in 1990 when John borrowed said amount from him. With the petitioner's own admission that

the subject structure was constructed only in 1992, or two years after he borrowed P30,000.00 from Macaraeg, it is even
doubtful whether the amount he allegedly borrowed from the latter went into the construction of the structure in dispute.
More, it is noted that while petitioner was able to present in evidence the Macaraeg affidavit, he failed to introduce similar
affidavits, if any, of his close relatives from whom he claimed to have made similar borrowings. For sure, not a single
relative came forward to confirm petitioner's tale. In short, there is a paucity of evidence, testimonial or documentary, to
support petitioner's self-serving allegation that the annex structure which housed the sari-sari store was put up thru his
own funds and/or money borrowed by him. Sure, petitioner has in his favor the tax declaration covering the subject
structure. We have, however, ruled time and again that tax declarations do not prove ownership but at best an indicia of
claims of ownership. Payment of taxes is not proof of ownership, any more than indicating possession in the concept of an
owner. Neither tax receipts nor declaration of ownership for taxation purposes are evidence of ownership or of the right to
possess realty when not supported by other effective proofs.
In this connection, Article 147 of the Family Code is instructive. It reads:
Art. 147. When a man and a woman who are capacitated to marry each other, live exclusively with each other as
husband and wife without the benefit of marriage or under a void marriage, their wages and salaries shall be
owned by them in equal shares and the property acquired by both of them through their work or industry shall be
governed by the rules on co-ownership.
In the absence of proof to the contrary, properties acquired while they lived together shall be presumed to have
been obtained by their joint efforts, work or industry, and shall be owned by them in equal shares. For purposes of
this Article, a party who did not participate in the acquisition by other party of any property shall be deemed to
have contributed jointly in the acquisition thereof if the former's efforts consisted in the care and maintenance of
the family and of the household.
The law is clear. In the absence, as here, of proofs to the contrary, any property acquired by common-law spouses during
their period of cohabitation is presumed to have been obtained thru their joint efforts and is owned by them in equal
shares. Their property relationship is governed by the rules on co-ownership. And under this regime, they owned their
properties in common "in equal shares." Being herself a co-owner of the structure in question, Waeyan, as correctly ruled
by the CA, may not be ejected therefrom.
True it is that under Article 487 of the Civil Code, a co-owner may bring an action for ejectment against a co-owner who
takes exclusive possession and asserts exclusive ownership of a common property. It bears stressing, however, that in
this case, evidence is totally wanting to establish John's or Waeyan's exclusive ownership of the property in question.
Neither did Waeyan obtain possession thereof by virtue of a contract, express or implied, or thru intimidation, threat,
strategy or stealth. As borne by the record, Waeyan was in possession of the subject structure and the sari-sari store
thereat by virtue of her being a co-owner thereof. As such, she is as much entitled to enjoy its possession and ownership
as John.
We, however, disagree with the ruling of the CA that the subject Memorandum of Agreement, being unsigned by Waeyan
and John, has no binding effect between them.
It is a matter of record that pursuant to said Agreement, Waeyan did pay John the amount of P232,397.66, as initial
payment for John's share in their common properties, with the balance of P196,472.34 payable in twelve monthly
installments beginning November 1995. It is also a matter of record that the Agreement was signed by the witnesses
thereto. Hence, the irrelevant circumstances that the Agreement was left unsigned by Waeyan and John cannot adversely
affect its binding force or effect between them, as evidently, Waeyan's initial payment ofP232,397.66 to John was in
fulfillment of what the parties had agreed upon thereunder. However, and as correctly held by the CA, Waeyan's failure to
pay John the balance of the latter's share in their common properties could at best give rise to an action for a sum of
money against Waeyan, or for rescission of the said agreement and not for ejectment.
WHEREFORE, the petition is DENIED and the assailed CA Decision is AFFIRMED, except that portion thereof denying
effect to the parties' Memorandum of Agreement for being unsigned by both.
Costs against petitioner.
SO ORDERED.
G.R. No. 163744
February 29, 2008
METROPOLITAN BANK AND TRUST CO., petitioner,
vs.
NICHOLSON PASCUAL a.k.a. NELSON PASCUAL, respondent.
DECISION
VELASCO, JR., J.:
Respondent Nicholson Pascual and Florencia Nevalga were married on January 19, 1985. During the union, Florencia
bought from spouses Clarito and Belen Sering a 250-square meter lot with a three-door apartment standing thereon
located in Makati City. Subsequently, Transfer Certificate of Title (TCT) No. S-101473/T-510 covering the purchased lot
was canceled and, in lieu thereof, TCT No. 156283 of the Registry of Deeds of Makati City was issued in the name of
Florencia, "married to Nelson Pascual" a.k.a. Nicholson Pascual.

In 1994, Florencia filed a suit for the declaration of nullity of marriage under Article 36 of the Family Code, docketed as
Civil Case No. Q-95-23533. After trial, the Regional Trial Court (RTC), Branch 94 in Quezon City rendered, on July 31,
1995, a Decision, declaring the marriage of Nicholson and Florencia null and void on the ground of psychological
incapacity on the part of Nicholson. In the same decision, the RTC, inter alia, ordered the dissolution and liquidation of the
ex-spouses conjugal partnership of gains. Subsequent events saw the couple going their separate ways without
liquidating their conjugal partnership.
On April 30, 1997, Florencia, together with spouses Norberto and Elvira Oliveros, obtained a PhP 58 million loan from
petitioner Metropolitan Bank and Trust Co. (Metrobank). To secure the obligation, Florencia and the spouses Oliveros
executed several real estate mortgages (REMs) on their properties, including one involving the lot covered by TCT No.
156283. Among the documents Florencia submitted to procure the loan were a copy of TCT No. 156283, a photocopy of
the marriage-nullifying RTC decision, and a document denominated as "Waiver" that Nicholson purportedly executed on
April 9, 1995. The waiver, made in favor of Florencia, covered the conjugal properties of the ex-spouses listed therein, but
did not incidentally include the lot in question.
Due to the failure of Florencia and the spouses Oliveros to pay their loan obligation when it fell due, Metrobank, on
November 29, 1999, initiated foreclosure proceedings under Act No. 3135, as amended, before the Office of the Notary
Public of Makati City. Subsequently, Metrobank caused the publication of the notice of sale on three issues of Remate. At
the auction sale on January 21, 2000, Metrobank emerged as the highest bidder.
Getting wind of the foreclosure proceedings, Nicholson filed on June 28, 2000, before the RTC in Makati City, a Complaint
to declare the nullity of the mortgage of the disputed property, docketed as Civil Case No. 00-789 and eventually raffled to
Branch 65 of the court. In it, Nicholson alleged that the property, which is still conjugal property, was mortgaged without
his consent.
Metrobank, in its Answer with Counterclaim and Cross-Claim, alleged that the disputed lot, being registered in Florencias
name, was paraphernal. Metrobank also asserted having approved the mortgage in good faith.
Florencia did not file an answer within the reglementary period and, hence, was subsequently declared in default.
The RTC Declared the REM Invalid
After trial on the merits, the RTC rendered, on September 24, 2001, judgment finding for Nicholson. The falloreads:
PREMISES CONSIDERED, the Court renders judgment declaring the real estate mortgage on the property
covered by [TCT] No. 156283 of the Registry of Deeds for the City of Makati as well as all proceedings thereon
null and void.
The Court further orders defendants [Metrobank and Florencia] jointly and severally to pay plaintiff [Nicholson]:
1. PhP100,000.00 by way of moral damages;
2. PhP75,000.00 by way of attorneys fees; and
3. The costs.
SO ORDERED.
Even as it declared the invalidity of the mortgage, the trial court found the said lot to be conjugal, the same having been
acquired during the existence of the marriage of Nicholson and Florencia. In so ruling, the RTC invoked Art. 116 of the
Family Code, providing that "all property acquired during the marriage, whether the acquisition appears to have been
made, contracted or registered in the name of one or both spouses, is presumed to be conjugal unless the contrary is
proved." To the trial court, Metrobank had not overcome the presumptive conjugal nature of the lot. And being conjugal,
the RTC concluded that the disputed property may not be validly encumbered by Florencia without Nicholsons consent.
The RTC also found the deed of waiver Florencia submitted to Metrobank to be fatally defective. For let alone the fact that
Nicholson denied executing the same and that the signature of the notarizing officer was a forgery, the waiver document
was allegedly executed on April 9, 1995 or a little over three months before the issuance of the RTC decision declaring the
nullity of marriage between Nicholson and Florencia.
The trial court also declared Metrobank as a mortgagee in bad faith on account of negligence, stating the observation that
certain data appeared in the supporting contract documents, which, if properly scrutinized, would have put the bank on
guard against approving the mortgage. Among the data referred to was the date of execution of the deed of waiver.
The RTC dismissed Metrobanks counterclaim and cross-claim against the ex-spouses.
Metrobanks motion for reconsideration was denied. Undeterred, Metrobank appealed to the Court of Appeals (CA), the
appeal docketed as CA-G.R. CV No. 74874.
The CA Affirmed with Modification the RTCs Decision
On January 28, 2004, the CA rendered a Decision affirmatory of that of the RTC, except for the award therein of moral
damages and attorneys fees which the CA ordered deleted. The dispositive portion of the CAs Decision reads:
WHEREFORE, premises considered, the appealed decision is hereby AFFIRMED WITH MODIFICATION with
respect to the award of moral damages and attorneys fees which is hereby DELETED.
SO ORDERED.

Like the RTC earlier held, the CA ruled that Metrobank failed to overthrow the presumption established in Art. 116 of the
Family Code. And also decreed as going against Metrobank was Florencias failure to comply with the prescriptions of the
succeeding Art. 124 of the Code on the disposition of conjugal partnership property. Art. 124 states:
Art. 124. The administration and enjoyment of the conjugal partnership property shall belong to both spouses
jointly. In case of disagreement, the husbands decision shall prevail, subject to recourse to the court by the wife
for proper remedy x x x.
In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the
conjugal properties, the other spouse may assume sole powers of administration. These powers do not include
disposition or encumbrance without authority of the court or written consent of the other spouse. In the absence of
such authority or consent, the disposition or encumbrance shall be void. However, the transaction shall be
construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected
as a binding contract upon the acceptance by the other spouse or authorization by the court before the offer is
withdrawn by either or both offerors.
As to the deletion of the award of moral damages and attorneys fees, the CA, in gist, held that Metrobank did not enter
into the mortgage contract out of ill-will or for some fraudulent purpose, moral obliquity, or like dishonest considerations as
to justify damages.
Metrobank moved but was denied reconsideration by the CA.
Thus, Metrobank filed this Petition for Review on Certiorari under Rule 45, raising the following issues for consideration:
a. Whether or not the [CA] erred in declaring subject property as conjugal by applying Article 116 of the Family
Code.
b. Whether or not the [CA] erred in not holding that the declaration of nullity of marriage between the respondent
Nicholson Pascual and Florencia Nevalga ipso facto dissolved the regime of community of property of the
spouses.
c. Whether or not the [CA] erred in ruling that the petitioner is an innocent purchaser for value.
Our Ruling
A modification of the CAs Decision is in order.
The Disputed Property is Conjugal
It is Metrobanks threshold posture that Art. 160 of the Civil Code providing that "[a]ll property of the marriage is presumed
to belong to the conjugal partnership, unless it be prove[n] that it pertains exclusively to the husband or to the wife,"
applies. To Metrobank, Art. 116 of the Family Code could not be of governing application inasmuch as Nicholson and
Florencia contracted marriage before the effectivity of the Family Code on August 3, 1988. Citing Manongsong v.
Estimo, Metrobank asserts that the presumption of conjugal ownership under Art. 160 of the Civil Code applies when
there is proof that the property was acquired during the marriage. Metrobank adds, however, that for the presumption of
conjugal ownership to operate, evidence must be adduced to prove that not only was the property acquired during the
marriage but that conjugal funds were used for the acquisition, a burden Nicholson allegedly failed to discharge.
To bolster its thesis on the paraphernal nature of the disputed property, Metrobank cites Francisco v. Court of
Appeals and Jocson v. Court of Appeals, among other cases, where this Court held that a property registered in the name
of a certain person with a description of being married is no proof that the property was acquired during the spouses
marriage.
On the other hand, Nicholson, banking on De Leon v. Rehabilitation Finance Corporation and Wong v. IAC,contends that
Metrobank failed to overcome the legal presumption that the disputed property is conjugal. He asserts that Metrobanks
arguments on the matter of presumption are misleading as only one postulate needs to be shown for the presumption in
favor of conjugal ownership to arise, that is, the fact of acquisition during marriage. Nicholson dismisses, as
inapplicable, Francisco and Jocson, noting that they are relevant only when there is no indication as to the exact date of
acquisition of the property alleged to be conjugal.
As a final point, Nicholson invites attention to the fact that Metrobank had virtually recognized the conjugal nature of the
property in at least three instances. The first was when the bank lumped him with Florencia in Civil Case No. 00-789 as
co-mortgagors and when they were referred to as "spouses" in the petition for extrajudicial foreclosure of mortgage. Then
came the published notice of foreclosure sale where Nicholson was again designated as co-mortgagor. And third, in its
demand-letter to vacate the disputed lot, Metrobank addressed Nicholson and Florencia as "spouses," albeit the finality of
the decree of nullity of marriage between them had long set in.
We find for Nicholson.
First, while Metrobank is correct in saying that Art. 160 of the Civil Code, not Art. 116 of the Family Code, is the applicable
legal provision since the property was acquired prior to the enactment of the Family Code, it errs in its theory that, before
conjugal ownership could be legally presumed, there must be a showing that the property was acquired during
marriage using conjugal funds. Contrary to Metrobanks submission, the Court did not, inManongsong, add the matter of
the use of conjugal funds as an essential requirement for the presumption of conjugal ownership to arise. Nicholson is
correct in pointing out that only proof of acquisition during the marriage is needed to raise the presumption that the

property is conjugal. Indeed, if proof on the use of conjugal funds is still required as a necessary condition before the
presumption can arise, then the legal presumption set forth in the law would veritably be a superfluity. As we stressed
in Castro v. Miat:
Petitioners also overlook Article 160 of the New Civil Code. It provides that "all property of the marriage is
presumed to be conjugal partnership, unless it be prove[n] that it pertains exclusively to the husband or to the
wife." This article does not require proof that the property was acquired with funds of the partnership. The
presumption applies even when the manner in which the property was acquired does not appear. (Emphasis
supplied.)
Second, Francisco and Jocson do not reinforce Metrobanks theory. Metrobank would thrust on the Court, invoking the
two cases, the argument that the registration of the property in the name of "Florencia Nevalga, married to Nelson
Pascual" operates to describe only the marital status of the title holder, but not as proof that the property was acquired
during the existence of the marriage.
Metrobank is wrong. As Nicholson aptly points out, if proof obtains on the acquisition of the property during the existence
of the marriage, then the presumption of conjugal ownership applies. The correct lesson of Franciscoand Jocson is that
proof of acquisition during the marital coverture is a condition sine qua non for the operation of the presumption in favor of
conjugal ownership. When there is no showing as to when the property was acquired by the spouse, the fact that a title is
in the name of the spouse is an indication that the property belongs exclusively to said spouse.
The Court, to be sure, has taken stock of Nicholsons arguments regarding Metrobank having implicitly acknowledged,
thus being in virtual estoppel to question, the conjugal ownership of the disputed lot, the bank having named the former in
the foreclosure proceedings below as either the spouse of Florencia or her co-mortgagor. It is felt, however, that there is
no compelling reason to delve into the matter of estoppel, the same having been raised only for the first time in this
petition. Besides, however Nicholson was designated below does not really change, one way or another, the classification
of the lot in question.
Termination of Conjugal Property Regime does
not ipso facto End the Nature of Conjugal Ownership
Metrobank next maintains that, contrary to the CAs holding, Art. 129 of the Family Code is inapplicable. Art. 129 in part
reads:
Art. 129. Upon the dissolution of the conjugal partnership regime, the following procedure shall apply:
xxxx
(7) The net remainder of the conjugal partnership properties shall constitute the profits, which shall be divided
equally between husband and wife, unless a different proportion or division was agreed upon in the marriage
settlements or unless there has been a voluntary waiver or forfeiture of such share as provided in this Code.
Apropos the aforequoted provision, Metrobank asserts that the waiver executed by Nicholson, effected as it were
before the dissolution of the conjugal property regime, vested on Florencia full ownership of all the properties
acquired during the marriage.
Nicholson counters that the mere declaration of nullity of marriage, without more, does not automatically result in a regime
of complete separation when it is shown that there was no liquidation of the conjugal assets.
We again find for Nicholson.
While the declared nullity of marriage of Nicholson and Florencia severed their marital bond and dissolved the conjugal
partnership, the character of the properties acquired before such declaration continues to subsist as conjugal properties
until and after the liquidation and partition of the partnership. This conclusion holds true whether we apply Art. 129 of the
Family Code on liquidation of the conjugal partnerships assets and liabilities which is generally prospective in application,
or Section 7, Chapter 4, Title IV, Book I (Arts. 179 to 185) of the Civil Code on the subject, Conjugal Partnership of Gains.
For, the relevant provisions of both Codes first require the liquidation of the conjugal properties before a regime of
separation of property reigns.
In Dael v. Intermediate Appellate Court, we ruled that pending its liquidation following its dissolution, the conjugal
partnership of gains is converted into an implied ordinary co-ownership among the surviving spouse and the other heirs of
the deceased.
In this pre-liquidation scenario, Art. 493 of the Civil Code shall govern the property relationship between the former
spouses, where:
Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he
may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when
personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners,
shall be limited to the portion which may be allotted to him in the division upon the termination of the coownership. (Emphasis supplied.)
In the case at bar, Florencia constituted the mortgage on the disputed lot on April 30, 1997, or a little less than two years
after the dissolution of the conjugal partnership on July 31, 1995, but before the liquidation of the partnership. Be that as it
may, what governed the property relations of the former spouses when the mortgage was given is the aforequoted Art.

493. Under it, Florencia has the right to mortgage or even sell her one-half (1/2) undivided interest in the disputed property
even without the consent of Nicholson. However, the rights of Metrobank, as mortgagee, are limited only to the 1/2
undivided portion that Florencia owned. Accordingly, the mortgage contract insofar as it covered the remaining 1/2
undivided portion of the lot is null and void, Nicholson not having consented to the mortgage of his undivided half.
The conclusion would have, however, been different if Nicholson indeed duly waived his share in the conjugal partnership.
But, as found by the courts a quo, the April 9, 1995 deed of waiver allegedly executed by Nicholson three months prior to
the dissolution of the marriage and the conjugal partnership of gains on July 31, 1995 bore his forged signature, not to
mention that of the notarizing officer. A spurious deed of waiver does not transfer any right at all, albeit it may become the
root of a valid title in the hands of an innocent buyer for value.
Upon the foregoing perspective, Metrobanks right, as mortgagee and as the successful bidder at the auction of the lot, is
confined only to the 1/2 undivided portion thereof heretofore pertaining in ownership to Florencia. The other undivided half
belongs to Nicholson. As owner pro indiviso of a portion of the lot in question, Metrobank may ask for the partition of the
lot and its property rights "shall be limited to the portion which may be allotted to [the bank] in the division upon the
termination of the co-ownership." This disposition is in line with the well-established principle that the binding force of a
contract must be recognized as far as it is legally possible to do soquando res non valet ut ago, valeat quantum valere
potest.
In view of our resolution on the validity of the auction of the lot in favor of Metrobank, there is hardly a need to discuss at
length whether or not Metrobank was a mortgagee in good faith. Suffice it to state for the nonce that where the mortgagee
is a banking institution, the general rule that a purchaser or mortgagee of the land need not look beyond the four corners
of the title is inapplicable. Unlike private individuals, it behooves banks to exercise greater care and due diligence before
entering into a mortgage contract. The ascertainment of the status or condition of the property offered as security and the
validity of the mortgagors title must be standard and indispensable part of the banks operation. A bank that failed to
observe due diligence cannot be accorded the status of a bona fide mortgagee, as here.
But as found by the CA, however, Metrobanks failure to comply with the due diligence requirement was not the result of a
dishonest purpose, some moral obliquity or breach of a known duty for some interest or ill-will that partakes of fraud that
would justify damages.
WHEREFORE, the petition is PARTLY GRANTED. The appealed Decision of the CA dated January 28, 2004, upholding
with modification the Decision of the RTC, Branch 65 in Makati City, in Civil Case No. 00-789, isAFFIRMED with
the MODIFICATION that the REM over the lot covered by TCT No. 156283 of the Registry of Deeds of Makati City is
hereby declared valid only insofar as the pro indiviso share of Florencia thereon is concerned.
As modified, the Decision of the RTC shall read:
PREMISES CONSIDERED, the real estate mortgage on the property covered by TCT No. 156283 of the Registry of
Deeds of Makati City and all proceedings thereon are NULL and VOID with respect to the undivided 1/2 portion of the
disputed property owned by Nicholson, but VALID with respect to the other undivided 1/2 portion belonging to Florencia.
The claims of Nicholson for moral damages and attorneys fees are DENIED for lack of merit.
No pronouncement as to costs.
SO ORDERED.
ALAIN M. DIO , G.R. No. 178044
Petitioner,
Present:

CARPIO, J., Chairperson,


- versus - NACHURA,
PERALTA,
ABAD, and
MENDOZA, JJ.
MA. CARIDAD L. DIO, Promulgated:
Respondent. January 19, 2011
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

DECISION

CARPIO, J.:

The Case

Before the Court is a petition for review assailing the 18 October 2006 Decision and the 12 March 2007 Order of the
Regional Trial Court of Las Pias City, Branch 254 (trial court) in Civil Case No. LP-01-0149.

The Antecedent Facts

Alain M. Dio (petitioner) and Ma. Caridad L. Dio (respondent) were childhood friends and sweethearts. They started
living together in 1984 until they decided to separate in 1994. In 1996, petitioner and respondent decided to live together
again. On 14 January 1998, they were married before Mayor Vergel Aguilar of Las Pias City.

On 30 May 2001, petitioner filed an action for Declaration of Nullity of Marriage against respondent, citing psychological
incapacity under Article 36 of the Family Code. Petitioner alleged that respondent failed in her marital obligation to give
love and support to him, and had abandoned her responsibility to the family, choosing instead to go on shopping sprees
and gallivanting with her friends that depleted the family assets. Petitioner further alleged that respondent was not faithful,
and would at times become violent and hurt him.

Extrajudicial service of summons was effected upon respondent who, at the time of the filing of the petition, was already
living in the United States of America. Despite receipt of the summons, respondent did not file an answer to the petition
within the reglementary period. Petitioner later learned that respondent filed a petition for divorce/dissolution of her
marriage with petitioner, which was granted by the Superior Court of California on 25 May 2001. Petitioner also learned
that on 5 October 2001, respondent married a certain Manuel V.Alcantara.

On 30 April 2002, the Office of the Las Pias prosecutor found that there were no indicative facts of collusion between the
parties and the case was set for trial on the merits.

Dr. Nedy L. Tayag (Dr. Tayag), a clinical psychologist, submitted a psychological report establishing that respondent was
suffering from Narcissistic Personality Disorder which was deeply ingrained in her system since her early formative years.
Dr. Tayag found that respondents disorder was long-lasting and by nature, incurable.
In its 18 October 2006 Decision, the trial court granted the petition on the ground that respondent was
psychologically incapacited to comply with the essential marital obligations at the time of the celebration of the marriage.

The Decision of the Trial Court

The trial court ruled that based on the evidence presented, petitioner was able to establish respondents psychological
incapacity. The trial court ruled that even without Dr. Tayagspsychological report, the allegations in the complaint,
substantiated in the witness stand, clearly made out a case of psychological incapacity against respondent. The trial court
found that respondent committed acts which hurt and embarrassed petitioner and the rest of the family, and that
respondent failed to observe mutual love, respect and fidelity required of her under Article 68 of the Family Code. The trial
court also ruled that respondent abandoned petitioner when she obtained a divorce abroad and married another man.

The dispositive portion of the trial courts decision reads:

WHEREFORE, in view of the foregoing, judgment is hereby rendered:

1.

Declaring the marriage between plaintiff ALAIN M. DIO and defendant MA. CARIDAD L. DIO
on January 14, 1998, and all its effects under the law, as NULL and VOID from the beginning; and
2.
Dissolving the regime of absolute community of property.

A DECREE OF ABSOLUTE NULLITY OF MARRIAGE shall only be issued upon compliance with Article[s] 50 and
51 of the Family Code.

Let copies of this Decision be furnished the parties, the Office of the Solicitor General, Office of the City
Prosecutor, Las Pias City and the Office of the Local Civil Registrar of Las Pias City, for their information and
guidance.

SO ORDERED.
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.

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 Marriages (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. 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, 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 coownership 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.
3.

They live exclusively with each other as husband and wife; and
Their union is without the benefit of marriage, or their marriage is void.

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.

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
ultimatesuccessional rights of the children accruing upon the death of either or both of the parents; but the value

of the properties already received under the decree of annulment or absolute nullity shall be considered as
advances on their legitime.

It is clear from Article 50 of the Family Code that Section 19(1) of the Rule applies only to marriages which are declared
void ab initio or annulled by final judgment under Articles 40 and 45 of the Family Code. In short, Article 50 of the
Family Code does not apply to marriages which are declared void ab initio under Article 36 of the Family Code, which
should be declared void without waiting for the liquidation of the properties of the parties.

Article 40 of the Family Code contemplates a situation where a second or bigamous marriage was contracted. Under
Article 40, [t]he absolute nullity of a previous marriage may be invoked for purposes of remarriage on the basis solely of a
final judgment declaring such previous marriage void. Thus we ruled:

x x x where the absolute nullity of a previous marriage is sought to be invoked for purposes of contracting a
second marriage, the sole basis acceptable in law, for said projected marriage to be free from legal infirmity, is a
final judgment declaring a previous marriage void.
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. In both instances under Articles 40
and 45, the marriages are governed either by absolute community of property or conjugal partnership of gains 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 36 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. 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 MODIFICATIONthat the decree of absolute nullity of
the marriage shall be issued upon finality of the trial courts decision without waiting for the liquidation, partition, and
distribution of the parties properties under Article 147 of the Family Code.
SO ORDERED.
G.R. No. 202370
September 23, 2013
JUAN SEVILLA SALAS, JR., Petitioner,
vs.
EDEN VILLENA AGUILA, Respondent.
DECISION
CARPIO, J.:
The Case
This petition for review on certiorari assails the 16 March 2012 Decision and the 28 June 2012 Resolution of the Court of
Appeals (CA) in CA-G.R. CV No. 95322. The CA affirmed the 26 September 2008 Order of the Regional Trial Court of
Nasugbu, Batangas, Branch 14 (RTC), in Civil Case No. 787.
The Facts

On 7 September 1985, petitioner Juan Sevilla Salas, Jr. (Salas) and respondent Eden Villena Aguila (Aguila) were
married. On 7 June 1986, Aguila gave birth to their daughter, Joan Jiselle. Five months later, Salas left their conjugal
dwelling. Since then, he no longer communicated with Aguila or their daughter.
On 7 October 2003, Aguila filed a Petition for Declaration of Nullity of Marriage (petition) citing psychological incapacity
under Article 36 of the Family Code. The petition states that they "have no conjugal properties whatsoever." In the Return
of Summons dated 13 October 2003, the sheriff narrated that Salas instructed his mother Luisa Salas to receive the copy
of summons and the petition.
On 7 May 2007, the RTC rendered a Decision declaring the nullity of the marriage of Salas and Aguila (RTC Decision).
The RTC Decision further provides for the "dissolution of their conjugal partnership of gains, if any."
On 10 September 2007, Aguila filed a Manifestation and Motion stating that she discovered: (a) two 200-square-meter
parcels of land with improvements located in San Bartolome, Quezon City, covered by Transfer Certificate of Title (TCT)
No. N-259299-A and TCT No. N-255497; and (b) a 108-square-meter parcel of land with improvement located in Tondo,
Manila, covered by TCT No. 243373 (collectively, "Discovered Properties"). The registered owner of the Discovered
Properties is "Petitioner, married to Rubina C. Salas." The manifestation was set for hearing on 21 September 2007.
However, Salas notice of hearing was returned unserved with the remark, "RTS Refused To Receive."
On 19 September 2007, Salas filed a Manifestation with Entry of Appearance requesting for an Entry of Judgment of the
RTC Decision since no motion for reconsideration or appeal was filed and no conjugal property was involved.
On 21 September 2007, the hearing for Aguilas manifestation ensued, with Aguila, her counsel and the state prosecutor
present. During the hearing, Aguila testified that on 17 April 2007 someone informed her of the existence of the
Discovered Properties. Thereafter, she verified the information and secured copies of TCTs of the Discovered Properties.
When asked to clarify, Aguila testified that Rubina C. Salas (Rubina) is Salas common-law wife.
On 8 February 2008, Salas filed an Opposition to the Manifestation alleging that there is no conjugal property to be
partitioned based on Aguilas petition. According to Salas, Aguilas statement was a judicial admission and was not made
through palpable mistake. Salas claimed that Aguila waived her right to the Discovered Properties. Salas likewise
enumerated properties he allegedly waived in favor of Aguila, to wit:(1) parcels of land with improvements located in
Sugar Landing Subdivision, Alangilan, Batangas City; No. 176 Brias Street, Nasugbu, Batangas; P. Samaniego Street,
Silangan, Nasugbu, Batangas; and Batangas City, financed by Filinvest; (2) cash amounting to P200,000.00; and (3)
motor vehicles, specifically Honda City and Toyota Tamaraw FX(collectively, "Waived Properties"). Thus, Salas contended
that the conjugal properties were deemed partitioned.
The Ruling of the Regional Trial Court
In its 26 September 2008 Order, the RTC ruled in favor of Aguila. The dispositive portion of the Order reads:
WHEREFORE, foregoing premises being considered, the petitioner and the respondent are hereby directed to partition
between themselves by proper instruments of conveyance, the following properties, without prejudice to the legitime of
their legitimate child, Joan Jisselle Aguila Salas:
(1) A parcel of land registered in the name of Juan S. Salas married to Rubina C. Salas located in San Bartolome,
Quezon City and covered by TCT No. N-259299-A marked as Exhibit "A" and its improvements;
(2) A parcel of land registered in the name of Juan S.Salas married to Rubina C. Salas located in San Bartolome,
Quezon City and covered by TCT No. N-255497 marked as Exhibit "B" and its improvements;
(3) A parcel of land registered in the name of Juan S.Salas married to Rubina Cortez Salas located in Tondo and
covered by TCT No. 243373-Ind. marked as Exhibit "D" and its improvements.
Thereafter, the Court shall confirm the partition so agreed upon bythe parties, and such partition, together with the Order
of the Court confirming the same, shall be recorded in the Registry of Deeds of the place in which the property is situated.
SO ORDERED.
The RTC held that pursuant to the Rules, even upon entry of judgment granting the annulment of marriage, the court can
proceed with the liquidation, partition and distribution of the conjugal partnership of gains if it has not been judicially
adjudicated upon, as in this case. The RTC found that the Discovered Properties are among the conjugal properties to be
partitioned and distributed between Salas and Aguila. However, the RTC held that Salas failed to prove the existence of
the Waived Properties.
On 11 November 2008, Rubina filed a Complaint-in-Intervention, claiming that: (1) she is Rubina Cortez, a widow and
unmarried to Salas; (2) the Discovered Properties are her paraphernal properties; (3) Salas did not contribute money to
purchase the Discovered Properties as he had no permanent job in Japan; (4) the RTC did not acquire jurisdiction over
her as she was not a party in the case; and (5) she authorized her brother to purchase the Discovered Properties but
because he was not well-versed with legal documentation, he registered the properties in the name of "Juan S. Salas,
married to Rubina C. Salas."
In its 16 December 2009 Order, the RTC denied the Motion for Reconsideration filed by Salas. The RTC found that Salas
failed to prove his allegation that Aguila transferred the Waived Properties to third persons. The RTC emphasized that it
cannot go beyond the TCTs, which state that Salas is the registered owner of the Discovered Properties. The RTC further
held that Salas and Rubina were at fault for failing to correct the TCTs, if they were not married as they claimed.

Hence, Salas filed an appeal with the CA.


The Ruling of the Court of Appeals
On 16 March 2012, the CA affirmed the order of the RTC. The CA ruled that Aguilas statement in her petition is not a
judicial admission. The CA pointed out that the petition was filed on 7 October 2003, but Aguila found the Discovered
Properties only on 17 April 2007 or before the promulgation of the RTC decision. Thus, the CA concluded that Aguila was
palpably mistaken in her petition and it would be unfair to punish her over a matter that she had no knowledge of at the
time she made the admission. The CA also ruled that Salas was not deprived of the opportunity to refute Aguilas
allegations in her manifestation, even though he was not present in its hearing. The CA likewise held that Rubina cannot
collaterally attack a certificate of title.
In a Resolution dated 28 June 2012, the CA denied the Motion for Reconsideration filed by Salas. Hence, this petition.
The Issues
Salas seeks a reversal and raises the following issues for resolution:
1. The Court of Appeals erred in affirming the trial courts decision ordering the partition of the parcels of land
covered by TCT Nos. N-259299-A and N-255497 in Quezon City and as well as the property in Manila covered by
TCT No. 243373 between petitioner and respondent.
2. The Court of Appeals erred in affirming the trial courts decision in not allowing Rubina C. Cortez to intervene in
this case
The Ruling of the Court
The petition lacks merit.
Since the original manifestation was an action for partition, this Court cannot order a division of the property, unless it first
makes a determination as to the existence of a co-ownership. Thus, the settlement of the issue of ownership is the first
stage in this action.
Basic is the rule that the party making an allegation in a civil case has the burden of proving it by a preponderance of
evidence. Salas alleged that contrary to Aguilas petition stating that they had no conjugal property, they actually acquired
the Waived Properties during their marriage. However, the RTC found, and the CA affirmed, that Salas failed to prove the
existence and acquisition of the Waived Properties during their marriage:
A perusal of the record shows that the documents submitted by [Salas] as the properties allegedly registered in the name
of [Aguila] are merely photocopies and not certified true copies, hence, this Court cannot admit the same as part of the
records of this case. These are the following:
(1) TCT No. T-65876 a parcel of land located at Poblacion, Nasugbu, Batangas, registered in the name of Eden
A. Salas, married to Juan Salas Jr. which is cancelled by TCT No. T-105443 in the name of Joan Jiselle A. Salas,
single;
(2) TCT No. T-68066 a parcel of land situated in the Barrio of Landing, Nasugbu, Batangas, registered in the
name of Eden A. Salas, married to Juan S. Salas Jr.
Moreover, [Aguila] submitted original copy of Certification issued by Ms. Erlinda A. Dasal, Municipal Assessor of Nasugbu,
Batangas, certifying that [Aguila] has no real property (land and improvement) listed in the Assessment Roll for taxation
purposes, as of September 17, 2008.
Such evidence, in the absence of proof to the contrary, has the presumption of regularity. x x x.
Suffice it to say that such real properties are existing and registered in the name of [Aguila], certified true copies thereof
should have been the ones submitted to this Court. Moreover, there is also a presumption that properties registered in the
Registry of Deeds are also declared in the Assessment Roll for taxation purposes.
On the other hand, Aguila proved that the Discovered Properties were acquired by Salas during their marriage.Both the
RTC and the CA agreed that the Discovered Properties registered in Salas name were acquired during his marriage with
Aguila. The TCTs of the Discovered Properties were entered on 2 July 1999 and 29 September 2003, or during the validity
of Salas and Aguilas marriage. In Villanueva v. Court of Appeals, we held that the question of whether the properties were
acquired during the marriage is a factual issue. Factual findings of the RTC, particularly if affirmed by the CA, are binding
on us, except under compelling circumstances not present in this case.
On Salas allegation that he was not accorded due process for failing to attend the hearing of Aguilas manifestation, we
find the allegation untenable. The essence of due process is opportunity to be heard. We hold that Salas was given such
opportunity when he filed his opposition to the manifestation, submitted evidence and filed his appeal.
On both Salas and Rubinas contention that Rubina owns the Discovered Properties, we likewise find the contention
unmeritorious. The TCTs state that "Juan S. Salas, married to Rubina C. Salas" is the registered owner of the Discovered
Properties. A Torrens title is generally a conclusive evidence of the ownership of the land referred to, because there is a
strong presumption that it is valid and regularly issued. The phrase "married to" is merely descriptive of the civil status of
the registered owner. Furthermore, Salas did not initially dispute the ownership of the Discovered Properties in his
opposition to the manifestation. It was only when Rubina intervened that Salas supported Rubinas statement that she
owns the Discovered Properties.

Considering that Rubina failed to prove her title or her legal interest in the Discovered Properties, she has no right to
intervene in this case. The Rules of Court provide that only "a person who has a legal interest in the matter in litigation, or
in the success of either of the parties, or an interest against both, or is so situated as to be adversely affected by a
distribution or other disposition of property in the custody of the court or of an officer thereof may, with leave of court, be
allowed to intervene in the action."
In Dio v. Dio, we held that Article 147 of the Family Code applies to the union of parties who are legally capacitated and
not barred by any impediment to contract marriage, but whose marriage is nonetheless declared void under Article 36 of
the Family Code, as in this case. Article147 of the Family Code provides:
ART. 147. When a man and a woman who are capacitated to marry each other, live exclusively with each other as
husband and wife without the benefit of marriage or under a void marriage, their wages and salaries shall be owned by
them in equal shares and the property acquired by both of them through their work or industry shall be governed by the
rules on co-ownership.
In the absence of proof to the contrary, properties acquired while they lived together shall be presumed to have been
obtained by their joint efforts, work or industry, and shall be owned by them in equal shares. For purposes of this Article, a
party who did not participate in the acquisition by the other party of any property shall be deemed to have contributed
jointly in the acquisition thereof if the formers efforts consisted in the care and maintenance of the family and of the
household.
Neither party can encumber or dispose by acts inter vivos of his or her share in the property acquired during cohabitation
and owned in common, without the consent of the other, until after the termination of their cohabitation.
When only one of the parties to a void marriage is in good faith, the share of the party in bad faith in the co-ownership
shall be forfeited in favor of their common children. In case of default of or waiver by any or all of the common children or
their descendants, each vacant share shall belong to the respective surviving descendants. In the absence of
descendants, such share shall belong to the innocent party. In all cases, the forfeiture shall take place upon termination of
the cohabitation. (Emphasis supplied)
Under this property regime, property acquired during the marriage is prima facie presumed to have been obtained through
the couples joint efforts and governed by the rules on co-ownership. In the present case, Salas did not rebut this
presumption. In a similar case where the ground for nullity of marriage was also psychological incapacity, we held that the
properties acquired during the union of the parties, as found by both the RTC and the CA, would be governed by coownership. Accordingly, the partition of the Discovered Properties as ordered by the RTC and the CA should be sustained,
but on the basis of co-ownership and not on the regime of conjugal partnership of gains.
WHEREFORE, we DENY the petition. We AFFIRM the Decision dated March 2012 and the Resolution dated 28 June
2012 of the Court of Appeals in CA-G.R. CV No. 95322.
SO ORDERED.
G.R. No. 202932, October 23, 2013
EDILBERTO U. VENTURA, JR., Petitioner, v. SPOUSES PAULINO AND EVANGELINE ABUDA,Respondents.
DECISION
CARPIO, J.:
The Case
This petition for review on certiorari seeks to annul the Decision dated 9 March 2012 of the Court of Appeals (CA) in CAG.R. CV No. 92330 and the Resolution dated 3 August 2012 denying the motion for reconsideration. The Decision and
Resolution dismissed the Appeal dated 23 October 2009 and affirmed with modification the Decision dated 24 November
2008 of the Regional Trial Court of Manila, Branch 32 (RTC Manila).
The Facts
The RTC-Manila and the CA found the facts to be as follows:
Socorro Torres (Socorro) and Esteban Abletes (Esteban) were married on 9 June 1980. Although Socorro and Esteban
never had common children, both of them had children from prior marriages: Esteban had a daughter named Evangeline
Abuda (Evangeline), and Socorro had a son, who was the father of Edilberto U. Ventura, Jr. (Edilberto), the petitioner in
this case.
Evidence shows that Socorro had a prior subsisting marriage to Crispin Roxas (Crispin) when she married Esteban.
Socorro married Crispin on 18 April 1952. This marriage was not annulled, and Crispin was alive at the time of Socorros
marriage to Esteban.
Estebans prior marriage, on the other hand, was dissolved by virtue of his wifes death in 1960.

According to Edilberto, sometime in 1968, Esteban purchased a portion of a lot situated at 2492 State Alley, Bonifacio
Street, Vitas, Tondo, Manila (Vitas property). The remaining portion was thereafter purchased by Evangeline on her
fathers behalf sometime in 1970. The Vitas property was covered by Transfer Certificate of Title No. 141782, dated 11
December 1980, issued to Esteban Abletes, of legal age, Filipino, married to Socorro Torres.
Edilberto also claimed that starting 1978, Evangeline and Esteban operated small business establishments located at 903
and 905 Delpan Street, Tondo, Manila (Delpan property).
On 6 September 1997, Esteban sold the Vitas and Delpan properties to Evangeline and her husband, Paulino Abuda
(Paulino). According to Edilberto:
[w]hen Esteban was diagnosed with colon cancer sometime in 1993, he decided to sell the Delpan and Vitas properties to
Evangeline. Evangeline continued paying the amortizations on the two (2) properties situated in Delpan Street. The
amortizations, together with the amount of Two Hundred Thousand Pesos (Php 200,000.00), which Esteban requested as
advance payment, were considered part of the purchase price of the Delpan properties. Evangeline likewise gave her
father Fifty Thousand Pesos (Php 50,000.00) for the purchase of the Vitas properties and [she] shouldered his medical
expenses.
Esteban passed away on 11 September 1997, while Socorro passed away on 31 July 1999.
Sometime in 2000, Leonora Urquila (Leonora), the mother of Edilberto, discovered the sale. Thus, Edilberto, represented
by Leonora, filed a Petition for Annulment of Deeds of Sale before the RTC-Manila. Edilberto alleged that the sale of the
properties was fraudulent because Estebans signature on the deeds of sale was forged. Respondents, on the other hand,
argued that because of Socorros prior marriage to Crispin, her subsequent marriage to Esteban was null and void. Thus,
neither Socorro nor her heirs can claim any right or interest over the properties purchased by Esteban and respondents.
The Ruling of the RTC-Manila
The RTC-Manila dismissed the petition for lack of merit.
The RTC-Manila ruled that the marriage between Socorro and Esteban was void from the beginning.10 Article 83 of the
Civil Code, which was the governing law at the time Esteban and Socorro were married, provides:
Art. 83. Any marriage subsequently contracted by any person during the lifetime of the first spouse of such person shall be
illegal and void from its performance unless:
1. The first marriage was annulled or dissolved; or
2. The first spouse had been absent for seven consecutive years at the time of the second marriage without the spouse
present having news of the absentee being alive, or if the absentee, though he has been absent for less than seven
years, is generally considered as dead and believed to be so by the spouse present at the time of contracting such
subsequent marriage, or if the absentee is presumed dead according to articles 390 and 391. The marriage so contracted
shall be valid in any of the three cases until declared null and void.
During trial, Edilberto offered the testimony of Socorros daughter- in-law Conchita Ventura (Conchita). In her first affidavit,
Conchita claimed that Crispin, who was a seaman, had been missing and unheard from for 35 years. However, Conchita
recanted her earlier testimony and executed an Affidavit of Retraction.
The RTC-Manila ruled that the lack of a judicial decree of nullity does not affect the status of the union. It applied our
ruling in Nial v. Badayog:
Jurisprudence under the Civil Code states that no judicial decree is necessary in order to establish the nullity of a
marriage. x x x
Under ordinary circumstances, the effect of a void marriage, so far as concerns the conferring of legal rights upon the
parties, is as though no marriage had ever taken place. And therefore, being good for no legal purpose, its invalidity can
be maintained in any proceeding in which [the] fact of marriage may be material, either direct or collateral, in any civil
court between any parties at any time, whether before or after the death of either or both the husband and the wife, and
upon mere proof of the facts rendering such marriage void, it will be disregarded or treated as non- existent by the courts.

According to the RTC-Manila, the Vitas and Delpan properties are not conjugal, and are governed by Articles 144 and 485
of the Civil Code, to wit:
Art. 144. When a man and a woman live together as husband and wife, but they are not married, or their marriage is void
from the beginning, the property acquired by either or both of them through their work or industry or their wages and
salaries shall be governed by the rules on co-ownership.
Art. 485. The share of the co-owners, in the benefits as well as in the charges, shall be proportional to their respective
interests. Any stipulation in a contract to the contrary shall be void.
The portions belonging to the co-owners in the co-ownership shall be presumed equal, unless the contrary is proved.
The RTC-Manila then determined the respective shares of Socorro and Esteban in the properties. It found that:
[w]ith respect to the property located at 2492 State Alley, Bonifacio St. Vitas, Tondo, Manila covered by TCT No. 141782,
formerly Marcos Road, Magsaysay Village, Tondo, Manila, [Evangeline] declared that part of it was first acquired by [her]
father Esteban Abletes sometime in 1968 when he purchased the right of Ampiano Caballegan. Then, in 1970, she x x x
bought the right to one-half of the remaining property occupied by Ampiano Caballegan. However, during the survey of the
National Housing Authority, she allowed the whole lot [to be] registered in her fathers name. As proof thereof, she
presented Exhibits 8 to 11 x x x. [These documents prove that] that she has been an occupant of the said property in
Vitas, Tondo even before her father and Socorro Torres got married in June, 1980.
Anent the parcels of land and improvements thereon 903 and 905 Del Pan Street, Tondo, Manila, x x x Evangeline
professed that in 1978, before [her] father met Socorro Torres and before the construction of the BLISS Project thereat,
[her] father [already had] a bodega of canvas (lona) and a sewing machine to sew the canvas being sold at 903 Del Pan
Street, Tondo Manila. In 1978, she was also operating Vangies Canvas Store at 905 Del Pan [Street], Tondo, Manila,
which was evidenced by Certificate of Registration of Business Name issued in her favor on 09 November 1998 x x x.
When the BLISS project was constructed in 1980, [the property] became known as Unit[s] D-9 and D-10. At first, [her]
father [paid] for the amortizations [for] these two (2) parcels of land but when he got sick [with] colon cancer in 1993, he
asked [respondents] to continue paying for the amortizations x x x. [Evangeline] paid a total of P195,259.52 for Unit D-9
as shown by the 37 pieces of receipts x x x and the aggregate amount of P188,596.09 for Unit D-10, [as evidenced by] 36
receipts x x x.
The RTC-Manila concluded that Socorro did not contribute any funds for the acquisition of the properties. Hence, she
cannot be considered a co- owner, and her heirs cannot claim any rights over the Vitas and Delpan properties.
Aggrieved, Edilberto filed an appeal before the CA.
The Ruling of the CA
In its Decision dated 9 March 2012, the CA sustained the decision of the RTC-Manila. The dispositive portion of the CA
Decision reads:
WHEREFORE, the Appeal is hereby DENIED and the challenged Decision of the court a quoSTANDS.
SO ORDERED.
The CA ruled, however, that the RTC-Manila should have applied Article 148 of the Family Code, and not Articles 144 and
485 of the Civil Code. Article 148 of the Family Code states that in unions between a man and a woman who are
incapacitated to marry each other:
x x x only the properties acquired by both of the parties through their actual joint contribution of money, property, or
industry shall be owned by them in common in proportion to their respective contributions. In the absence of proof to the
contrary, their contributions and corresponding shares are presumed to be equal. The same rule and presumption shall
apply to joint deposits of money and evidences of credit.
If one of the parties is validly married to another, his or her share in the co-ownership shall accrue to the absolute
community or conjugal partnership existing in such valid marriage. If the party who acted in bad faith is not validly married
to another, his or her share shall be forfeited in the manner provided in the last paragraph of the preceding Article.

The foregoing rules on forfeiture shall likewise apply even if both parties are in bad faith.
The CA applied our ruling in Saguid v. Court of Appeals, and held that the foregoing provision applies even if the
cohabitation or the acquisition of the property occurred before the [effectivity] of the Family Code. The CA found that
Edilberto failed to prove that Socorro contributed to the purchase of the Vitas and Delpan properties. Edilberto was unable
to provide any documentation evidencing Socorros alleged contribution.
On 2 April 2012, Edilberto filed a Motion for Reconsideration, which was denied by the CA in its Resolution dated 3 August
2012.
Hence, this petition.
The Ruling of this Court
We deny the petition.
Edilberto admitted that in unions between a man and a woman who are incapacitated to marry each other, the ownership
over the properties acquired during the subsistence of that relationship shall be based on the actual contribution of the
parties. He even quoted our ruling in Borromeo v. Descallar in his petition:
It is necessary for each of the partners to prove his or her actual contribution to the acquisition of property in order to be
able to lay claim to any portion of it. Presumptions of co-ownership and equal contribution do not apply.
This is a reiteration of Article 148 of the Family Code, which the CA applied in the assailed decision:
Art 148. In cases of cohabitation [wherein the parties are incapacitated to marry each other], only the properties acquired
by both of the parties through their actual joint contribution of money, property, or industry shall be owned by them in
common in proportion to their respective contributions. In the absence of proof to the contrary, their contributions and
corresponding shares are presumed to be equal. The same rule and presumption shall apply to joint deposits of money
and evidences of credit.
If one of the parties is validly married to another, his or her share in the co-ownership shall accrue to the absolute
community or conjugal partnership existing in such valid marriage. If the party who acted in bad faith is not validly married
to another, his or her share shall be forfeited in the manner provided in the last paragraph of the preceding Article.
The foregoing rules on forfeiture shall likewise apply even if both parties are in bad faith.
Applying the foregoing provision, the Vitas and Delpan properties can be considered common property if: (1) these were
acquired during the cohabitation of Esteban and Socorro; and (2) there is evidence that the properties were acquired
through the parties actual joint contribution of money, property, or industry.
Edilberto argues that the certificate of title covering the Vitas property shows that the parcel of land is co-owned by
Esteban and Socorro because: (1) the Transfer Certificate of Title was issued on 11 December 1980, or several months
after the parties were married; and (2) title to the land was issued to Esteban Abletes, of legal age, married to Socorro
Torres.
We disagree. The title itself shows that the Vitas property is owned by Esteban alone. The phrase married to Socorro
Torres is merely descriptive of his civil status, and does not show that Socorro co-owned the property. The evidence on
record also shows that Esteban acquired ownership over the Vitas property prior to his marriage to Socorro, even if the
certificate of title was issued after the celebration of the marriage. Registration under the Torrens title system merely
confirms, and does not vest title. This was admitted by Edilberto on page 9 of his petition wherein he quotes an excerpt of
our ruling inBorromeo:
[R]egistration is not a mode of acquiring ownership. It is only a means of confirming the fact of its existence with notice to
the world at large. Certificates of title are not a source of right. The mere possession of a title does not make one the true
owner of the property. Thus, the mere fact that respondent has the titles of the disputed properties in her name does not
necessarily, conclusively and absolutely make her the owner. The rule on indefeasibility of title likewise does not apply to
respondent. A certificate of title implies that the title is quiet, and that it is perfect, absolute and indefeasible. However,
there are well-defined exceptions to this rule, as when the transferee is not a holder in good faith and did not acquire the
subject properties for a valuable consideration.

Edilberto claims that Esteban's actual contribution to the purchase of the Delpan property was not sufficiently proven since
Evangeline shouldered some of the amortizations. Thus, the law presumes that Esteban and Socorro jointly contributed
to the acquisition of the Del pan property.
We cannot sustain Edilberto's claim. Both the RTC-Manila and the CA found that the Delpan property was acquired prior
to the marriage of Esteban and Socorro. Furthermore, even if payment of the purchase price of the Delpan property was
made by Evangeline, such payment was made on behalf of her father. Article 1238 of the Civil Code provides:
Art. 1238. Payment made by a third person who does not intend to be reimbursed by the debtor is deemed to be a
donation, which requires the debtor's consent. But the payment is in any case valid as to the creditor who has accepted it.
Thus, it is clear that Evangeline paid on behalf of her father, and the parties intended that the Delpan property would be
owned by and registered under the name of Esteban.
During trial, the Abuda spouses presented receipts evidencing payments of the amortizations for the Delpan property. On
the other hand, Edilberto failed to show any evidence showing Socorro's alleged monetary contributions. As correctly
pointed out by the CA:
[s]ettled is the rule that in civil cases x x x the burden of proof rests upon the party who, as determined by the pleadings or
the nature of the case, asserts the affirmative of an issue. x x x. Here it is Appellant who is duty bound to prove the
allegations in the complaint which undoubtedly, he miserably failed to do so.
WHEREFORE, the petition is DENIED. The Decision dated 9 March 2012 of the Court of Appeals in CA-G.R. CV No.
92330 is AFFIRMED.
SO ORDERED.
ERLINDA A. AGAPAY, petitioner,
CRUZ, respondents.

[G.R. No. 116668. July 28, 1997]


vs. CARLINA (CORNELIA) V. PALANG

and

HERMINIA

P.

DELA

DECISION
ROMERO, J.:
Before us is a petition for review of the decision of the Court of Appeals in CA-G.R. CV No. 24199 entitled Erlinda
Agapay v. Carlina (Cornelia) Palang and Herminia P. Dela Cruz dated June 22, 1994 involving the ownership of two
parcels of land acquired during the cohabitation of petitioner and private respondents legitimate spouse.
Miguel Palang contracted his first marriage on July 16, 1949 when he took private respondent Carlina (or Cornelia)
Vallesterol as a wife at the Pozorrubio Roman Catholic Church in Pangasinan. A few months after the wedding, in October
1949, he left to work in Hawaii.Miguel and Carlinas only child, Herminia Palang, was born on May 12, 1950.
Miguel returned in 1954 for a year. His next visit to the Philippines was in 1964 and during the entire duration of his
year-long sojourn he stayed in Zambales with his brother, not in Pangasinan with his wife and child. The trial court found
evidence that as early as 1957, Miguel had attempted to divorce Carlina in Hawaii. When he returned for good in 1972, he
refused to live with private respondents, but stayed alone in a house in Pozorrubio, Pangasinan.
On July 15, 1973, the then sixty-three-year-old Miguel contracted his second marriage with nineteen-year-old Erlinda
Agapay, herein petitioner. Two months earlier, on May 17, 1973, Miguel and Erlinda, as evidenced by the Deed of Sale,
jointly purchased a parcel of agricultural land located at San Felipe, Binalonan, Pangasinan with an area of 10,080 square
meters. Consequently, Transfer Certificate of Title No. 101736 covering said rice land was issued in their names.
A house and lot in Binalonan, Pangasinan was likewise purchased on September 23, 1975, allegedly by Erlinda as
the sole vendee. TCT No. 143120 covering said property was later issued in her name.
On October 30, 1975, Miguel and Cornelia Palang executed a Deed of Donation as a form of compromise agreement
to settle and end a case filed by the latter. The parties therein agreed to donate their conjugal property consisting of six
parcels of land to their only child, Herminia Palang.
Miguel and Erlindas cohabitation produced a son, Kristopher A. Palang, born on December 6, 1977. In 1979, Miguel
and Erlinda were convicted of Concubinage upon Carlinas complaint. Two years later, on February 15, 1981, Miguel died.
On July 11, 1981, Carlina Palang and her daughter Herminia Palang de la Cruz, herein private respondents,
instituted the case at bar, an action for recovery of ownership and possession with damages against petitioner before the
Regional Trial Court in Urdaneta, Pangasinan (Civil Case No. U-4265). Private respondents sought to get back the

riceland and the house and lot both located at Binalonan, Pangasinan allegedly purchased by Miguel during his
cohabitation with petitioner.
Petitioner, as defendant below, contended that while the riceland covered by TCT No. 101736 is registered in their
names (Miguel and Erlinda), she had already given her half of the property to their son Kristopher Palang. She added that
the house and lot covered by TCT No. 143120 is her sole property, having bought the same with her own money. Erlinda
added that Carlina is precluded from claiming aforesaid properties since the latter had already donated their conjugal
estate to Herminia.
After trial on the merits, the lower court rendered its decision on June 30, 1989 dismissing the complaint after
declaring that there was little evidence to prove that the subject properties pertained to the conjugal property of Carlina
and Miguel Palang. The lower court went on to provide for the intestate shares of the parties, particularly of Kristopher
Palang, Miguels illegitimate son. The dispositive portion of the decision reads:
WHEREFORE, premises considered, judgment is hereby rendered1) Dismissing the complaint, with costs against plaintiffs;
2) Confirming the ownership of defendant Erlinda Agapay of the residential lot located at Poblacion, Binalonan,
Pangasinan, as evidenced by TCT No. 143120, Lot 290-B including the old house standing therein;
3) Confirming the ownership of one-half (1/2) portion of that piece of agricultural land situated at Balisa, San Felipe,
Binalonan, Pangasinan, consisting of 10,080 square meters and as evidenced by TCT No. 101736, Lot 1123-A to Erlinda
Agapay;
4) Adjudicating to Kristopher Palang as his inheritance from his deceased father, Miguel Palang, the one-half (1/2) of the
agricultural land situated at Balisa, San Felipe, Binalonan, Pangasinan, under TCT No. 101736 in the name of Miguel
Palang, provided that the former (Kristopher) executes, within 15 days after this decision becomes final and executory, a
quit-claim forever renouncing any claims to annul/reduce the donation to Herminia Palang de la Cruz of all conjugal
properties of her parents, Miguel Palang and Carlina Vallesterol Palang, dated October 30, 1975, otherwise, the estate of
deceased Miguel Palang will have to be settled in another separate action;
5) No pronouncement as to damages and attorneys fees.
SO ORDERED.
On appeal, respondent court reversed the trial courts decision. The Court of Appeals rendered its decision on July
22, 1994 with the following dispositive portion:
WHEREFORE, PREMISES CONSIDERED, the appealed decision is hereby REVERSED and another one entered:
1. Declaring plaintiffs-appellants the owners of the properties in question;
2. Ordering defendant-appellee to vacate and deliver the properties in question to herein plaintiffs-appellants;
3. Ordering the Register of Deeds of Pangasinan to cancel Transfer Certificate of Title Nos. 143120 and 101736 and to
issue in lieu thereof another certificate of title in the name of plaintiffs-appellants.
No pronouncement as to costs.
Hence, this petition.
Petitioner claims that the Court of Appeals erred in not sustaining the validity of two deeds of absolute sale covering
the riceland and the house and lot, the first in favor of Miguel Palang and Erlinda Agapay and the second, in favor of
Erlinda Agapay alone. Second, petitioner contends that respondent appellate court erred in not declaring Kristopher A.
Palang as Miguel Palangs illegitimate son and thus entitled to inherit from Miguels estate. Third, respondent court erred,
according to petitioner, in not finding that there is sufficient pleading and evidence that Kristoffer A. Palang or Christopher
A. Palang should be considered as party-defendant in Civil Case No. U-4625 before the trial court and in CA-G.R. No.
24199.
After studying the merits of the instant case, as well as the pertinent provisions of law and jurisprudence, the Court
denies the petition and affirms the questioned decision of the Court of Appeals.
The first and principal issue is the ownership of the two pieces of property subject of this action. Petitioner assails the
validity of the deeds of conveyance over the same parcels of land.There is no dispute that the transfers of ownership from
the original owners of the riceland and the house and lot, Corazon Ilomin and the spouses Cespedes, respectively, were
valid.
The sale of the riceland on May 17, 1973, was made in favor of Miguel and Erlinda. The provision of law applicable
here is Article 148 of the Family Code providing for cases of cohabitation when a man and a woman who
are not capacitated to marry each other live exclusively with each other as husband and wife without the benefit of
marriage or under a void marriage. While Miguel and Erlinda contracted marriage on July 15, 1973, said union was
patently void because the earlier marriage of Miguel and Carlina was still susbsisting and unaffected by the latters de
facto separation.

Under Article 148, only the properties acquired by both of the parties through their actual joint contribution of
money, property or industry shall be owned by them in common in proportion to their respective contributions. It must
be stressed that actual contribution is required by this provision, in contrast to Article 147 which states that efforts in the
care and maintenance of the family and household, are regarded as contributions to the acquisition of common property
by one who has no salary or income or work or industry. If the actual contribution of the party is not proved, there will be
no co-ownership and no presumption of equal shares.
In the case at bar, Erlinda tried to establish by her testimony that she is engaged in the business of buy and sell and
had a sari-sari store but failed to persuade us that she actually contributed money to buy the subject riceland. Worth
noting is the fact that on the date of conveyance, May 17, 1973, petitioner was only around twenty years of age and
Miguel Palang was already sixty-four and a pensioner of the U.S. Government. Considering her youthfulness, it is
unrealistic to conclude that in 1973 she contributed P3,750.00 as her share in the purchase price of subject property, there
being no proof of the same.
Petitioner now claims that the riceland was bought two months before Miguel and Erlinda actually cohabited. In the
nature of an afterthought, said added assertion was intended to exclude their case from the operation of Article 148 of the
Family Code. Proof of the precise date when they commenced their adulterous cohabitation not having been adduced, we
cannot state definitively that the riceland was purchased even before they started living together. In any case, even
assuming that the subject property was bought before cohabitation, the rules of co-ownership would still apply and proof
of actual contribution would still be essential.
Since petitioner failed to prove that she contributed money to the purchase price of the riceland in Binalonan,
Pangasinan, we find no basis to justify her co-ownership with Miguel over the same. Consequently, the riceland should, as
correctly held by the Court of Appeals, revert to the conjugal partnership property of the deceased Miguel and private
respondent Carlina Palang.
Furthermore, it is immaterial that Miguel and Carlina previously agreed to donate their conjugal property in favor of
their daughter Herminia in 1975. The trial court erred in holding that the decision adopting their compromise agreement in
effect partakes the nature of judicial confirmation of the separation of property between spouses and the termination of the
conjugal partnership. Separation of property between spouses during the marriage shall not take place except by judicial
order or without judicial conferment when there is an express stipulation in the marriage settlements. The judgment which
resulted from the parties compromise was not specifically and expressly for separation of property and should not be so
inferred.
With respect to the house and lot, Erlinda allegedly bought the same for P20,000.00 on September 23, 1975 when
she was only 22 years old. The testimony of the notary public who prepared the deed of conveyance for the property
reveals the falsehood of this claim. Atty. Constantino Sagun testified that Miguel Palang provided the money for the
purchase price and directed that Erlindas name alone be placed as the vendee.
The transaction was properly a donation made by Miguel to Erlinda, but one which was clearly void and inexistent by
express provision of law because it was made between persons guilty of adultery or concubinage at the time of the
donation, under Article 739 of the Civil Code.Moreover, Article 87 of the Family Code expressly provides that the
prohibition against donations between spouses now applies to donations between persons living together as husband and
wife without a valid marriage, for otherwise, the condition of those who incurred guilt would turn out to be better than those
in legal union.
The second issue concerning Kristopher Palangs status and claim as an illegitimate son and heir to Miguels estate is
here resolved in favor of respondent courts correct assessment that the trial court erred in making pronouncements
regarding Kristophers heirship and filiation inasmuch as questions as to who are the heirs of the decedent, proof of
filiation of illegitimate children and the determination of the estate of the latter and claims thereto should be ventilated in
the proper probate court or in a special proceeding instituted for the purpose and cannot be adjudicated in the instant
ordinary civil action which is for recovery of ownership and possession.
As regards the third issue, petitioner contends that Kristopher Palang should be considered as party-defendant in the
case at bar following the trial courts decision which expressly found that Kristopher had not been impleaded as party
defendant but theorized that he had submitted to the courts jurisdiction through his mother/guardian ad litem. The trial
court erred gravely.Kristopher, not having been impleaded, was, therefore, not a party to the case at bar. His mother,
Erlinda, cannot be called his guardian ad litem for he was not involved in the case at bar. Petitioner adds that there is no
need for Kristopher to file another action to prove that he is the illegitimate son of Miguel, in order to avoid multiplicity of
suits. Petitioners grave error has been discussed in the preceeding paragraph where the need for probate proceedings to
resolve the settlement of Miguels estate and Kristophers successional rights has been pointed out.
WHEREFORE, the instant petition is hereby DENIED. The questioned decision of the Court of Appeals is
AFFIRMED. Costs against petitioner.
SO ORDERED.

[G.R. No. 137650. April 12, 2000]


GUILLERMA TUMLOS, petitioner, vs. SPOUSES MARIO FERNANDEZ and LOURDES FERNANDEZ, respondents.
DECISION
PANGANIBAN, J.:
Under Article 148 of the Family Code, a man and a woman who are not legally capacitated to marry each other, but who
nonetheless live together conjugally, may be deemed co-owners of a property acquired during the cohabitation only upon
proof that each made an actual contribution to its acquisition. Hence, mere cohabitation without proof of contribution will
not result in a co-ownership.
The Case
Before us is a Petition for Review under Rule 45 of the Rules of Court, assailing the November 19, 1998 Decision of the
Court of Appeals (CA), which reversed the October 7, 1997 Order of the Regional Trial Court (RTC). The dispositive part
of the CA Decision reads: Jur-is
"WHEREFORE, the instant petition is GRANTED, and the questioned orders of the court a quo dated
October 7, 1997 and November 11, 1997, are hereby REVERSED and SET ASIDE. The judgment of the
court a quo dated June 5, 1997 is hereby REINSTATED. Costs against the private respondents."
The assailed Order of the RTC disposed as follows: Supr-ema
"Wherefore, the decision of this Court rendered on June 5, 1997 affirming in toto the appealed judgment
of the [MTC] is hereby reconsidered and a new one is entered reversing said decision of the [MTC] and
dismissing the complaint in the above-entitled case."
Petitioner also assails the February 14, 1999 CA Resolution denying the Motion for Reconsideration.
The Facts
The Court of Appeals narrates the facts as follows:
"[Herein respondents] were the plaintiffs in Civil Case No. 6756, an action for ejectment filed before Branch 82 of the
MTC of Valenzuela, Metro Manila against [herein Petitioner] Guillerma Tumlos, Toto Tumlos, and Gina Tumlos. In their
complaint dated July 5, 1996, the said spouses alleged that they are the absolute owners of an apartment building
located at ARTE SUBDIVISION III, Lawang Bato, Valenzuela, Metro Manila; that through tolerance they had allowed the
defendants-private respondents to occupy the apartment building for the last seven (7) years, since 1989, without the
payment of any rent; that it was agreed upon that after a few months, defendant Guillerma Tumlos will pay P1,600.00 a
month while the other defendants promised to pay P1,000.00 a month, both as rental, which agreement was not
complied with by the said defendants; that they have demanded several times [that] the defendants x x x vacate the
premises, as they are in need of the property for the construction of a new building; and that they have also demanded
payment of P84,000.00 from Toto and Gina Tumlos representing rentals for seven (7) years and payment of
P143,600.00 from Guillerma Tumlos as unpaid rentals for seven (7) years, but the said demands went unheeded. They
then prayed that the defendants be ordered to vacate the property in question and to pay the stated unpaid rentals, as
well as to jointly pay P30,000.00 in attorneys fees.
"[Petitioner] Guillerma Tumlos was the only one who filed an answer to the complaint. She averred therein
that the Fernandez spouses had no cause of action against her, since she is a co-owner of the subject
premises as evidenced by a Contract to Sell wherein it was stated that she is a co-vendee of the property
in question together with [Respondent] Mario Fernandez. She then asked for the dismissal of the
complaint.
"After an unfruitful preliminary conference on November 15, 1996, the MTC required the parties to submit
their affidavits and other evidence on the factual issues defined in their pleadings within ten (10) days
from receipt of such order, pursuant to section 9 of the Revised Rule on Summary Procedure. [Petitioner]
Guillerma Tumlos submitted her affidavit/position paper on November 29, 1996, while the [respondents]
filed their position paper on December 5, 1996, attaching thereto their marriage contract, letters of
demand to the defendants, and the Contract to Sell over the disputed property. The MTC thereafter
promulgated its judgment on January 22, 1997[.]Scs-daad
xxxxxxxxx
"Upon appeal to the [RTC], [petitioner and the two other] defendants alleged in their memorandum on
appeal that [Respondent] Mario Fernandez and [Petitioner] Guillerma had an amorous relationship, and
that they acquired the property in question as their love nest. It was further alleged that they lived together
in the said apartment building with their two (2) children for around ten(10) years, and that Guillerma
administered the property by collecting rentals from the lessees of the other apartments, until she
discovered that [Respondent Mario] deceived her as to the annulment of his marriage. It was also during

the early part of 1996 when [Respondent Mario] accused her of being unfaithful and demonstrated his
baseless [jealousy].
"In the same memorandum, [petitioner and the two other] defendants further averred that it was only
recently that Toto Tumlos was temporarily accommodated in one of the rooms of the subject premises
while Gina Tumlos acted as a nanny for the children. In short, their presence there [was] only transient
and they [were] not tenants of the Fernandez spouses.
"On June 5, 1997, the [RTC] rendered a decision affirming in toto the judgment of the MTC. S-daad
"The [petitioner and the two other defendants] seasonably filed a motion for reconsideration on July 3,
1997, alleging that the decision of affirmance by the RTC was constitutionally flawed for failing to point out
distinctly and clearly the findings of facts and law on which it was based vis--vis the statements of issues
they have raised in their memorandum on appeal. They also averred that the Contract to Sell presented
by the plaintiffs which named the buyer as Mario P. Fernandez, of legal age, married to Lourdes P.
Fernandez, should not be given credence as it was falsified to appear that way. According to them, the
Contract to Sell originally named Guillerma Fernandez as the spouse of [Respondent Mario]. As found by
the [RTC] in its judgment, a new Contract to Sell was issued by the sellers naming the [respondents] as
the buyers after the latter presented their marriage contract and requested a change in the name of the
vendee-wife. Such facts necessitate the conclusion that Guillerma was really a co-owner thereof, and that
the [respondents] manipulated the evidence in order to deprive her of her rights to enjoy and use the
property as recognized by law. Sd-aamiso
xxxxxxxxx
"The [RTC], in determining the question of ownership in order to resolve the issue of possession, ruled
therein that the Contract to Sell submitted by the Fernandez spouses appeared not to be authentic, as
there was an alteration in the name of the wife of [Respondent] Mario Fernandez. Hence, the contract
presented by the [respondents] cannot be given any weight. The court further ruled that Guillerma and
[Respondent Mario] acquired the property during their cohabitation as husband and wife, although without
the benefit of marriage. From such findings, the court concluded that [Petitioner] Guillerma Tumlos was a
co-owner of the subject property and could not be ejected therefrom.
"The [respondents] then filed a motion for reconsideration of the order of reversal, but the same was
denied by the [RTC]."
As earlier stated, the CA reversed the RTC. Hence, this Petition filed by Guillerma Tumlos only.
Ruling of the Court of Appeals
The CA rejected petitioners claim that she and Respondent Mario Fernandez were co-owners of the disputed property.
The CA ruled: Scnc-m
"From the inception of the instant case, the only defense presented by private respondent Guillerma is
her right as a co-owner of the subject property[.]
xxxxxxxxx
This claim of co-ownership was not satisfactorily proven by Guillerma, as correctly held by the trial court.
No other evidence was presented to validate such claim, except for the said affidavit/position paper. As
previously stated, it was only on appeal that Guillerma alleged that she cohabited with the petitionerhusband without the benefit of marriage, and that she bore him two (2) children. Attached to her
memorandum on appeal are the birth certificates of the said children. Such contentions and documents
should not have been considered by the x x x (RTC), as they were not presented in her affidavit/position
paper before the trial court (MTC).
xxxxxxxxx
"However, even if the said allegations and documents could be considered, the claim of co-ownership
must still fail. As [herein Respondent] Mario Fernandez is validly married to [Respondent] Lourdes
Fernandez (as per Marriage Contract dated April 27, 1968, p. 45, Original Record), Guillerma and Mario
are not capacitated to marry each other. Thus, the property relations governing their supposed
cohabitation is that found in Article 148 of Executive Order No. 209, as amended, otherwise known as the
Family Code of the Philippines[.]
xxxxxxxxx
"It is clear that actual contribution is required by this provision, in contrast to Article 147 of the Family
Code which states that efforts in the care and maintenance of the family and household are regarded as
contributions to the acquisition of common property by one who has no salary or income or work or
industry (Agapay v. Palang, 276 SCRA 340). The care given by one party [to] the home, children, and

household, or spiritual or moral inspiration provided to the other, is not included in Article 148 (Handbook
on the Family Code of the Philippines by Alicia V. Sempio-Diy, 1988 ed., p. 209). Hence, if actual
contribution of the party is not proved, there will be no co-ownership and no presumption of equal
shares (Agapay, supra at p. 348, citing Commentaries and Jurisprudence on the Civil Code of the
Philippines Volume I by Arturo M. Tolentino, 1990 ed., p. 500).
"In the instant case, no proof of actual contribution by Guillerma Tumlos in the purchase of the subject
property was presented. Her only evidence was her being named in the Contract to Sell as the wife of
[Respondent] Mario Fernandez. Since she failed to prove that she contributed money to the purchase
price of the subject apartment building, We find no basis to justify her co-ownership with [Respondent
Mario]. The said property is thus presumed to belong to the conjugal partnership property of Mario and
Lourdes Fernandez, it being acquired during the subsistence of their marriage and there being no other
proof to the contrary(please see Article 116 of the Family Code).
"The court a quo (RTC) also found that [Respondent Mario] has two (2) children with Guillerma who are in
her custody, and that to eject them from the apartment building would be to run counter with the obligation
of the former to give support to his minor illegitimate children, which indispensably includes dwelling. As
previously discussed, such finding has no leg to stand on, it being based on evidence presented for the
first time on appeal. Nc-mmis
xxxxxxxxx
"Even assuming arguendo that the said evidence was validly presented, the RTC failed to consider that
the need for support cannot be presumed. Article 203 of the Family Code expressly provides that the
obligation to give support shall be demandable from the time the person who has a right to receive the
same needs it for maintenance, but it shall not be paid except from the date of judicial or extrajudicial
demand. x x x. Nc-m
"In contrast to the clear pronouncement of the Supreme Court, the RTC instead presumed that Guillerma
and her children needed support from [Respondent Mario]. Worse, it relied on evidence not properly
presented before the trial court (MTC).
"With regard to the other [defendants], Gina and Toto Tumlos, a close perusal of the records shows that
they did not file any responsive pleading. Hence, judgment may be rendered against them as may be
warranted by the facts alleged in the complaint and limited to what is prayed for therein, as provided for in
Section 6 of the Revised Rules on Summary Procedure. There was no basis for the public respondent to
dismiss the complaint against them." (emphasis in the original) Ol-dmiso
The Issues
In her Memorandum, petitioner submits the following issues for the consideration of the Court:
"I. The Court of Appeals gravely erred and abused its discretion in not outrightly dismissing the petition for
review filed by respondents.
"II. The Court of Appeals erred in finding that petitioner is not the co-owner of the property in litis.
"III. Corollary thereto, the Court of Appeals erred in applying Art. 148 of the Family Code in the case at
bar. Man-ikan
"IV. The Court of Appeals erred in disregarding the substantive right of support vis--vis the remedy of
ejectment resorted to by respondents."
In resolving this case, we shall answer two questions: (a) Is the petitioner a co-owner of the property? (b) Can the claim
for support bar this ejectment suit? We shall also discuss these preliminary matters: (a) whether the CA was biased in
favor of respondents and (b) whether the MTC had jurisdiction over the ejectment suit. Manik-s
The Courts Ruling
The Petition has no merit.
Preliminary Matters
Petitioner submits that the CA exhibited partiality in favor of herein respondents. This bias, she argues, is manifest in the
following: Man-ikx
1. The CA considered the respondents Petition for Review despite their failure to attach several pleadings as well as the
explanation for the proof of service, despite the clear mandate of Section 11 of Rule 13 of the Revised Rules of Court and
despite the ruling in Solar Team Entertainment, Inc. v. Ricafort.
2. It allowed respondents to submit the pleadings that were not attached.
3. It considered respondents Reply dated May 20, 1998, which had allegedly been filed out of time. Ne-xold

4. It declared that the case was submitted for decision without first determining whether to give due course to the Petition,
pursuant to Section 6, Rule 42 of the Rules of Court.
The CA, for its part, succinctly dismissed these arguments in this wise: Mi-so
"It is too late in the day now to question the alleged procedural error after we have rendered the decision.
More importantly, when the private respondent filed their comment to the petition on April 26, 1998, they
failed to question such alleged procedural error. Neither have they questioned all the resolutions issued
by the Court after their filing of such comment. They should, therefore, be now considered in estoppel to
question the same."
We agree with the appellate court. Petitioner never raised these matters before the CA. She cannot be allowed now to
challenge its Decision on grounds of alleged technicalities beingbelatedly raised as an afterthought. In this light, she
cannot invoke Solar because she never raised this issue before the CA. Spp-edjo
More important, we find it quite sanctimonious indeed on petitioners part to rely, on the one hand, on these procedural
technicalities to overcome the appealed Decision and, on the other hand, assert that the RTC may consider the new
evidence she presented for the first time on appeal. Such posturing only betrays the futility of petitioners assertion, if not
its absence of merit.
One other preliminary matter. Petitioner implies that the court of origin, the Municipal Trial Court (MTC), did not have
jurisdiction over the "nature of the case," alleging that the real question involved is one of ownership. Since the issue of
possession cannot be settled without passing upon that of ownership, she maintains that the MTC should have dismissed
the case. Josp-ped
This contention is erroneous. The issue of ownership may be passed upon by the MTC to settle the issue of
possession. Such disposition, however, is not final insofar as the issue of ownership is concerned, which may be the
subject of another proceeding brought specifically to settle that question.
Having resolved these preliminary matters, we now move on to petitioners substantive contentions. Spped
First Issue: Petitioner as Co-owner
Petitioners central theory and main defense against respondents action for ejectment is her claim of co-ownership over
the property with Respondent Mario Fernandez. At the first instance before the MTC, she presented a Contract to Sell
indicating that she was his spouse. The MTC found this document insufficient to support her claim. The RTC, however,
after considering her allegation that she had been cohabiting with Mario Fernandez as shown by evidence presented
before it, ruled in her favor. Misspped
On the other hand, the CA held that the pieces of evidence adduced before the RTC could no longer be considered
because they had not been submitted before the MTC. Hence, the appellate court concluded that "[t]he claim of coownership was not satisfactorily proven x x x."
We agree with the petitioner that the RTC did not err in considering the evidence presented before it. Nonetheless, we
reject her claim that she was a co-owner of the disputed property.Missc
Evidence Presented on Appeal Before the RTC
In ruling that the RTC erred in considering on appeal the evidence presented by petitioner, the CA relied on the doctrine
that issues not raised during trial could not be considered for the first time during appeal.
We disagree. In the first place, there were no new matters or issues belatedly raised during the appeal before the RTC.
The defense invoked by petitioner at the very start was that she was a co-owner. To support her claim, she presented a
Contract to Sell dated November 14, 1986, which stated that Mario Fernandez was legally married to her. The allegation
that she was cohabiting with him was a mere elaboration of her initial theory.
In the second place, procedural rules are generally premised on considerations of fair play. Respondents never objected
when the assailed evidence was presented before the RTC. Thus, they cannot claim unfair surprise or prejudice. Scmis
Petitioner Not a Co-Owner Under Article 144 of the Civil Code
Even considering the evidence presented before the MTC and the RTC, we cannot accept petitioners submission that she
is a co-owner of the disputed property pursuant to Article 144 of the Civil Code. As correctly held by the CA, the applicable
law is not Article 144 of the Civil Code, but Article 148 of the Family Code which provides:
"Art. 148. In cases of cohabitation not falling under the preceding Article, only the properties acquired by
both of the parties through their actual joint contribution of money, property, or industry shall be owned by
them in common in proportion to their respective contributions. In the absence of proof to the contrary,
their contributions and corresponding shares are presumed to be equal. The same rule and presumption
shall apply to joint deposits of money and evidences of credit.
"If one of the parties is validly married to another, his or her share in the co-ownership shall accrue to the
absolute community or conjugal partnership existing in such valid marriage. If the party who acted in bad

faith is not validly married to another, his or her share shall be forfeited in the manner provided in the last
paragraph of the preceding Article.
"The foregoing rules on forfeiture shall likewise apply even if both parties are in bad faith." Sc
Article 144 of the Civil Code applies only to a relationship between a man and a woman who are capacitated to marry
each other, or to one in which the marriage of the parties is void from the beginning. It does not apply to a cohabitation
that amounts to adultery or concubinage, for it would be absurd to create a co-ownership where there exists a prior
conjugal partnership or absolute community between the man and his lawful wife.
Based on evidence presented by respondents, as well as those submitted by petitioner herself before the RTC, it is clear
that Mario Fernandez was incapacitated to marry petitioner because he was legally married to Lourdes Fernandez. It is
also clear that, as readily admitted by petitioner, she cohabited with Mario in a state of concubinage. Therefore, Article 144
of the Civil Code is inapplicable.
As stated above, the relationship between petitioner and Respondent Mario Fernandez is governed by Article 148 of the
Family Code. Justice Alicia V. Sempio-Diy points out that "[t]he Family Code has filled the hiatus in Article 144 of the Civil
Code by expressly regulating in its Article 148 the property relations of couples living in a state of adultery or
concubinage." x-sc
Hence, petitioners argument -- that the Family Code is inapplicable because the cohabitation and the acquisition of the
property occurred before its effectivity -- deserves scant consideration. Suffice it to say that the law itself states that it can
be applied retroactively if it does not prejudice vested or acquired rights. In this case, petitioner failed to show any vested
right over the property in question. Moreover, to resolve similar issues, we have applied Article 148 of the Family Code
retroactively.
No Evidence of Actual Joint Contribution
Another consideration militates against petitioners claim that she is a co-owner of the property. In Agapay, the Court ruled:
"Under Article 148, only the properties acquired by both of the parties through their actual joint
contribution of money, property or industry shall be owned by them in common in proportion to their
respective contributions. It must be stressed that the actual contribution is required by this provision, in
contrast to Article 147 which states that efforts in the care and maintenance of the family and household,
are regarded as contributions to the acquisition of common property by one who has no salary or income
or work or industry. If the actual contribution of the party is not proved, there will be no co-ownership and
no presumption of equal shares." (emphasis ours) xl-aw
In this case, petitioner fails to present any evidence that she had made an actual contribution to purchase the subject
property. Indeed, she anchors her claim of co-ownership merely on her cohabitation with Respondent Mario Fernandez.
Likewise, her claim of having administered the property during the cohabitation is unsubstantiated. In any event, this fact
by itself does not justify her claim, for nothing in Article 148 of the Family Code provides that the administration of the
property amounts to a contribution in its acquisition.
Clearly, there is no basis for petitioners claim of co-ownership. The property in question belongs to the conjugal
partnership of respondents. Hence, the MTC and the CA were correct in ordering the ejectment of petitioner from the
premises. Sc-lex
Second Issue: Support versus Ejectment
Petitioner contends that since Respondent Mario Fernandez failed to repudiate her claim regarding the filiation of his
alleged sons, Mark Gil and Michael Fernandez, his silence on the matter amounts to an admission. Arguing that Mario is
liable for support, she advances the theory that the childrens right to support, which necessarily includes shelter, prevails
over the right of respondents to eject her.
We disagree. It should be emphasized that this is an ejectment suit whereby respondents seek to exercise their
possessory right over their property. It is summary in character and dealssolely with the issue of possession of the
property in dispute. Here, it has been shown that they have a better right to possess it than does the petitioner, whose
right to possess is based merely on their tolerance. Scl-aw
Moreover, Respondent Mario Fernandez alleged failure to repudiate petitioners claim of filiation is not relevant to the
present case. Indeed, it would be highly improper for us to rule on such issue. Besides, it was not properly taken up
below. In any event, Article 298 of the Civil Code requires that there should be an extrajudicial demand. None was made
here. The CA was correct when it said:
"Even assuming arguendo that the said evidence was validly presented, the RTC failed to consider that
the need for support cannot be presumed. Article [298] of the [New Civil Code] expressly provides that the
obligation to give support shall be demandable from the time the person who has a right to receive the
same need it for maintenance, but it shall not be paid except from the date of judicial and extrajudicial
demand."

WHEREFORE, the Petition is DENIED and the appealed Decision AFFIRMED. Costs against petitioner. Rtc-spped
SO ORDERED.
[G.R. No. 136803. June 16, 2000]
EUSTAQUIO MALLILIN, JR., petitioner, vs. MA. ELVIRA CASTILLO,respondent.
DECISION
MENDOZA, J.: batas
This is a petition for review of the amended decision of the Court of Appeals dated May 7, 1998 in CA G.R. CV No. 48443
granting respondents motion for reconsideration of its decision dated November 7, 1996, and of the resolution dated
December 21, 1998 denying petitioners motion for reconsideration.
The factual and procedural antecedents are as follows:
On February 24, 1993, petitioner Eustaquio Mallilin, Jr. filed a complaint for "Partition and/or Payment of Co-Ownership
Share, Accounting and Damages" against respondent Ma. Elvira Castillo. The complaint, docketed as Civil Case No. 93656 at the Regional Trial Court in Makati City, alleged that petitioner and respondent, both married and with children, but
separated from their respective spouses, cohabited after a brief courtship sometime in 1979 while their respective
marriages still subsisted. During their union, they set up the Superfreight Customs Brokerage Corporation, with petitioner
as president and chairman of the board of directors, and respondent as vice-president and treasurer. The business
flourished and petitioner and respondent acquired real and personal properties which were registered solely in
respondents name. In 1992, due to irreconcilable differences, the couple separated. Petitioner demanded from
respondent his share in the subject properties, but respondent refused alleging that said properties had been registered
solely in her name.
In her Amended Answer, respondent admitted that she engaged in the customs brokerage business with petitioner but
alleged that the Superfreight Customs Brokerage Corporation was organized with other individuals and duly registered
with the Securities and Exchange Commission in 1987. She denied that she and petitioner lived as husband and wife
because the fact was that they were still legally married to their respective spouses. She claimed to be the exclusive
owner of all real and personal properties involved in petitioners action for partition on the ground that they were acquired
entirely out of her own money and registered solely in her name.
On November 25, 1994, respondent filed a Motion for Summary Judgment, in accordance with Rule 34 of the Rules of
Court. She contended that summary judgment was proper, because the issues raised in the pleadings were sham and not
genuine, to wit: CODES
A.
The main issue is -- Can plaintiff validly claim the partition and/or payment ofco-ownership share,
accounting and damages, considering that plaintiff and defendant are admittedly both married to
their respective spouses under still valid and subsisting marriages, even assuming as claimed by
plaintiff, that they lived together as husband and wife without benefit of marriage? In other words, can the
parties be considered as co-owners of the properties, under the law, considering the present status of the
parties as both married and incapable of marrying each other, even assuming that they lived together as
husband and wife (?)
B.
As a collateral issue, can the plaintiff be considered as an unregistered co-owner of the real
properties under the Transfer Certificates of Title duly registered solely in the name of defendant
Ma. Elvira Castillo? This issue is also true as far as the motor vehicles in question are concerned which
are also registered in the name of defendant.
On the first point, respondent contended that even if she and petitioner actually cohabited, petitioner could not validly
claim a part of the subject real and personal properties because Art. 144 of the Civil Code, which provides that the rules
on co-ownership shall govern the properties acquired by a man and a woman living together as husband and wife but not
married, or under a marriage which is void ab initio, applies only if the parties are not in any way incapacitated to contract
marriage. In the parties case, their union suffered the legal impediment of a prior subsisting marriage. Thus, the question
of fact being raised by petitioner, i.e., whether they lived together as husband and wife, was irrelevant as no co-ownership
could exist between them.
As to the second issue, respondent maintained that petitioner can not be considered an unregistered co-owner of the
subject properties on the ground that, since titles to the land are solely in her name, to grant petitioners prayer would be to
allow a collateral attack on the validity of such titles.
Petitioner opposed respondents Motion for Summary Judgment. He contended that the case presented genuine factual
issues and that Art. 144 of the Civil Code had been repealed by the Family Code which now allows, under Art. 148, a
limited co-ownership even though a man and a woman living together are not capacitated to marry each other. Petitioner
also asserted that an implied trust was constituted when he and respondent agreed to register the properties solely in the
latters name although the same were acquired out of the profits made from their brokerage business. Petitioner invoked
the following provisions of the Civil Code: yacats

Art. 1452. If two or more persons agree to purchase property and by common consent the legal title is
taken in the name of one of them for the benefit of all, a trust is created by force of law in favor of the
others in proportion to the interest of each.
Art. 1453. When the property is conveyed to a person in reliance upon his declared intention to hold it for,
or transfer it to another grantor, there is an implied trust in favor of the person whose benefit is
contemplated.
On January 30, 1995, the trial court rendered its decision granting respondents motion for summary judgment. It ruled that
an examination of the pleadings shows that the issues involved were purely legal. The trial court also sustained
respondents contention that petitioners action for partition amounted to a collateral attack on the validity of the certificates
of title covering the subject properties. It held that even if the parties really had cohabited, the action for partition could not
be allowed because an action for partition among co-owners ceases to be so and becomes one for title if the defendant,
as in the present case, alleges exclusive ownership of the properties in question. For these reasons, the trial court
dismissed Civil Case No. 93-656.
On appeal, the Court of Appeals on November 7, 1996, ordered the case remanded to the court of origin for trial on the
merits. It cited the decision in Roque v. Intermediate Appellate Court to the effect that an action for partition is at once an
action for declaration of co-ownership and for segregation and conveyance of a determinate portion of the properties
involved. If the defendant asserts exclusive title over the property, the action for partition should not be dismissed. Rather,
the court should resolve the case and if the plaintiff is unable to sustain his claimed status as a co-owner, the court should
dismiss the action, not because the wrong remedy was availed of, but because no basis exists for requiring the defendant
to submit to partition. Resolving the issue whether petitioners action for partition was a collateral attack on the validity of
the certificates of title, the Court of Appeals held that since petitioner sought to compel respondent to execute documents
necessary to effect transfer of what he claimed was his share, petitioner was not actually attacking the validity of the titles
but in fact, recognized their validity. Finally, the appellate court upheld petitioners position that Art. 144 of the Civil Code
had been repealed by Art. 148 of the Family Code. haideem
Respondent moved for reconsideration of the decision of the Court of Appeals. On May 7, 1998, nearly two years after its
first decision, the Court of Appeals granted respondents motion and reconsidered its prior decision. In its decision now
challenged in the present petition, it held
Prefatorily, and to better clarify the controversy on whether this suit is a collateral attack on the titles in
issue, it must be underscored that plaintiff-appellant alleged in his complaint that all the nine (9) titles are
registered in the name of defendant-appellee, Ma. Elvira T. Castillo, except one which appears in the
name of Eloisa Castillo (see par. 9, Complaint). However, a verification of the annexes of such initiatory
pleading shows some discrepancies, to wit:
1. TCT No. 149046 (Annex A)

=.Elvira T. Castillo, single

2. TCT No. 168208 ( Annex B)

=..........-do-

3. TCT No. 37046 (Annex C)

=..........-do-

4. TCT No. 37047 (Annex D)

= ..... ...-do-

5. TCT No. 37048 (Annex E)

=..........-do-

6. TCT No. 30368 (Annex F)

=.Steelhaus Realty & Dev. Corp.

7. TCT No. 30369 (Annex G)

=..........-do-

8. TCT No. 30371 (Annex F)

=..........-do-

9.TCT No. (92323) 67881 (Annex


I)

= Eloisa Castillo

hustisya
In this action, plaintiff-appellant seeks to be declared as 1/2 co-owner of the real properties covered by
the above listed titles and eventually for their partition [par. (a), Prayer; p. 4 Records]. Notably, in order to
achieve such prayer for a joint co-ownership declaration, it is unavoidable that the individual titles involved
be altered, changed, canceled or modified to include therein the name of the appellee as a registered 1/2
co-owner. Yet, no cause of action or even a prayer is contained in the complaint filed. Manifestly, absent

any cause or prayer for the alteration, cancellation, modification or changing of the titles involved, the
desired declaration of co-ownership and eventual partition will utterly be an indirect or collateral attack on
the subject titles in this suit.
It is here that We fell into error, such that, if not rectified will surely lead to a procedural lapse and a
possible injustice. Well settled is the rule that a certificate of title cannot be altered, modified or canceled
except in a direct proceeding in accordance with law. Jksm
In this jurisdiction, the remedy of the landowner whose property has been wrongfully or erroneously
registered in another name is, after one year from the date of the decree, not to set aside the decree, but
respecting it as incontrovertible and no longer open to review, to bring an action for reconveyance or, if
the property had passed into the hands of an innocent purchaser for value, for damages. Verily, plaintiffappellant should have first pursued such remedy or any other relief directly attacking the subject titles
before instituting the present partition suit. Apropos, the case at bench appears to have been prematurely
filed.
Lastly, to grant the partition prayed for by the appellant will in effect rule and decide against the properties
registered in the names of Steelhouse Realty and Development Corporation and Eloisa Castillo, who are
not parties in the case. To allow this to happen will surely result to injustice and denial of due process of
law. . . .
Petitioner moved for reconsideration but his motion was denied by the Court of Appeals in its resolution dated December
21, 1998. Hence this petition.
Petitioner contends that: (1) the Court of Appeals, in its first decision of November 7, 1996, was correct in applying
the Roque ruling and in rejecting respondents claim that she was the sole owner of the subject properties and that the
partition suit was a collateral attack on the titles; (2) the Court of Appeals correctly ruled in its first decision that Art. 148 of
the Family Code governs the co-ownership between the parties, hence, the complaint for partition is proper; (3) with
respect to the properties registered in the name of Steelhouse Realty, respondent admitted ownership thereof and, at the
very least, these properties could simply be excluded and the partition limited to the remaining real and personal
properties; and (4) the Court of Appeals erred in not holding that under the Civil Code, there is an implied trust in his favor.
The issue in this case is really whether summary judgment, in accordance with Rule 35 of the Rules of Court, is proper.
We rule in the negative.
First. Rule 35, 3 of the Rules of Court provides that summary judgment is proper only when, based on the pleadings,
depositions, and admissions on file, and after summary hearing, it is shown that except as to the amount of damages,
there is no veritable issue regarding any material fact in the action and the movant is entitled to judgment as a matter of
law.Conversely, where the pleadings tender a genuine issue, i.e., an issue of fact the resolution of which calls for the
presentation of evidence, as distinguished from an issue which is sham, fictitious, contrived, set-up in bad faith, or patently
unsubstantial, summary judgment is not proper. Chiefx
In the present case, we are convinced that genuine issues exist. Petitioner anchors his claim of co-ownership on two
factual grounds: first, that said properties were acquired by him and respondent during their union from 1979 to 1992 from
profits derived from their brokerage business; and second, that said properties were registered solely in respondents
name only because they agreed to that arrangement, thereby giving rise to an implied trust in accordance with Art. 1452
and Art. 1453 of the Civil Code. These allegations are denied by respondent. She denies that she and petitioner lived
together as husband and wife. She also claims that the properties in question were acquired solely by her with her own
money and resources. With such conflicting positions, the only way to ascertain the truth is obviously through the
presentation of evidence by the parties.
The trial court ruled that it is immaterial whether the parties actually lived together as husband and wife because Art. 144
of the Civil Code can not be made to apply to them as they were both incapacitated to marry each other. Hence, it was
impossible for a co-ownership to exist between them.
We disagree.
Art. 144 of the Civil Code provides:
When a man and a woman live together as husband and wife, but they are not married, or their marriage
is void from the beginning, the property acquired by either or both of them through their work or industry
or their wages and salaries shall be governed by the rules on co-ownership.
This provision of the Civil Code, applies only to cases in which a man and a woman live together as husband and wife
without the benefit of marriage provided they are not incapacitated or are without impediment to marry each other, or in
which the marriage is voidab initio, provided it is not bigamous. Art. 144, therefore, does not cover parties living in an
adulterous relationship. However, Art. 148 of the Family Code now provides for a limited co-ownership in cases where the
parties in union are incapacitated to marry each other. It states:
In cases of cohabitation not falling under the preceding article, only the properties acquired by both of the
parties through their actual joint contribution of money, property or industry shall be owned by them in
common in proportion to their respective contributions. In the absence of proof to the contrary, their

contributions and corresponding shares are presumed to be equal. The same rule and presumption shall
apply to joint deposits of money and evidences of credits.HTML
If one of the parties is validly married to another, his or her share in the co-ownership shall accrue to the
absolute community or conjugal partnership existing in such valid marriage. If the party who acted in bad
faith is not validly married to another, his or her share shall be forfeited in the manner provided in the last
paragraph of the preceding article.
The foregoing rules on forfeiture shall likewise apply even if both parties are in bad faith.
It was error for the trial court to rule that, because the parties in this case were not capacitated to marry each other at the
time that they were alleged to have been living together, they could not have owned properties in common. The Family
Code, in addition to providing that a co-ownership exists between a man and a woman who live together as husband and
wife without the benefit of marriage, likewise provides that, if the parties are incapacitated to marry each other, properties
acquired by them through their joint contribution of money, property or industry shall be owned by them in common in
proportion to their contributions which, in the absence of proof to the contrary, is presumed to be equal. There is thus coownership eventhough the couple are not capacitated to marry each other.
In this case, there may be a co-ownership between the parties herein. Consequently, whether petitioner and respondent
cohabited and whether the properties involved in the case are part of the alleged co-ownership are genuine and material.
All but one of the properties involved were alleged to have been acquired after the Family Code took effect on August 3,
1988. With respect to the property acquired before the Family Code took effect if it is shown that it was really acquired
under the regime of the Civil Code, then it should be excluded.
Petitioner also alleged in paragraph 7 of his complaint that:
Due to the effective management, hardwork and enterprise of plaintiff assisted by defendant, their
customs brokerage business grew and out of the profits therefrom, the parties acquired real and personal
properties which were, upon agreement of the parties, listed and registered in defendants name with
plaintiff as the unregistered co-owner of all said properties. Esmsc
On the basis of this, he contends that an implied trust existed pursuant to Art. 1452 of the Civil Code which provides that
"(I)f two or more persons agree to purchase property and by common consent the legal title is taken in the name of one of
them for the benefit of all, a trust is created by force of law in favor of the others in proportion to the interest of each." We
do not think this is correct. The legal relation of the parties is already specifically covered by Art. 148 of the Family Code
under which all the properties acquired by the parties out of their actual joint contributions of money, property or industry
shall constitute a co-ownership. Co-ownership is a form of trust and every co-owner is a trustee for the other. The
provisions of Art. 1452 and Art. 1453 of the Civil Code, then are no longer material since a trust relation already inheres in
a co-ownership which is governed under Title III, Book II of the Civil Code.
Second. The trial court likewise dismissed petitioners action on the ground that the same amounted to a collateral attack
on the certificates of title involved. As already noted, at first, the Court of Appeals ruled that petitioners action does not
challenge the validity of respondents titles. However, on reconsideration, it reversed itself and affirmed the trial court. It
noted that petitioners complaint failed to include a prayer for the alteration, cancellation, modification, or changing of the
titles involved. Absent such prayer, the appellate court ruled that a declaration of co-ownership and eventual partition
would involve an indirect or collateral attack on the titles. We disagree.
A torrens title, as a rule, is conclusive and indefeasible. Proceeding from this, P.D. No. 1529,48 provides that a certificate
of title shall not be subject to collateral attack and can not be altered, modified, or canceled except in a direct proceeding.
When is an action an attack on a title? It is when the object of the action or proceeding is to nullify the title, and thus
challenge the judgment pursuant to which the title was decreed. The attack is direct when the object of an action or
proceeding is to annul or set aside such judgment, or enjoin its enforcement. On the other hand, the attack is indirect or
collateral when, in an action to obtain a different relief, an attack on the judgment is nevertheless made as an incident
thereof.
In his complaint for partition, consistent with our ruling in Roque regarding the nature of an action for partition, petitioner
seeks first, a declaration that he is a co-owner of the subject properties; and second, the conveyance of his lawful shares.
He does not attack respondents titles. Petitioner alleges no fraud, mistake, or any other irregularity that would justify a
review of the registration decree in respondents favor. His theory is that although the subject properties were registered
solely in respondents name, but since by agreement between them as well as under the Family Code, he is co-owner of
these properties and as such is entitled to the conveyance of his shares. On the premise that he is a co-owner, he can
validly seek the partition of the properties in co-ownership and the conveyance to him of his share. Esmmis
Thus, in Guevara v. Guevara, in which a parcel of land bequeathed in a last will and testament was registered in the name
of only one of the heirs, with the understanding that he would deliver to the others their shares after the debts of the
original owner had been paid, this Court ruled that notwithstanding the registration of the land in the name of only one of
the heirs, the other heirs can claim their shares in "such action, judicial or extrajudicial, as may be necessary to partition
the estate of the testator."
Third. The Court of Appeals also reversed its first decision on the ground that to order partition will, in effect, rule and
decide against Steelhouse Realty Development Corporation and Eloisa Castillo, both strangers to the present case, as to
the properties registered in their names. This reasoning, however, ignores the fact that the majority of the properties

involved in the present case are registered in respondents name, over which petitioner claims rights as a co-owner.
Besides, other than the real properties, petitioner also seeks partition of a substantial amount of personal properties
consisting of motor vehicles and several pieces of jewelry. By dismissing petitioners complaint for partition on grounds of
due process and equity, the appellate court unwittingly denied petitioner his right to prove ownership over the claimed real
and personal properties. The dismissal of petitioners complaint is unjustified since both ends may be amply served by
simply excluding from the action for partition the properties registered in the name of Steelhouse Realty and Eloisa
Castillo.
WHEREFORE, the amended decision of the Court of Appeals, dated May 7, 1998, is REVERSED and the case is
REMANDED to the Regional Trial Court, Branch 59, Makati City for further proceedings on the merits.
SO ORDERED.
[G.R. No. 132529. February 2, 2001]
SUSAN NICDAO CARIO, petitioner, vs. SUSAN YEE CARIO, respondent.
DECISION
YNARES-SANTIAGO, J.:
The issue for resolution in the case at bar hinges on the validity of the two marriages contracted by the deceased
SPO4 Santiago S. Cario, whose death benefits is now the subject of the controversy between the two Susans whom he
married.
Before this Court is a petition for review on certiorari seeking to set aside the decision of the Court of Appeals in CAG.R. CV No. 51263, which affirmed in toto the decision of the Regional Trial Court of Quezon City, Branch 87, in Civil
Case No. Q-93-18632.
During the lifetime of the late SPO4 Santiago S. Cario, he contracted two marriages, the first was on June 20, 1969,
with petitioner Susan Nicdao Cario (hereafter referred to as Susan Nicdao), with whom he had two offsprings, namely,
Sahlee and Sandee Cario; and the second was on November 10, 1992, with respondent Susan Yee Cario (hereafter
referred to as Susan Yee), with whom he had no children in their almost ten year cohabitation starting way back in 1982.
In 1988, SPO4 Santiago S. Cario became ill and bedridden due to diabetes complicated by pulmonary
tuberculosis. He passed away on November 23, 1992, under the care of Susan Yee, who spent for his medical and burial
expenses. Both petitioner and respondent filed claims for monetary benefits and financial assistance pertaining to the
deceased from various government agencies. Petitioner Susan Nicdao was able to collect a total of P146,000.00 from
MBAI, PCCUI, Commutation, NAPOLCOM, [and] Pag-ibig, while respondent Susan Yee received a total of P21,000.00
from GSIS Life, Burial (GSIS) and burial (SSS).
On December 14, 1993, respondent Susan Yee filed the instant case for collection of sum of money against
petitioner Susan Nicdao praying, inter alia, that petitioner be ordered to return to her at least one-half of the one hundred
forty-six thousand pesos (P146,000.00) collectively denominated as death benefits which she (petitioner) received from
MBAI, PCCUI, Commutation, NAPOLCOM, [and] Pag-ibig. Despite service of summons, petitioner failed to file her
answer, prompting the trial court to declare her in default.
Respondent Susan Yee admitted that her marriage to the deceased took place during the subsistence of, and without
first obtaining a judicial declaration of nullity of, the marriage between petitioner and the deceased. She, however, claimed
that she had no knowledge of the previous marriage and that she became aware of it only at the funeral of the deceased,
where she met petitioner who introduced herself as the wife of the deceased. To bolster her action for collection of sum of
money, respondent contended that the marriage of petitioner and the deceased is void ab initio because the same was
solemnized without the required marriage license. In support thereof, respondent presented: 1) the marriage certificate of
the deceased and the petitioner which bears no marriage license number; and 2) a certification dated March 9, 1994, from
the Local Civil Registrar of San Juan, Metro Manila, which reads
This is to certify that this Office has no record of marriage license of the spouses SANTIAGO CARINO (sic) and SUSAN
NICDAO, who are married in this municipality on June 20, 1969. Hence, we cannot issue as requested a true copy or
transcription of Marriage License number from the records of this archives.
This certification is issued upon the request of Mrs. Susan Yee Cario for whatever legal purpose it may serve.
On August 28, 1995, the trial court ruled in favor of respondent, Susan Yee, holding as follows:
WHEREFORE, the defendant is hereby ordered to pay the plaintiff the sum of P73,000.00, half of the amount which was
paid to her in the form of death benefits arising from the death of SPO4 Santiago S. Cario, plus attorneys fees in the
amount of P5,000.00, and costs of suit.
IT IS SO ORDERED.
On appeal by petitioner to the Court of Appeals, the latter affirmed in toto the decision of the trial court. Hence, the
instant petition, contending that:
I.

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE FINDINGS OF THE LOWER
COURT THAT VDA. DE CONSUEGRA VS. GSIS IS APPLICABLE TO THE CASE AT BAR.
II.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN APPLYING EQUITY IN THE INSTANT CASE
INSTEAD OF THE CLEAR AND UNEQUIVOCAL MANDATE OF THE FAMILY CODE.
III.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT FINDING THE CASE OF VDA. DE
CONSUEGRA VS GSIS TO HAVE BEEN MODIFIED, AMENDED AND EVEN ABANDONED BY THE ENACTMENT
OF THE FAMILY CODE.
Under Article 40 of the Family Code, the absolute nullity of a previous marriage may be invoked for purposes of
remarriage on the basis solely of a final judgment declaring such previous marriage void.Meaning, where the absolute
nullity of a previous marriage is sought to be invoked for purposes of contracting a second marriage, the sole basis
acceptable in law, for said projected marriage to be free from legal infirmity, is a final judgment declaring the previous
marriage void. However, for purposes other than remarriage, no judicial action is necessary to declare a marriage an
absolute nullity. For other purposes, such as but not limited to the determination of heirship, legitimacy or illegitimacy of a
child, settlement of estate, dissolution of property regime, or a criminal case for that matter, the court may pass upon the
validity of marriage even after the death of the parties thereto, and even in a suit not directly instituted to question the
validity of said marriage, so long as it is essential to the determination of the case. In such instances, evidence must be
adduced, testimonial or documentary, to prove the existence of grounds rendering such a previous marriage an absolute
nullity. These need not be limited solely to an earlier final judgment of a court declaring such previous marriage void.
It is clear therefore that the Court is clothed with sufficient authority to pass upon the validity of the two marriages in
this case, as the same is essential to the determination of who is rightfully entitled to the subject death benefits of the
deceased.
Under the Civil Code, which was the law in force when the marriage of petitioner Susan Nicdao and the deceased
was solemnized in 1969, a valid marriage license is a requisite of marriage, and the absence thereof, subject to certain
exceptions, renders the marriage void ab initio.
In the case at bar, there is no question that the marriage of petitioner and the deceased does not fall within the
marriages exempt from the license requirement. A marriage license, therefore, was indispensable to the validity of their
marriage. This notwithstanding, the records reveal that the marriage contract of petitioner and the deceased bears no
marriage license number and, as certified by the Local Civil Registrar of San Juan, Metro Manila, their office has no record
of such marriage license. InRepublic v. Court of Appeals, the Court held that such a certification is adequate to prove the
non-issuance of a marriage license. Absent any circumstance of suspicion, as in the present case, the certification issued
by the local civil registrar enjoys probative value, he being the officer charged under the law to keep a record of all data
relative to the issuance of a marriage license.
Such being the case, the presumed validity of the marriage of petitioner and the deceased has been sufficiently
overcome. It then became the burden of petitioner to prove that their marriage is valid and that they secured the required
marriage license. Although she was declared in default before the trial court, petitioner could have squarely met the issue
and explained the absence of a marriage license in her pleadings before the Court of Appeals and this Court. But
petitioner conveniently avoided the issue and chose to refrain from pursuing an argument that will put her case in
jeopardy. Hence, the presumed validity of their marriage cannot stand.
It is beyond cavil, therefore, that the marriage between petitioner Susan Nicdao and the deceased, having been
solemnized without the necessary marriage license, and not being one of the marriages exempt from the marriage license
requirement, is undoubtedly void ab initio.
It does not follow from the foregoing disquisition, however, that since the marriage of petitioner and the deceased is
declared void ab initio, the death benefits under scrutiny would now be awarded to respondent Susan Yee. To reiterate,
under Article 40 of the Family Code, for purposes of remarriage, there must first be a prior judicial declaration of the nullity
of a previous marriage, though void, before a party can enter into a second marriage, otherwise, the second marriage
would also be void.
Accordingly, the declaration in the instant case of nullity of the previous marriage of the deceased and petitioner
Susan Nicdao does not validate the second marriage of the deceased with respondent Susan Yee. The fact remains that
their marriage was solemnized without first obtaining a judicial decree declaring the marriage of petitioner Susan Nicdao
and the deceased void. Hence, the marriage of respondent Susan Yee and the deceased is, likewise, void ab initio.
One of the effects of the declaration of nullity of marriage is the separation of the property of the spouses according
to the applicable property regime. Considering that the two marriages are void ab initio, the applicable property regime
would not be absolute community or conjugal partnership of property, but rather, be governed by the provisions of Articles
147 and 148 of the Family Code on Property Regime of Unions Without Marriage.

Under Article 148 of the Family Code, which refers to the property regime of bigamous marriages, adulterous
relationships, relationships in a state of concubine, relationships where both man and woman are married to other
persons, multiple alliances of the same married man, ... [O]nly the properties acquired by both of the parties through their actual joint contribution of money, property, or
industry shall be owned by them in common in proportion to their respective contributions ...
In this property regime, the properties acquired by the parties through their actual joint contributionshall belong to the
co-ownership. Wages and salaries earned by each party belong to him or her exclusively. Then too, contributions in the
form of care of the home, children and household, or spiritual or moral inspiration, are excluded in this regime.
Considering that the marriage of respondent Susan Yee and the deceased is a bigamous marriage, having been
solemnized during the subsistence of a previous marriage then presumed to be valid (between petitioner and the
deceased), the application of Article 148 is therefore in order.
The disputed P146,000.00 from MBAI [AFP Mutual Benefit Association, Inc.], NAPOLCOM, Commutation, Pag-ibig,
and PCCUI, are clearly renumerations, incentives and benefits from governmental agencies earned by the deceased as a
police officer. Unless respondent Susan Yee presents proof to the contrary, it could not be said that she contributed
money, property or industry in the acquisition of these monetary benefits. Hence, they are not owned in common by
respondent and the deceased, but belong to the deceased alone and respondent has no right whatsoever to claim the
same. By intestate succession, the said death benefits of the deceased shall pass to his legal heirs. And, respondent, not
being the legal wife of the deceased is not one of them.
As to the property regime of petitioner Susan Nicdao and the deceased, Article 147 of the Family Code governs. This
article applies to unions of parties who are legally capacitated and not barred by any impediment to contract marriage, but
whose marriage is nonetheless void for other reasons, like the absence of a marriage license. Article 147 of the Family
Code reads Art. 147. When a man and a woman who are capacitated to marry each other, live exclusively with each other as husband
and wife without the benefit of marriage or under a void marriage, their wages and salaries shall be owned by them in
equal shares and the property acquired by both of them through their work or industry shall be governed by the rules on
co-ownership.
In the absence of proof to the contrary, properties acquired while they lived together shall be presumed to have been
obtained by their joint efforts, work or industry, and shall be owned by them in equal shares. For purposes of this Article, a
party who did not participate in the acquisition by the other party of any property shall be deemed to have contributed
jointly in the acquisition thereof if the formers efforts consisted in the care and maintenance of the family and of the
household.
xxxxxxxxx
When only one of the parties to a void marriage is in good faith, the share of the party in bad faith in the co-ownership
shall be forfeited in favor of their common children. In case of default of or waiver by any or all of the common children or
their descendants, each vacant share shall belong to the respective surviving descendants. In the absence of
descendants, such share shall belong to the innocent party. In all cases, the forfeiture shall take place upon termination of
the cohabitation.
In contrast to Article 148, under the foregoing article, wages and salaries earned by either party during the
cohabitation shall be owned by the parties in equal shares and will be divided equally between them, even if only one
party earned the wages and the other did not contribute thereto. Conformably, even if the disputed death benefits were
earned by the deceased alone as a government employee, Article 147 creates a co-ownership in respect thereto, entitling
the petitioner to share one-half thereof. As there is no allegation of bad faith in the present case, both parties of the first
marriage are presumed to be in good faith. Thus, one-half of the subject death benefits under scrutiny shall go to the
petitioner as her share in the property regime, and the other half pertaining to the deceased shall pass by, intestate
succession, to his legal heirs, namely, his children with Susan Nicdao.
In affirming the decision of the trial court, the Court of Appeals relied on the case of Vda. de Consuegra v.
Government Service Insurance System, where the Court awarded one-half of the retirement benefits of the deceased to
the first wife and the other half, to the second wife, holding that:
... [S]ince the defendants first marriage has not been dissolved or declared void the conjugal partnership established by
that marriage has not ceased. Nor has the first wife lost or relinquished her status as putative heir of her husband under
the new Civil Code, entitled to share in his estate upon his death should she survive him. Consequently, whether as
conjugal partner in a still subsisting marriage or as such putative heir she has an interest in the husbands share in the
property here in dispute.... And with respect to the right of the second wife, this Court observed that although the second
marriage can be presumed to be void ab initio as it was celebrated while the first marriage was still subsisting, still there is
need for judicial declaration of such nullity. And inasmuch as the conjugal partnership formed by the second marriage was
dissolved before judicial declaration of its nullity, [t]he only just and equitable solution in this case would be to recognize

the right of the second wife to her share of one-half in the property acquired by her and her husband, and consider the
other half as pertaining to the conjugal partnership of the first marriage.
It should be stressed, however, that the aforecited decision is premised on the rule which requires a prior and
separate judicial declaration of nullity of marriage. This is the reason why in the said case, the Court determined the rights
of the parties in accordance with their existing property regime.
In Domingo v. Court of Appeals, however, the Court, construing Article 40 of the Family Code,clarified that a prior and
separate declaration of nullity of a marriage is an all important condition precedent only for purposes of remarriage. That
is, if a party who is previously married wishes to contract a second marriage, he or she has to obtain first a judicial decree
declaring the first marriage void, before he or she could contract said second marriage, otherwise the second marriage
would be void.The same rule applies even if the first marriage is patently void because the parties are not free to
determine for themselves the validity or invalidity or their marriage. However, for purposes other than to remarry, like for
filing a case for collection of sum of money anchored on a marriage claimed to be valid, no prior and separate judicial
declaration of nullity is necessary. All that a party has to do is to present evidence, testimonial or documentary, that would
prove that the marriage from which his or her rights flow is in fact valid. Thereupon, the court, if material to the
determination of the issues before it, will rule on the status of the marriage involved and proceed to determine the rights of
the parties in accordance with the applicable laws and jurisprudence. Thus, in Nial v. Bayadog, the Court explained:
[T]he court may pass upon the validity of marriage even in a suit not directly instituted to question the same so long as it is
essential to the determination of the case. This is without prejudice to any issue that may arise in the case. When such
need arises, a final judgment of declaration of nullity is necessary even if the purpose is other than to remarry. The clause
on the basis of a final judgment declaring such previous marriage void in Article 40 of the Family Code connoted that such
final judgment need not be obtained only for purpose of remarriage.
WHEREFORE, the petition is GRANTED, and the decision of the Court of Appeals in CA-G.R. CV No. 51263 which
affirmed the decision of the Regional Trial Court of Quezon City ordering petitioner to pay respondent the sum of
P73,000.00 plus attorneys fees in the amount of P5,000.00, is REVERSED and SET ASIDE. The complaint in Civil Case
No. Q-93-18632, is hereby DISMISSED. No pronouncement as to costs.
SO ORDERED.
[G.R. No. 150611. June 10, 2003]
JACINTO SAGUID, petitioner, vs. HON. COURT OF APPEALS, THEREGIONAL TRIAL COURT, BRANCH 94, BOAC,
MARINDUQUE andGINA S. REY, respondents.
DECISION
YNARES-SANTIAGO, J.:
The regime of limited co-ownership of property governing the union of parties who are not legally capacitated to
marry each other, but who nonetheless live together as husband and wife, applies to properties acquired during said
cohabitation in proportion to their respective contributions. Co-ownership will only be up to the extent of the proven actual
contribution of money, property or industry. Absent proof of the extent thereof, their contributions and corresponding
shares shall be presumed to be equal.
Seventeen-year old Gina S. Rey was married, but separated de facto from her husband, when she met petitioner
Jacinto Saguid in Marinduque, sometime in July 1987. After a brief courtship, the two decided to cohabit as husband and
wife in a house built on a lot owned by Jacintos father. Their cohabitation was not blessed with any children. Jacinto made
a living as the patron of their fishing vessel Saguid Brothers. Gina, on the other hand, worked as a fish dealer, but decided
to work as an entertainer in Japan from 1992 to 1994 when her relationship with Jacintos relatives turned sour. Her
periodic absence, however, did not ebb away the conflict with petitioners relatives. In 1996, the couple decided to
separate and end up their 9-year cohabitation.
On January 9, 1997, private respondent filed a complaint for Partition and Recovery of Personal Property with
Receivership against the petitioner with the Regional Trial Court of Boac, Marinduque. She alleged that from her salary of
$1,500.00 a month as entertainer in Japan, she was able to contribute P70,000.00 in the completion of their unfinished
house. Also, from her own earnings as an entertainer and fish dealer, she was able to acquire and accumulate
appliances, pieces of furniture and household effects, with a total value of P111,375.00. She prayed that she be declared
the sole owner of these personal properties and that the amount of P70,000.00, representing her contribution to the
construction of their house, be reimbursed to her.
Private respondent testified that she deposited part of her earnings in her savings account with First Allied
Development Bank. Her Pass Book shows that as of May 23, 1995, she had a balance of P21,046.08. She further stated
that she had a total of P35,465.00 share in the joint account deposit which she and the petitioner maintained with the
same bank. Gina declared that said deposits were spent for the purchase of construction materials, appliances and other
personal properties.

In his answer to the complaint, petitioner claimed that the expenses for the construction of their house were defrayed
solely from his income as a captain of their fishing vessel. He averred that private respondents meager income as fish
dealer rendered her unable to contribute in the construction of said house. Besides, selling fish was a mere pastime to
her; as such, she was contented with the small quantity of fish allotted to her from his fishing trips.Petitioner further
contended that Gina did not work continuously in Japan from 1992 to 1994, but only for a 6-month duration each
year. When their house was repaired and improved sometime in 1995-1996, private respondent did not share in the
expenses because her earnings as entertainer were spent on the daily needs and business of her parents. From his
income in the fishing business, he claimed to have saved a total of P130,000.00, P75,000.00 of which was placed in a
joint account deposit with private respondent. This savings, according to petitioner was spent in purchasing the disputed
personal properties.
On May 21, 1997, the trial court declared the petitioner as in default for failure to file a pre-trial brief as required by
Supreme Court Circular No. 1-89.
On May 26, 1997, petitioner filed a motion for reconsideration of the May 21, 1997 order, which was denied on June
2, 1997, and private respondent was allowed to present evidence ex parte. Petitioner filed another motion for
reconsideration but the same was also denied on October 8, 1997.
On July 15, 1998, a decision was renderedin favor of private respondent, the dispositive portion of which reads:
WHEREFORE, in view of all the foregoing, judgment is hereby rendered in favor of the plaintiff Gina S. Rey against
defendant Jacinto Saguid:
a) Ordering the partition of the house identified as plaintiffs Exhibit C and D and directing the defendant to return and/or
reimburse to the plaintiff the amount of seventy thousand pesos (P70,000,00) which the latter actually contributed to its
construction and completion;
b) Declaring the plaintiff as the exclusive owner of the personal properties listed on Exhibit M;
c) Ordering the defendant, and/or anyone in possession of the aforesaid personal properties, to return and/or deliver the
same to the plaintiff; and
d) Ordering the defendant to pay the plaintiff moral damages in the sum of fifty thousand pesos (P50,000.00) plus the
costs of suit.
SO ORDERED.
On appeal, said decision was affirmed by the Court of Appeals; however, the award of P50,000.00 as moral damages
was deleted for lack of basis. The appellate court ruled that the propriety of the order which declared the petitioner as in
default became moot and academic in view of the effectivity of the 1997 Rules of Civil Procedure. It explained that the
new rules now require the filing of a pre-trial brief and the defendants non-compliance therewith entitles the plaintiff to
present evidence ex parte.
Both parties filed motions for reconsideration which were denied; hence, petitioner filed the instant petition based on
the following assigned errors:
A.
THE HONORABLE COURT OF APPEALS COMMIT[TED] A REVERSIBLE ERROR IN APPLYING RETROACTIVELY
THE 1997 RULES OF CIVIL PROCEDURE IN THE PRESENT CASE AND HOLDING THE FIRST ASSIGNED ERROR
THEREIN MOOT AND ACADEMIC THUS, FAILED TO RULE ON THE PROPRIETY OF THE TRIAL COURTS REFUSAL
TO SET ASIDE THE ORDER OF DEFAULT DUE TO MISTAKE AND/OR EXCUSABLE NEGLIGENCE COMMITTED BY
PETITIONER.
B.
THE HONORABLE COURT OF APPEALS COMMIT[TED] A REVERSIBLE ERROR IN RELYING ON THE FACTUAL
FINDINGS OF THE TRIAL COURT WHICH RECEIVED THE EVIDENCE OF HEREIN RESPONDENT ONLY EX PARTE.
The issues for resolution are: (1) whether or not the trial court erred in allowing private respondent to present
evidence ex parte; and (2) whether or not the trial courts decision is supported by evidence.
Under Section 6, Rule 18 of the 1997 Rules of Civil Procedure, the failure of the defendant to file a pre-trial brief shall
have the same effect as failure to appear at the pre-trial, i.e., the plaintiff may present his evidence ex parte and the court
shall render judgment on the basis thereof. The remedy of the defendant is to file a motion for reconsideration showing
that his failure to file a pre-trial brief was due to fraud, accident, mistake or excusable neglect.The motion need not really
stress the fact that the defendant has a valid and meritorious defense because his answer which contains his defenses is
already on record.
In the case at bar, petitioner insists that his failure to file a pre-trial brief is justified because he was not represented
by counsel. This justification is not, however, sufficient to set aside the order directing private respondent to present
evidence ex parte, inasmuch as the petitioner chose at his own risk not to be represented by counsel. Even without the
assistance of a lawyer, petitioner was able to file a motion for extension to file answer, the required answer stating therein

the special and affirmative defenses, and several other motions. If it were true that petitioner did not understand the import
of the April 23, 1997 order directing him to file a pre-trial brief, he could have inquired from the court or filed a motion for
extension of time to file the brief. Instead, he waited until May 26, 1997, or 14 days from his alleged receipt of the April 23,
1997 order before he filed a motion asking the court to excuse his failure to file a brief.Pre-trial rules are not to be belittled
or dismissed because their non-observance may result in prejudice to a partys substantive rights. Like all rules, they
should be followed except only for the most persuasive of reasons when they may be relaxed to relieve a litigant of an
injustice not commensurate with the degree of his thoughtlessness in not complying with the procedure prescribed.
In the instant case, the fact that petitioner was not assisted by a lawyer is not a persuasive reason to relax the
application of the rules. There is nothing in the Constitution which mandates that a party in a non-criminal proceeding be
represented by counsel and that the absence of such representation amounts to a denial of due process. The assistance
of lawyers, while desirable, is not indispensable. The legal profession is not engrafted in the due process clause such that
without the participation of its members the safeguard is deemed ignored or violated.
However, the Court of Appeals erred in ruling that the effectivity of the 1997 Rules of Civil Procedure, specifically,
Section 6, Rule 18 thereof, rendered moot and academic the issue of whether or not the plaintiff may be allowed to
present evidence ex parte for failure of the defendant to file a pre-trial brief. While the rules may indeed be applied
retroactively, the same is not called for in the case at bar. Even before the 1997 Rules of Civil Procedure took effect on
July 1, 1997, the filing of a pre-trial brief was required under Circular No. 1-89 which became effective on February 1,
1989. Pursuant to the said circular, [f]ailure to file pre-trial briefs may be given the same effect as the failure to appear at
the pre-trial, that is, the party may be declared non-suited or considered as in default.
Coming now to the substantive issue, it is not disputed that Gina and Jacinto were incapacitated to marry each other
because the former was validly married to another man at the time of her cohabitation with the latter. Their property
regime therefore is governed by Article 148 of the Family Code, which applies to bigamous marriages, adulterous
relationships, relationships in a state of concubinage, relationships where both man and woman are married to other
persons, and multiple alliances of the same married man. Under this regime, only the properties acquired by both of the
parties through their actual joint contribution of money, property, or industry shall be owned by them in common in
proportion to their respective contributions ... Proof of actual contribution is required.
In the case at bar, although the adulterous cohabitation of the parties commenced in 1987, which is before the date
of the effectivity of the Family Code on August 3, 1998, Article 148 thereof applies because this provision was intended
precisely to fill up the hiatus in Article 144 of the Civil Code. Before Article 148 of the Family Code was enacted, there was
no provision governing property relations of couples living in a state of adultery or concubinage. Hence, even if the
cohabitation or the acquisition of the property occurred before the Family Code took effect, Article 148 governs.
In the cases of Agapay v. Palang, and Tumlos v. Fernandez, which involved the issue of co-ownership of properties
acquired by the parties to a bigamous marriage and an adulterous relationship, respectively, we ruled that proof of actual
contribution in the acquisition of the property is essential. The claim of co-ownership of the petitioners therein who were
parties to the bigamous and adulterous union is without basis because they failed to substantiate their allegation that they
contributed money in the purchase of the disputed properties. Also in Adriano v. Court of Appeals, we ruled that the fact
that the controverted property was titled in the name of the parties to an adulterous relationship is not sufficient proof of
co-ownership absent evidence of actual contribution in the acquisition of the property.
As in other civil cases, the burden of proof rests upon the party who, as determined by the pleadings or the nature of
the case, asserts an affirmative issue. Contentions must be proved by competent evidence and reliance must be had on
the strength of the partys own evidence and not upon the weakness of the opponents defense. This applies with more
vigor where, as in the instant case, the plaintiff was allowed to present evidence ex parte. The plaintiff is not automatically
entitled to the relief prayed for. The law gives the defendant some measure of protection as the plaintiff must still prove the
allegations in the complaint. Favorable relief can be granted only after the court is convinced that the facts proven by the
plaintiff warrant such relief. Indeed, the party alleging a fact has the burden of proving it and a mere allegation is not
evidence.
In the case at bar, the controversy centers on the house and personal properties of the parties. Private respondent
alleged in her complaint that she contributed P70,000.00 for the completion of their house. However, nowhere in her
testimony did she specify the extent of her contribution. What appears in the record are receipts in her name for the
purchase of construction materials on November 17, 1995 and December 23, 1995, in the total amount of P11,413.00.
On the other hand, both parties claim that the money used to purchase the disputed personal properties came partly
from their joint account with First Allied Development Bank.While there is no question that both parties contributed in their
joint account deposit, there is, however, no sufficient proof of the exact amount of their respective shares
therein. Pursuant to Article 148 of the Family Code, in the absence of proof of extent of the parties respective contribution,
their share shall be presumed to be equal. Here, the disputed personal properties were valued at P111,375.00, the
existence and value of which were not questioned by the petitioner. Hence, their share therein is equivalent to onehalf, i.e., P55,687.50 each.

The Court of Appeals thus erred in affirming the decision of the trial court which granted the reliefs prayed for by
private respondent. On the basis of the evidence established, the extent of private respondents co-ownership over the
disputed house is only up to the amount of P11,413.00, her proven contribution in the construction thereof. Anent the
personal properties, her participation therein should be limited only to the amount of P55,687.50.
As regards the trial courts award of P50,000.00 as moral damages, the Court of Appeals correctly deleted the same
for lack of basis.
WHEREFORE, in view of all the foregoing, the Decision of the Court of Appeals in CA-G.R. CV No. 64166 is
AFFIRMED with MODIFICATION. Private respondent Gina S. Rey is declared co-owner of petitioner Jacinto Saguid in the
controverted house to the extent of P11,413.00 and personal properties to the extent of P55,687.50. Petitioner is ordered
to reimburse the amount of P67,100.50 to private respondent, failing which the house shall be sold at public auction to
satisfy private respondents claim.
SO ORDERED.
LUPO ATIENZA,
G.R. No. 169698
Petitioner,
Present:

- versus -

PUNO, J., Chairperson,


SANDOVAL-GUTIERREZ,
CORONA,
AZCUNA, and
GARCIA, JJ.
Promulgated:

November 29, 2006


YOLANDA DE CASTRO,
Respondent.
x------------------------------------------------------------------------------------------x

DECISION
GARCIA, J.:

Assailed and sought to be set aside in this petition for review on certiorari is the Decision dated April 29, 2005 of the Court
of Appeals (CA) in CA-G.R. CV No. 69797,as reiterated in its Resolution of September 16, 2005, reversing an earlier
decision of the Regional Trial Court (RTC) of Makati City, Branch 61, in an action for Judicial Partition of Real
Property thereat commenced by the herein petitioner Lupo Atienza against respondent Yolanda de Castro.
The facts:
Sometime in 1983, petitioner Lupo Atienza, then the President and General Manager of Enrico Shipping Corporation and
Eurasian Maritime Corporation, hired the services of respondent Yolanda U. De Castro as accountant for the two
corporations.
In the course of time, the relationship between Lupo and Yolanda became intimate.Despite Lupo being a married man, he
and Yolanda eventually lived together in consortium beginning the later part of 1983. Out of their union, two children were
born. However, after the birth of their second child, their relationship turned sour until they parted ways.
On May 28, 1992, Lupo filed in the RTC of Makati City a complaint against Yolanda for the judicial partition between them
of a parcel of land with improvements located in Bel-Air Subdivision, Makati City and covered by Transfer Certificate of
Title No. 147828 of the Registry of Deeds of Makati City. In his complaint, docketed in said court as Civil Case No. 921423, Lupo alleged that the subject property was acquired during his union with Yolanda as common-law husband and
wife, hence the property is co-owned by them.
Elaborating, Lupo averred in his complaint that the property in question was acquired by Yolanda sometime in 1987 using
his exclusive funds and that the title thereto was transferred by the seller in Yolandas name without his knowledge and

consent. He did not interpose any objection thereto because at the time, their affair was still thriving. It was only after their
separation and his receipt of information that Yolanda allowed her new live-in partner to live in the disputed property, when
he demanded his share thereat as a co-owner.
In her answer, Yolanda denied Lupos allegations. According to her, she acquired the same property for Two Million Six
Hundred Thousand Pesos (P2,600,000.00) using her exclusive funds. She insisted having bought it thru her own savings
and earnings as a businesswoman.
In a decision dated December 11, 2000, the trial court rendered judgment for Lupo by declaring the contested property as
owned in common by him and Yolanda and ordering its partition between the two in equal shares, thus:
WHEREFORE, judgment is hereby rendered declaring the property covered by Transfer Certificate of
Title No. 147828 of the Registry of Deeds of Makati City to be owned in common by plaintiff LUPO
ATIENZA and the defendant YOLANDA U. DE CASTRO share-and-share alike and ordering the partition
of said property between them. Upon the finality of this Decision, the parties are hereby directed to submit
for the confirmation of the Court a mutually agreed project of partition of said property or, in case the
physical partition of said property is not feasible because of its nature, that either the same be assigned to
one of the parties who shall pay the value corresponding to the share of the other or that the property to
be sold and the proceeds thereof be divided equally between the parties after deducting the expenses
incident to said sale.
The parties shall bear their own attorneys fees and expenses of litigation.
Costs against the defendant.
SO ORDERED.
From the decision of the trial court, Yolanda went on appeal to the CA in CA-G.R. CV No. 69797, therein arguing that the
evidence on record preponderate that she purchased the disputed property in her own name with her own money. She
maintained that the documents appertaining to her acquisition thereof are the best evidence to prove who actually bought
it, and refuted the findings of the trial court, as well as Lupos assertions casting doubt as to her financial capacity to
acquire the disputed property.
As stated at the threshold hereof, the appellate court, in its decision of April 29, 2005, reversed and set aside that
of the trial court and adjudged the litigated property as exclusively owned by Yolanda, to wit:
WHEREFORE, the foregoing considered, the assailed decision is herebyREVERSED and SET
ASIDE . The subject property is hereby declared to be exclusively owned by defendant-appellant Yolanda
U. De Castro. No costs.
SO ORDERED.
In decreeing the disputed property as exclusively owned by Yolanda, the CA ruled that under the provisions of Article 148
of the Family Code vis--vis the evidence on record and attending circumstances, Yolandas claim of sole ownership is
meritorious, as it has been substantiated by competent evidence. To the CA, Lupo failed to overcome the burden of
proving his allegation that the subject property was purchased by Yolanda thru his exclusive funds.
With his motion for reconsideration having been denied by the CA in its Resolution of September 16, 2005, Lupo
is now with this Court via the present recourse arguing that pursuant to Article 144 of the Civil Code, he was in no way
burdened to prove that he contributed to the acquisition of the subject property because with or without the contribution by
either partner, he is deemed a co-owner thereof, adding that under Article 484 of Civil Code, as long as the property
was acquired by either or both of themduring their extramarital union, such property would be legally owned by them in
common and governed by the rules on co-ownership, which apply in default of contracts, or special provisions.
We DENY.
It is not disputed that the parties herein were not capacitated to marry each other because petitioner Lupo Atienza was
validly married to another woman at the time of his cohabitation with the respondent. Their property regime, therefore, is
governed by Article 148 of the Family Code, which applies to bigamous marriages, adulterous relationships, relationships
in a state of concubinage, relationships where both man and woman are married to other persons, and multiple alliances
of the same married man.Under this regime, only the properties acquired by both of the parties through their actual joint
contribution of money, property, or industry shall be owned by them in common in proportion to their respective
contributions ... Proof of actual contribution is required.

As it is, the regime of limited co-ownership of property governing the union of parties who are not legally capacitated to
marry each other, but who nonetheless live together as husband and wife, applies to properties acquired during said
cohabitation in proportion to their respective contributions. Co-ownership will only be up to the extent of the proven actual
contribution of money, property or industry. Absent proof of the extent thereof, their contributions and corresponding
shares shall be presumed to be equal.
Here, although the adulterous cohabitation of the parties commenced in 1983, or way before the effectivity of the Family
Code on August 3, 1998, Article 148 thereof applies because this provision was intended precisely to fill up the hiatus in
Article 144 of the Civil Code. Before Article 148 of the Family Code was enacted, there was no provision governing
property relations of couples living in a state of adultery or concubinage. Hence, even if the cohabitation or the acquisition
of the property occurred before the Family Code took effect, Article 148 governs.
The applicable law being settled, we now remind the petitioner that here, as in other civil cases, the burden of proof rests
upon the party who, as determined by the pleadings or the nature of the case, asserts an affirmative issue. Contentions
must be proved by competent evidence and reliance must be had on the strength of the partys own evidence and not
upon the weakness of the opponents defense. The petitioner as plaintiff below is not automatically entitled to the relief
prayed for. The law gives the defendant some measure of protection as the plaintiff must still prove the allegations in the
complaint. Favorable relief can be granted only after the court is convinced that the facts proven by the plaintiff warrant
such relief. Indeed, the party alleging a fact has the burden of proving it and a mere allegation is not evidence.
It is the petitioners posture that the respondent, having no financial capacity to acquire the property in question, merely
manipulated the dollar bank accounts of his two (2) corporations to raise the amount needed therefor. Unfortunately for
petitioner, his submissions are burdened by the fact that his claim to the property contradicts duly written instruments, i.e.,
the Contract to Sell dated March 24, 1987, the Deed of Assignment of Redemption dated March 27, 1987 and the Deed of
Transfer dated April 27, 1987, all entered into by and between the respondent and the vendor of said property, to the
exclusion of the petitioner. As aptly pointed out by the CA:
Contrary to the disquisition of the trial court, [Lupo] failed to overcome this burden. Perusing the records
of the case, it is evident that the trial court committed errors of judgment in its findings of fact and
appreciation of evidence with regard to the source of the funds used for the purchase of the disputed
property and ultimately the rightful owner thereof. Factual findings of the trial court are indeed entitled to
respect and shall not be disturbed, unless some facts or circumstances of weight and substance have
been overlooked or misinterpreted that would otherwise materially affect the disposition of the case.
In making proof of his case, it is paramount that the best and most complete evidence be formally
entered. Rather than presenting proof of his actual contribution to the purchase money used as
consideration for the disputed property, [Lupo] diverted the burden imposed upon him to [Yolanda] by
painting her as a shrewd and scheming woman without the capacity to purchase any property. Instead of
proving his ownership, or the extent thereof, over the subject property, [Lupo] relegated his complaint to a
mere attack on the financial capacity of [Yolanda]. He presented documents pertaining to the ins and outs
of the dollar accounts of ENRICO and EURASIAN, which unfortunately failed to prove his actual
contribution in the purchase of the said property. The fact that [Yolanda] had a limited access to the funds
of the said corporations and had repeatedly withdrawn money from their bank accounts for their behalf do
not prove that the money she used in buying the disputed property, or any property for that matter, came
from said withdrawals.
As it is, the disquisition of the court a quo heavily rested on the apparent financial capacity of the parties.
On one side, there is [Lupo], a retired sea captain and the President and General Manager of two
corporations and on the other is [Yolanda], a Certified Public Accountant. Surmising that [Lupo] is
financially well heeled than [Yolanda], the court a quo concluded, sans evidence, that [Yolanda] had taken
advantage of [Lupo]. Clearly, the court a quo is in error. (Words in brackets supplied.)
As we see it, petitioners claim of co-ownership in the disputed property is without basis because not only did he fail to
substantiate his alleged contribution in the purchase thereof but likewise the very trail of documents pertaining to its
purchase as evidentiary proof redounds to the benefit of the respondent. In contrast, aside from his mere say so and
voluminous records of bank accounts, which sadly find no relevance in this case, the petitioner failed to overcome his
burden of proof. Allegations must be proven by sufficient evidence. Simply stated, he who alleges a fact has the burden of
proving it; mere allegation is not evidence.
True, the mere issuance of a certificate of title in the name of any person does not foreclose the possibility that the real
property covered thereby may be under co-ownership with persons not named in the certificate or that the registrant may
only be a trustee or that other parties may have acquired interest subsequent to the issuance of the certificate of title.
However, as already stated, petitioners evidence in support of his claim is either insufficient or immaterial to warrant the

trial courts finding that the disputed property falls under the purview of Article 148 of the Family Code. In contrast to
petitioners dismal failure to prove his cause, herein respondent was able to present preponderant evidence of her sole
ownership. There can clearly be no co-ownership when, as here, the respondent sufficiently established that she derived
the funds used to purchase the property from her earnings, not only as an accountant but also as a businesswoman
engaged in foreign currency trading, money lending and jewelry retail. She presented her clientele and the promissory
notes evincing substantial dealings with her clients. She also presented her bank account statements and bank
transactions, which reflect that she had the financial capacity to pay the purchase price of the subject property.
All told, the Court finds and so holds that the CA committed no reversible error in rendering the herein challenged decision
and resolution.
WHEREFORE, the instant petition is DENIED and the assailed issuances of the CA areAFFIRMED.
Costs against the petitioner.
SO ORDERED.
G.R. No. 159310
February 24, 2009
CAMILO F. BORROMEO, Petitioner,
vs.
ANTONIETTA O. DESCALLAR, Respondent.
DECISION
PUNO, C.J.:
What are the rights of an alien (and his successor-in-interest) who acquired real properties in the country as against his
former Filipina girlfriend in whose sole name the properties were registered under the Torrens system?
The facts are as follows:
Wilhelm Jambrich, an Austrian, arrived in the Philippines in 1983 after he was assigned by his employer, Simmering-Graz
Panker A.G., an Austrian company, to work at a project in Mindoro. In 1984, he transferred to Cebu and worked at the
Naga II Project of the National Power Corporation. There, he met respondent Antonietta Opalla-Descallar, a separated
mother of two boys who was working as a waitress at St. Moritz Hotel. Jambrich befriended respondent and asked her to
tutor him in English. In dire need of additional income to support her children, respondent agreed. The tutorials were held
in Antoniettas residence at a squatters area in Gorordo Avenue.
Jambrich and respondent fell in love and decided to live together in a rented house in Hernan Cortes, Mandaue City.
Later, they transferred to their own house and lots at Agro-Macro Subdivision, Cabancalan, Mandaue City. In the
Contracts to Sell dated November 18, 1985 and March 10, 1986 covering the properties, Jambrich and respondent were
referred to as the buyers. A Deed of Absolute Sale dated November 16, 1987 was likewise issued in their favor. However,
when the Deed of Absolute Sale was presented for registration before the Register of Deeds, registration was refused on
the ground that Jambrich was an alien and could not acquire alienable lands of the public domain. Consequently,
Jambrichs name was erased from the document. But it could be noted that his signature remained on the left hand
margin of page 1, beside respondents signature as buyer on page 3, and at the bottom of page 4 which is the last page.
Transfer Certificate of Title (TCT) Nos. 24790, 24791 and 24792 over the properties were issued in respondents name
alone.
Jambrich also formally adopted respondents two sons in Sp. Proc. No. 39-MAN, and per Decision of the Regional Trial
Court of Mandaue City dated May 5, 1988.
However, the idyll lasted only until April 1991. By then, respondent found a new boyfriend while Jambrich began to live
with another woman in Danao City. Jambrich supported respondents sons for only two months after the break up.
Jambrich met petitioner Camilo F. Borromeo sometime in 1986. Petitioner was engaged in the real estate business. He
also built and repaired speedboats as a hobby. In 1989, Jambrich purchased an engine and some accessories for his boat
from petitioner, for which he became indebted to the latter for about P150,000.00. To pay for his debt, he sold his rights
and interests in the Agro-Macro properties to petitioner for P250,000, as evidenced by a "Deed of Absolute
Sale/Assignment." On July 26, 1991, when petitioner sought to register the deed of assignment, he discovered that titles
to the three lots have been transferred in the name of respondent, and that the subject property has already been
mortgaged.
On August 2, 1991, petitioner filed a complaint against respondent for recovery of real property before the Regional Trial
Court of Mandaue City. Petitioner alleged that the Contracts to Sell dated November 18, 1985 and March 10, 1986 and
the Deed of Absolute Sale dated November 16, 1987 over the properties which identified both Jambrich and respondent
as buyers do not reflect the true agreement of the parties since respondent did not pay a single centavo of the purchase
price and was not in fact a buyer; that it was Jambrich alone who paid for the properties using his exclusive funds; that
Jambrich was the real and absolute owner of the properties; and, that petitioner acquired absolute ownership by virtue of
the Deed of Absolute Sale/Assignment dated July 11, 1991 which Jambrich executed in his favor.

In her Answer, respondent belied the allegation that she did not pay a single centavo of the purchase price. On the
contrary, she claimed that she "solely and exclusively used her own personal funds to defray and pay for the purchase
price of the subject lots in question," and that Jambrich, being an alien, was prohibited to acquire or own real property in
the Philippines.
At the trial, respondent presented evidence showing her alleged financial capacity to buy the disputed property with
money from a supposed copra business. Petitioner, in turn, presented Jambrich as his witness and documentary evidence
showing the substantial salaries which Jambrich received while still employed by the Austrian company, Simmering-Graz
Panker A.G.
In its decision, the court a quo found
Evidence on hand clearly show that at the time of the purchase and acquisition of [the] properties under litigation that
Wilhelm Jambrich was still working and earning much. This fact of Jambrich earning much is not only supported by
documentary evidence but also by the admission made by the defendant Antoniet[t]a Opalla. So that, Jambrichs financial
capacity to acquire and purchase the properties . . . is not disputed.
xxx
On the other hand, evidence . . . clearly show that before defendant met Jambrich sometime in the latter part of 1984, she
was only working as a waitress at the St. Moritz Hotel with an income of P1,000.00 a month and was . . . renting and living
only in . . . [a] room at . . . [a] squatter area at Gorordo Ave., Cebu City; that Jambrich took pity of her and the situation of
her children that he offered her a better life which she readily accepted. In fact, this miserable financial situation of hers
and her two children . . . are all stated and reflected in the Child Study Report dated April 20, 1983 (Exhs. "G" and "G-1")
which facts she supplied to the Social Worker who prepared the same when she was personally interviewed by her in
connection with the adoption of her two children by Wilhelm Jambrich. So that, if such facts were not true because these
are now denied by her . . . and if it was also true that during this time she was already earning as much as P8,000.00
to P9,000.00 as profit per month from her copra business, it would be highly unbelievable and impossible for her to be
living only in such a miserable condition since it is the observation of this Court that she is not only an extravagant but
also an expensive person and not thrifty as she wanted to impress this Court in order to have a big saving as clearly
shown by her actuation when she was already cohabiting and living with Jambrich that according to her . . . the allowance
given . . . by him in the amount of $500.00 a month is not enough to maintain the education and maintenance of her
children.
This being the case, it is highly improbable and impossible that she could acquire the properties under litigation or could
contribute any amount for their acquisition which according to her is worth more than P700,000.00 when while she was
working as [a] waitress at St. Moritz Hotel earning P1,000.00 a month as salary and tips of more or less P2,000.00 she
could not even provide [for] the daily needs of her family so much so that it is safe to conclude that she was really in
financial distress when she met and accepted the offer of Jambrich to come and live with him because that was a big
financial opportunity for her and her children who were already abandoned by her husband.
xxx
The only probable and possible reason why her name appeared and was included in [the contracts to sell dated
November 18, 1985 and March 10, 1986 and finally, the deed of absolute sale dated November 16, 1987] as buyer is
because as observed by the Court, she being a scheming and exploitive woman, she has taken advantage of the
goodness of Jambrich who at that time was still bewitched by her beauty, sweetness, and good attitude shown by her to
him since he could still very well provide for everything she needs, he being earning (sic) much yet at that time. In fact, as
observed by this Court, the acquisition of these properties under litigation was at the time when their relationship was still
going smoothly and harmoniously. [Emphasis supplied.]
The dispositive portion of the Decision states:
WHEREFORE, . . . Decision is hereby rendered in favor of the plaintiff and against the defendant Antoniet[t]a Opalla by:
1) Declaring plaintiff as the owner in fee simple over the residential house of strong materials and three parcels of
land designated as Lot Nos. 1, 3 and 5 which are covered by TCT Nos. 24790, 24791 and 24792 issued by the
Register of Deeds of Mandaue City;
2) Declaring as null and void TCT Nos. 24790, 24791 and 24792 issued in the name of defendant Antoniet[t]a
Descallar by the Register of Deeds of Mandaue City;
3) Ordering the Register of Deeds of Mandaue City to cancel TCT Nos. 24790, 24791 and 24792 in the name of
defendant Antoniet[t]a Descallar and to issue new ones in the name of plaintiff Camilo F. Borromeo;
4) Declaring the contracts now marked as Exhibits "I," "K" and "L" as avoided insofar as they appear to convey
rights and interests over the properties in question to the defendant Antoniet[t]a Descallar;
5) Ordering the defendant to pay plaintiff attorneys fees in the amount of P25,000.00 and litigation expenses in
the amount of P10,000.00; and,
6) To pay the costs.
Respondent appealed to the Court of Appeals. In a Decision dated April 10, 2002, the appellate court reversed the
decision of the trial court. In ruling for the respondent, the Court of Appeals held:

We disagree with the lower courts conclusion. The circumstances involved in the case cited by the lower court and similar
cases decided on by the Supreme Court which upheld the validity of the title of the subsequent Filipino purchasers are
absent in the case at bar. It should be noted that in said cases, the title to the subject property has been issued in the
name of the alien transferee (Godinez et al., vs. Fong Pak Luen et al., 120 SCRA 223 citing Krivenko vs. Register of
Deeds of Manila, 79 Phils. 461; United Church Board for World Ministries vs. Sebastian, 159 SCRA 446, citing the case of
Sarsosa Vda. De Barsobia vs. Cuenco, 113 SCRA 547; Tejido vs. Zamacoma, 138 SCRA 78). In the case at bar, the title
of the subject property is not in the name of Jambrich but in the name of defendant-appellant. Thus, Jambrich could not
have transferred a property he has no title thereto.
Petitioners motion for reconsideration was denied.
Hence, this petition for review.
Petitioner assigns the following errors:
I. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN DISREGARDING RESPONDENTS JUDICIAL
ADMISSION AND OTHER OVERWHELMING EVIDENCE ESTABLISHING JAMBRICHS PARTICIPATION, INTEREST
AND OWNERSHIP OF THE PROPERTIES IN QUESTION AS FOUND BY THE HONORABLE TRIAL COURT.
II. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT JAMBRICH HAS NO TITLE TO
THE PROPERTIES IN QUESTION AND MAY NOT THEREFORE TRANSFER AND ASSIGN ANY RIGHTS AND
INTERESTS IN FAVOR OF PETITIONER.
III. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN REVERSING THE WELL-REASONED DECISION
OF THE TRIAL COURT AND IN IMPOSING DOUBLE COSTS AGAINST HEREIN PETITIONER (THEN, PLAINTIFFAPPELLEE).
First, who purchased the subject properties?
The evidence clearly shows, as pointed out by the trial court, who between respondent and Jambrich possesses the
financial capacity to acquire the properties in dispute. At the time of the acquisition of the properties in 1985 to 1986,
Jambrich was gainfully employed at Simmering-Graz Panker A.G., an Austrian company. He was earning an estimated
monthly salary of P50,000.00. Then, Jambrich was assigned to Syria for almost one year where his monthly salary was
approximately P90,000.00.
On the other hand, respondent was employed as a waitress from 1984 to 1985 with a monthly salary of not more
than P1,000.00. In 1986, when the parcels of land were acquired, she was unemployed, as admitted by her during the
pre-trial conference. Her allegations of income from a copra business were unsubstantiated. The supposed copra
business was actually the business of her mother and their family, with ten siblings. She has no license to sell copra, and
had not filed any income tax return. All the motorized bancas of her mother were lost to fire, and the last one left standing
was already scrap. Further, the Child Study Report submitted by the Department of Social Welfare and Development
(DSWD) in the adoption proceedings of respondents two sons by Jambrich disclosed that:
Antonietta tried all types of job to support the children until she was accepted as a waitress at St. Moritz Restaurant in
1984. At first she had no problem with money because most of the customers of St. Moritz are (sic) foreigners and they
gave good tips but towards the end of 1984 there were no more foreigners coming because of the situation in the
Philippines at that time. Her financial problem started then. She was even renting a small room in a squatters area in
Gorordo Ave., Cebu City. It was during her time of great financial distress that she met Wilhelm Jambrich who later offered
her a decent place for herself and her children.
The DSWD Home Study Report further disclosed that:
[Jambrich] was then at the Restaurant of St. Moritz when he saw Antonietta Descallar, one of the waitresses of the said
Restaurants. He made friends with the girl and asked her to tutor him in [the] English language. Antonietta accepted the
offer because she was in need of additional income to support [her] 2 young children who were abandoned by their father.
Their session was agreed to be scheduled every afternoon at the residence of Antonietta in the squatters area in Gorordo
Avenue, Cebu City. The Austrian was observing the situation of the family particularly the children who were
malnourished. After a few months sessions, Mr. Jambrich offered to transfer the family into a decent place. He told
Antonietta that the place is not good for the children. Antonietta who was miserable and financially distressed at that time
accepted the offer for the sake of the children.
Further, the following additional pieces of evidence point to Jambrich as the source of fund used to purchase the three
parcels of land, and to construct the house thereon:
(1) Respondent Descallar herself affirmed under oath, during her re-direct examination and during the
proceedings for the adoption of her minor children, that Jambrich was the owner of the properties in question, but
that his name was deleted in the Deed of Absolute Sale because of legal constraints. Nonetheless, his signature
remained in the deed of sale, where he signed as buyer.
(2) The money used to pay the subject parcels of land in installments was in postdated checks issued by
Jambrich. Respondent has never opened any account with any bank. Receipts of the installment payments were
also in the name of Jambrich and respondent.
(3) In 1986-1987, respondent lived in Syria with Jambrich and her two children for ten months, where she was
completely under the support of Jambrich.

(4) Jambrich executed a Last Will and Testament, where he, as owner, bequeathed the subject properties to
respondent.
Thus, Jambrich has all authority to transfer all his rights, interests and participation over the subject properties to petitioner
by virtue of the Deed of Assignment he executed on July 11, 1991.
Well-settled is the rule that this Court is not a trier of facts. The findings of fact of the trial court are accorded great weight
and respect, if not finality by this Court, subject to a number of exceptions. In the instant case, we find no reason to disturb
the factual findings of the trial court. Even the appellate court did not controvert the factual findings of the trial court. They
differed only in their conclusions of law.
Further, the fact that the disputed properties were acquired during the couples cohabitation also does not help
respondent. The rule that co-ownership applies to a man and a woman living exclusively with each other as husband and
wife without the benefit of marriage, but are otherwise capacitated to marry each other, does not apply. In the instant case,
respondent was still legally married to another when she and Jambrich lived together. In such an adulterous relationship,
no co-ownership exists between the parties. It is necessary for each of the partners to prove his or her actual contribution
to the acquisition of property in order to be able to lay claim to any portion of it. Presumptions of co-ownership and equal
contribution do not apply.
Second, we dispose of the issue of registration of the properties in the name of respondent alone. Having found that the
true buyer of the disputed house and lots was the Austrian Wilhelm Jambrich, what now is the effect of registration of the
properties in the name of respondent?
It is settled that registration is not a mode of acquiring ownership. It is only a means of confirming the fact of its existence
with notice to the world at large. Certificates of title are not a source of right. The mere possession of a title does not make
one the true owner of the property. Thus, the mere fact that respondent has the titles of the disputed properties in her
name does not necessarily, conclusively and absolutely make her the owner. The rule on indefeasibility of title likewise
does not apply to respondent. A certificate of title implies that the title is quiet,and that it is perfect, absolute and
indefeasible. However, there are well-defined exceptions to this rule, as when the transferee is not a holder in good faith
and did not acquire the subject properties for a valuable consideration. This is the situation in the instant case.
Respondent did not contribute a single centavo in the acquisition of the properties. She had no income of her own at that
time, nor did she have any savings. She and her two sons were then fully supported by Jambrich.
Respondent argued that aliens are prohibited from acquiring private land. This is embodied in Section 7, Article XII of the
1987 Constitution, which is basically a reproduction of Section 5, Article XIII of the 1935 Constitution, and Section 14,
Article XIV of the 1973 Constitution. The capacity to acquire private land is dependent on the capacity "to acquire or hold
lands of the public domain." Private land may be transferred only to individuals or entities "qualified to acquire or hold
lands of the public domain." Only Filipino citizens or corporations at least 60% of the capital of which is owned by Filipinos
are qualified to acquire or hold lands of the public domain. Thus, as the rule now stands, the fundamental law explicitly
prohibits non-Filipinos from acquiring or holding title to private lands, except only by way of legal succession or if the
acquisition was made by a former natural-born citizen.
Therefore, in the instant case, the transfer of land from Agro-Macro Development Corporation to Jambrich, who is an
Austrian, would have been declared invalid if challenged, had not Jambrich conveyed the properties to petitioner who is a
Filipino citizen. In United Church Board for World Ministries v. Sebastian, the Court reiterated the consistent ruling in a
number of cases that if land is invalidly transferred to an alien who subsequently becomes a Filipino citizen or transfers it
to a Filipino, the flaw in the original transaction is considered cured and the title of the transferee is rendered valid.
Applying United Church Board for World Ministries, the trial court ruled in favor of petitioner, viz.:
[W]hile the acquisition and the purchase of (sic) Wilhelm Jambrich of the properties under litigation [were] void ab initio
since [they were] contrary to the Constitution of the Philippines, he being a foreigner, yet, the acquisition of these
properties by plaintiff who is a Filipino citizen from him, has cured the flaw in the original transaction and the title of the
transferee is valid.
The trial court upheld the sale by Jambrich in favor of petitioner and ordered the cancellation of the TCTs in the name of
respondent. It declared petitioner as owner in fee simple of the residential house of strong materials and three parcels of
land designated as Lot Nos. 1, 3 and 5, and ordered the Register of Deeds of Mandaue City to issue new certificates of
title in his name. The trial court likewise ordered respondent to pay petitioner P25,000 as attorneys fees and P10,000 as
litigation expenses, as well as the costs of suit.
We affirm the Regional Trial Court.
The rationale behind the Courts ruling in United Church Board for World Ministries, as reiterated in subsequent cases, is
this since the ban on aliens is intended to preserve the nations land for future generations of Filipinos, that aim is
achieved by making lawful the acquisition of real estate by aliens who became Filipino citizens by naturalization or those
transfers made by aliens to Filipino citizens. As the property in dispute is already in the hands of a qualified person, a
Filipino citizen, there would be no more public policy to be protected. The objective of the constitutional provision to keep
our lands in Filipino hands has been achieved.
IN VIEW WHEREOF, the petition is GRANTED. The Decision of the Court of Appeals in C.A. G.R. CV No. 42929 dated
April 10, 2002 and its Resolution dated July 8, 2003 are REVERSED and SET ASIDE. The Decision of the Regional Trial
Court of Mandaue City in Civil Case No. MAN-1148 is REINSTATED.

SO ORDERED.
FIRST DIVISION
G.R. No. 171914, July 23, 2014
SOLEDAD L. LAVADIA, Petitioner, v. HEIRS OF JUAN LUCES LUNA, REPRESENTED BY GREGORIO Z. LUNA AND
EUGENIA ZABALLERO-LUNA, Respondents.
DECISION
The Case
The petitioner, the second wife of the late Atty. Juan Luces Luna, appeals the adverse decision promulgated on November
11, 2005, whereby the Court of Appeals (CA) affirmed with modification the decision rendered on August 27, 2001 by the
Regional Trial Court (RTC), Branch 138, in Makati City. The CA thereby denied her right in the 25/100 pro indiviso share of
the husband in a condominium unit, and in the law books of the husband acquired during the second marriage.
Antecedents
The antecedent facts were summarized by the CA as follows:
ATTY. LUNA, a practicing lawyer, was at first a name partner in the prestigious law firm Sycip, Salazar, Luna, Manalo,
Hernandez & Feliciano Law Offices at that time when he was living with his first wife, herein intervenor-appellant Eugenia
Zaballero-Luna (EUGENIA), whom he initially married in a civil ceremony conducted by the Justice of the Peace of
Paraaque, Rizal on September 10, 1947 and later solemnized in a church ceremony at the Pro-Cathedral in San Miguel,
Bulacan on September 12, 1948. In ATTY. LUNAs marriage to EUGENIA, they begot seven (7) children, namely: Regina
Maria L. Nadal, Juan Luis Luna, Araceli Victoria L. Arellano, Ana Maria L. Tabunda, Gregorio Macario Luna, Carolina
Linda L. Tapia, and Cesar Antonio Luna. After almost two (2) decades of marriage, ATTY. LUNA and EUGENIA eventually
agreed to live apart from each other in February 1966 and agreed to separation of property, to which end, they entered
into a written agreement entitled AGREEMENT FOR SEPARATION AND PROPERTY SETTLEMENT dated November
12, 1975, whereby they agreed to live separately and to dissolve and liquidate their conjugal partnership of property.
On January 12, 1976, ATTY. LUNA obtained a divorce decree of his marriage with EUGENIA from the Civil and
Commercial Chamber of the First Circumscription of the Court of First Instance of Sto. Domingo, Dominican Republic.
Also in Sto. Domingo, Dominican Republic, on the same date, ATTY. LUNA contracted another marriage, this time with
SOLEDAD. Thereafter, ATTY. LUNA and SOLEDAD returned to the Philippines and lived together as husband and wife
until
1987.
Sometime in 1977, ATTY. LUNA organized a new law firm named: Luna, Puruganan, Sison and Ongkiko (LUPSICON)
where
ATTY.
LUNA
was
the
managing
partner.
On February 14, 1978, LUPSICON through ATTY. LUNA purchased from Tandang Sora Development Corporation the 6th
Floor of Kalaw-Ledesma Condominium Project (condominium unit) at Gamboa St., Makati City, consisting of 517.52
square meters, for P1,449,056.00, to be paid on installment basis for 36 months starting on April 15, 1978. Said
condominium unit was to be used as law office of LUPSICON. After full payment, the Deed of Absolute Sale over the
condominium unit was executed on July 15, 1983, and CCT No. 4779 was issued on August 10, 1983, which was
registered bearing the following names:
JUAN LUCES LUNA, married to Soledad L. Luna (46/100); MARIO E. ONGKIKO, married to Sonia P.G. Ongkiko
(25/100); GREGORIO R. PURUGANAN, married to Paz A. Puruganan (17/100); and TERESITA CRUZ SISON, married to
Antonio J.M. Sison (12/100) x x x
Subsequently, 8/100 share of ATTY. LUNA and 17/100 share of Atty. Gregorio R. Puruganan in the condominium unit was
sold to Atty. Mario E. Ongkiko, for which a new CCT No. 21761 was issued on February 7, 1992 in the following names:
JUAN LUCES LUNA, married to Soledad L. Luna (38/100); MARIO E. ONGKIKO, married to Sonia P.G. Ongkiko
(50/100); TERESITA CRUZ SISON, married to Antonio J.M. Sison (12/100) x x x
Sometime in 1992, LUPSICON was dissolved and the condominium unit was partitioned by the partners but the same
was still registered in common under CCT No. 21716. The parties stipulated that the interest of ATTY. LUNA over the
condominium
unit
would
be
25/100
share.
ATTY. LUNA thereafter established and headed another law firm with Atty. Renato G. De la Cruz and used a portion of the
office condominium unit as their office. The said law firm lasted until the death of ATTY. JUAN on July 12, 1997.
After the death of ATTY. JUAN, his share in the condominium unit including the lawbooks, office furniture and equipment

found therein were taken over by Gregorio Z. Luna, ATTY. LUNAs son of the first marriage. Gregorio Z. Luna then leased
out the 25/100 portion of the condominium unit belonging to his father to Atty. Renato G. De la Cruz who established his
own
law
firm
named
Renato
G.
De
la
Cruz
&
Associates.
The 25/100 pro-indiviso share of ATTY. Luna in the condominium unit as well as the law books, office furniture and
equipment became the subject of the complaint filed by SOLEDAD against the heirs of ATTY. JUAN with the RTC of
Makati City, Branch 138, on September 10, 1999, docketed as Civil Case No. 99-1644. The complaint alleged that the
subject properties were acquired during the existence of the marriage between ATTY. LUNA and SOLEDAD through their
joint efforts that since they had no children, SOLEDAD became co-owner of the said properties upon the death of ATTY.
LUNA to the extent of pro-indiviso share consisting of her share in the said properties plus her share in the net
estate of ATTY. LUNA which was bequeathed to her in the latters last will and testament; and that the heirs of ATTY.
LUNA through Gregorio Z. Luna excluded SOLEDAD from her share in the subject properties. The complaint prayed that
SOLEDAD be declared the owner of the portion of the subject properties; that the same be partitioned; that an
accounting of the rentals on the condominium unit pertaining to the share of SOLEDAD be conducted; that a receiver be
appointed to preserve ad administer the subject properties; and that the heirs of ATTY. LUNA be ordered to pay attorneys
fees and costs of the suit to SOLEDAD.

Ruling of the RTC


On August 27, 2001, the RTC rendered its decision after trial upon the aforementioned facts, disposing thusly:
WHEREFORE,

judgment

is

rendered

as

follows:

(a) The 24/100 pro-indiviso share in the condominium unit located at the SIXTH FLOOR of the KALAW LEDESMA
CONDOMINIUM PROJECT covered by Condominium Certificate of Title No. 21761 consisting of FIVE HUNDRED
SEVENTEEN (517/100) SQUARE METERS is adjudged to have been acquired by Juan Lucas Luna through his sole
industry;
(b) Plaintiff has no right as owner or under any other concept over the condominium unit, hence the entry in Condominium
Certificate of Title No. 21761 of the Registry of Deeds of Makati with respect to the civil status of Juan Luces Luna should
be changed from JUAN LUCES LUNA married to Soledad L. Luna to JUAN LUCES LUNA married to Eugenia Zaballero
Luna;
(c) Plaintiff is declared to be the owner of the books Corpus Juris, Fletcher on Corporation, American Jurisprudence and
Federal Supreme Court Reports found in the condominium unit and defendants are ordered to deliver them to the plaintiff
as
soon
as
appropriate
arrangements
have
been
made
for
transport
and
storage.
No

pronouncement

as

to

costs.

SO ORDERED.

Decision of the CA
Both parties appealed to the CA.
On her part, the petitioner assigned the following errors to the RTC, namely:

I.

THE LOWER COURT ERRED IN RULING THAT THE CONDOMINIUM UNIT WAS ACQUIRED THRU
THE SOLE INDUSTRY OF ATTY. JUAN LUCES LUNA;

II.

THE LOWER COURT ERRED IN RULING THAT PLAINTIFF-APPELLANT DID NOT CONTRIBUTE
MONEY FOR THE ACQUISITION OF THE CONDOMINIUM UNIT;

III.

THE LOWER COURT ERRED IN GIVING CREDENCE TO PORTIONS OF THE TESTIMONY OF


GREGORIO LUNA, WHO HAS NO ACTUAL KNOWLEDGE OF THE ACQUISITION OF THE UNIT, BUT
IGNORED OTHER PORTIONS OF HIS TESTIMONY FAVORABLE TO THE PLAINTIFF-APPELLANT;

IV.

THE LOWER COURT ERRED IN NOT GIVING SIGNIFICANCE TO THE FACT THAT THE CONJUGAL
PARTNERSHIP BETWEEN LUNA AND INTERVENOR-APPELLANT WAS ALREADY DISSOLVED AND
LIQUIDATED PRIOR TO THE UNION OF PLAINTIFF-APPELLANT AND LUNA;

V.

THE LOWER COURT ERRED IN GIVING UNDUE SIGNIFICANCE TO THE ABSENCE OF THE
DISPOSITION OF THE CONDOMINIUM UNIT IN THE HOLOGRAPHIC WILL OF THE PLAINTIFFAPPELLANT;

VI.

THE LOWER COURT ERRED IN GIVING UNDUE SIGNIFICANCE TO THE FACT THAT THE NAME OF
PLAINTIFF-APPELLANT DID NOT APPEAR IN THE DEED OF ABSOLUTE SALE EXECUTED BY
TANDANG SORA DEVELOPMENT CORPORATION OVER THE CONDOMINIUM UNIT;

VII.

THE LOWER COURT ERRED IN RULING THAT NEITHER ARTICLE 148 OF THE FAMILY CODE NOR
ARTICLE 144 OF THE CIVIL CODE OF THE PHILIPPINES ARE APPLICABLE;

VIII.

THE LOWER COURT ERRED IN NOT RULING THAT THE CAUSE OF ACTION OF THE INTERVENORAPPELLANT HAS BEEN BARRED BY PESCRIPTION AND LACHES; and

IX.

THE LOWER COURT ERRED IN NOT EXPUNGING/DISMISSING THE INTERVENTION FOR FAILURE
OF INTERVENOR-APPELLANT TO PAY FILING FEE.

In contrast, the respondents attributed the following errors to the trial court, to wit:

I.

THE LOWER COURT ERRED IN HOLDING THAT CERTAIN FOREIGN LAW BOOKS IN THE LAW
OFFICE OF ATTY. LUNA WERE BOUGHT WITH THE USE OF PLAINTIFFS MONEY;

II.

THE LOWER COURT ERRED IN HOLDING THAT PLAINTIFF PROVED BY PREPONDERANCE OF


EVIDENCE (HER CLAIM OVER) THE SPECIFIED FOREIGN LAW BOOKS FOUND IN ATTY. LUNAS
LAW OFFICE; and

III.

THE LOWER COURT ERRED IN NOT HOLDING THAT, ASSUMING PLAINTIFF PAID FOR THE SAID
FOREIGN LAW BOOKS, THE RIGHT TO RECOVER THEM HAD PRESCRIBED AND BARRED BY
LACHES AND ESTOPPEL.

On November 11, 2005, the CA promulgated its assailed modified decision, holding and ruling:
EUGENIA, the first wife, was the legitimate wife of ATTY. LUNA until the latters death on July 12, 1997. The absolute
divorce decree obtained by ATTY. LUNA in the Dominican Republic did not terminate his prior marriage with EUGENIA
because foreign divorce between Filipino citizens is not recognized in our jurisdiction. x x x
x

WHEREFORE, premises considered, the assailed August 27, 2001 Decision of the RTC of Makati City, Branch 138, is
hereby MODIFIED as follows:
(a) The 25/100 pro-indiviso share in the condominium unit at the SIXTH FLOOR of the KALAW LEDESMA
CONDOMINIUM PROJECT covered by Condominium Certificate of Title No. 21761 consisting of FIVE HUNDRED
SEVENTEEN (517/100) (sic) SQUARE METERS is hereby adjudged to defendants-appellants, the heirs of Juan Luces
Luna and Eugenia Zaballero-Luna (first marriage), having been acquired from the sole funds and sole industry of Juan
Luces Luna while marriage of Juan Luces Luna and Eugenia Zaballero-Luna (first marriage) was still subsisting and valid;
(b) Plaintiff-appellant Soledad Lavadia has no right as owner or under any other concept over the condominium unit,
hence the entry in Condominium Certificate of Title No. 21761 of the Registry of Deeds of Makati with respect to the civil
status of Juan Luces Luna should be changed from JUAN LUCES LUNA married to Soledad L. Luna to JUAN LUCES
LUNA
married
to
Eugenia
Zaballero
Luna;
(c) Defendants-appellants, the heirs of Juan Luces Luna and Eugenia Zaballero-Luna (first marriage) are hereby declared
to be the owner of the books Corpus Juris, Fletcher on Corporation, American Jurisprudence and Federal Supreme Court
Reports
found
in
the
condominium
unit.

No pronouncement as to costs.
SO ORDERED.
On March 13, 2006, the CA denied the petitioners motion for reconsideration.
Issues
In this appeal, the petitioner avers in her petition for review on certiorari that:

A. The Honorable Court of Appeals erred in ruling that the Agreement for Separation and Property
Settlement executed by Luna and Respondent Eugenia was unenforceable; hence, their conjugal
partnership was not dissolved and liquidated;
B. The Honorable Court of Appeals erred in not recognizing the Dominican Republic courts approval of the
Agreement;
C. The Honorable Court of Appeals erred in ruling that Petitioner failed to adduce sufficient proof of actual
contribution to the acquisition of purchase of the subject condominium unit; and
D. The Honorable Court of Appeals erred in ruling that Petitioner was not entitled to the subject law books.
The decisive question to be resolved is who among the contending parties should be entitled to the 25/100pro
indiviso share in the condominium unit; and to the law books (i.e., Corpus Juris, Fletcher on Corporation, American
Jurisprudence and Federal Supreme Court Reports).
The resolution of the decisive question requires the Court to ascertain the law that should determine, firstly, whether the
divorce between Atty. Luna and Eugenia Zaballero-Luna (Eugenia) had validly dissolved the first marriage; and, secondly,
whether the second marriage entered into by the late Atty. Luna and the petitioner entitled the latter to any rights in
property.
Ruling of the Court
We affirm the modified decision of the CA.
1.
Atty. Lunas first marriage with Eugenia
subsisted up to the time of his death
The first marriage between Atty. Luna and Eugenia, both Filipinos, was solemnized in the Philippines on September 10,
1947. The law in force at the time of the solemnization was the Spanish Civil Code, which adopted the nationality rule.
The Civil Code continued to follow the nationality rule, to the effect that Philippine laws relating to family rights and duties,
or to the status, condition and legal capacity of persons were binding upon citizens of the Philippines, although living
abroad. Pursuant to the nationality rule, Philippine laws governed this case by virtue of both Atty. Luna and Eugenio
having remained Filipinos until the death of Atty. Luna on July 12, 1997 terminated their marriage.
From the time of the celebration of the first marriage on September 10, 1947 until the present, absolute divorce between
Filipino spouses has not been recognized in the Philippines. The non-recognition of absolute divorce between Filipinos
has remained even under the Family Code, even if either or both of the spouses are residing abroad. Indeed, the only two
types of defective marital unions under our laws have been the void and the voidable marriages. As such, the remedies
against such defective marriages have been limited to the declaration of nullity of the marriage and the annulment of the
marriage.
It is true that on January 12, 1976, the Court of First Instance (CFI) of Sto. Domingo in the Dominican Republic issued the
Divorce Decree dissolving the first marriage of Atty. Luna and Eugenia. Conformably with the nationality rule, however, the
divorce, even if voluntarily obtained abroad, did not dissolve the marriage between Atty. Luna and Eugenia, which

subsisted up to the time of his death on July 12, 1997. This finding conforms to the Constitution, which characterizes
marriage as an inviolable social institution,and regards it as a special contract of permanent union between a man and a
woman for the establishment of a conjugal and family life. The non-recognition of absolute divorce in the Philippines is a
manifestation of the respect for the sanctity of the marital union especially among Filipino citizens. It affirms that the
extinguishment of a valid marriage must be grounded only upon the death of either spouse, or upon a ground expressly
provided by law. For as long as this public policy on marriage between Filipinos exists, no divorce decree dissolving the
marriage between them can ever be given legal or judicial recognition and enforcement in this jurisdiction.
2.
The Agreement for Separation and Property Settlement
was void for lack of court approval
The petitioner insists that the Agreement for Separation and Property Settlement (Agreement) that the late Atty. Luna and
Eugenia had entered into and executed in connection with the divorce proceedings before the CFI of Sto. Domingo in the
Dominican Republic to dissolve and liquidate their conjugal partnership was enforceable against Eugenia. Hence, the CA
committed reversible error in decreeing otherwise.
The insistence of the petitioner was unwarranted.
Considering that Atty. Luna and Eugenia had not entered into any marriage settlement prior to their marriage on
September 10, 1947, the system of relative community or conjugal partnership of gains governed their property relations.
This is because the Spanish Civil Code, the law then in force at the time of their marriage, did not specify the property
regime of the spouses in the event that they had not entered into any marriage settlement before or at the time of the
marriage. Article 119 of the Civil Codeclearly so provides, to wit:
Article 119. The future spouses may in the marriage settlements agree upon absolute or relative community of
property, or upon complete separation of property, or upon any other regime. In the absence of marriage
settlements, or when the same are void, the system of relative community or conjugal partnership of gains as
established in this Code, shall govern the property relations between husband and wife.
Article 142 of the Civil Code has defined a conjugal partnership of gains thusly:
Article 142. By means of the conjugal partnership of gains the husband and wife place in a common fund the fruits of their
separate property and the income from their work or industry, and divide equally, upon the dissolution of the marriage or of
the partnership, the net gains or benefits obtained indiscriminately by either spouse during the marriage.
The conjugal partnership of gains subsists until terminated for any of various causes of termination enumerated in Article
175 of the Civil Code, viz:
Article
(1)
(2)
(3)

175.

The

Upon
When

the
there

When

conjugal

partnership
death

is
the

of
of

decree
marriage

gains
either

of

legal
is

terminates:
spouse;
separation;
annulled;

(4) In case of judicial separation of property under Article 191.


The mere execution of the Agreement by Atty. Luna and Eugenia did not per se dissolve and liquidate their conjugal
partnership of gains. The approval of the Agreement by a competent court was still required under Article 190 and Article
191 of the Civil Code, as follows:
Article 190. In the absence of an express declaration in the marriage settlements, the separation of property between
spouses during the marriage shall not take place save in virtue of a judicial order. (1432a)
Article 191. The husband or the wife may ask for the separation of property, and it shall be decreed when the spouse of

the petitioner has been sentenced to a penalty which carries with it civil interdiction, or has been declared absent, or when
legal
separation
has
been
granted.
x

The husband and the wife may agree upon the dissolution of the conjugal partnership during the marriage, subject to
judicial approval. All the creditors of the husband and of the wife, as well as of the conjugal partnership shall be notified
of any petition for judicial approval or the voluntary dissolution of the conjugal partnership, so that any such creditors may
appear at the hearing to safeguard his interests. Upon approval of the petition for dissolution of the conjugal partnership,
the court shall take such measures as may protect the creditors and other third persons.
After dissolution of the conjugal partnership, the provisions of articles 214 and 215 shall apply. The provisions of this Code
concerning the effect of partition stated in articles 498 to 501 shall be applicable. (1433a)
But was not the approval of the Agreement by the CFI of Sto. Domingo in the Dominican Republic sufficient in dissolving
and liquidating the conjugal partnership of gains between the late Atty. Luna and Eugenia?
The query is answered in the negative. There is no question that the approval took place only as an incident of the action
for divorce instituted by Atty. Luna and Eugenia, for, indeed, the justifications for their execution of the Agreement were
identical to the grounds raised in the action for divorce. With the divorce not being itself valid and enforceable under
Philippine law for being contrary to Philippine public policy and public law, the approval of the Agreement was not also
legally valid and enforceable under Philippine law. Consequently, the conjugal partnership of gains of Atty. Luna and
Eugenia subsisted in the lifetime of their marriage.
3.
Atty. Lunas marriage with Soledad, being bigamous,
was void; properties acquired during their marriage
were governed by the rules on co-ownership
What law governed the property relations of the second marriage between Atty. Luna and Soledad?
The CA expressly declared that Atty. Lunas subsequent marriage to Soledad on January 12, 1976 was void for being
bigamous, on the ground that the marriage between Atty. Luna and Eugenia had not been dissolved by the Divorce
Decree rendered by the CFI of Sto. Domingo in the Dominican Republic but had subsisted until the death of Atty. Luna on
July 12, 1997.
The Court concurs with the CA.
In the Philippines, marriages that are bigamous, polygamous, or incestuous are void. Article 71 of the Civil Code clearly
states:
Article 71. All marriages performed outside the Philippines in accordance with the laws in force in the country where they
were performed, and valid there as such, shall also be valid in this country, except bigamous, polygamous, or
incestuous marriages as determined by Philippine law.
Bigamy is an illegal marriage committed by contracting a second or subsequent marriage before the first marriage has
been legally dissolved, or before the absent spouse has been declared presumptively dead by means of a judgment
rendered in the proper proceedings. A bigamous marriage is considered voidab initio.
Due to the second marriage between Atty. Luna and the petitioner being void ab initio by virtue of its being bigamous, the
properties acquired during the bigamous marriage were governed by the rules on co-ownership, conformably with Article
144 of the Civil Code, viz:
Article 144. When a man and a woman live together as husband and wife, but they are not married, or their marriage is
void from the beginning, the property acquired by either or both of them through their work or industry or their wages and
salaries shall be governed by the rules on co-ownership.(n)

In such a situation, whoever alleges co-ownership carried the burden of proof to confirm such fact. To establish coownership, therefore, it became imperative for the petitioner to offer proof of her actual contributions in the acquisition of
property. Her mere allegation of co-ownership, without sufficient and competent evidence, would warrant no relief in her
favor. As the Court explained in Saguid v. Court of Appeals:
In the cases of Agapay v. Palang, and Tumlos v. Fernandez, which involved the issue of co-ownership of properties
acquired by the parties to a bigamous marriage and an adulterous relationship, respectively, we ruled that proof of actual
contribution in the acquisition of the property is essential. The claim of co-ownership of the petitioners therein who were
parties to the bigamous and adulterous union is without basis because they failed to substantiate their allegation that they
contributed money in the purchase of the disputed properties. Also in Adriano v. Court of Appeals, we ruled that the fact
that the controverted property was titled in the name of the parties to an adulterous relationship is not sufficient proof of
co-ownership
absent
evidence
of
actual
contribution
in
the
acquisition
of
the
property.
As in other civil cases, the burden of proof rests upon the party who, as determined by the pleadings or the nature of the
case, asserts an affirmative issue. Contentions must be proved by competent evidence and reliance must be had on the
strength of the partys own evidence and not upon the weakness of the opponents defense. This applies with more vigor
where, as in the instant case, the plaintiff was allowed to present evidence ex parte.The plaintiff is not automatically
entitled to the relief prayed for. The law gives the defendant some measure of protection as the plaintiff must still prove the
allegations in the complaint. Favorable relief can be granted only after the court is convinced that the facts proven by the
plaintiff warrant such relief. Indeed, the party alleging a fact has the burden of proving it and a mere allegation is not
evidence.
The petitioner asserts herein that she sufficiently proved her actual contributions in the purchase of the condominium unit
in the aggregate amount of at least P306,572.00, consisting in direct contributions of P159,072.00, and in repaying the
loans Atty. Luna had obtained from Premex Financing and Banco Filipino totaling P146,825.30; and that such aggregate
contributions of P306,572.00 corresponded to almost the entire share of Atty. Luna in the purchase of the condominium
unit amounting to P362,264.00 of the units purchase price of P1,449,056.00.
The petitioner further asserts that the lawbooks were paid for solely out of her personal funds, proof of which Atty. Luna
had even sent her a thank you note; that she had the financial capacity to make the contributions and purchases; and
that Atty. Luna could not acquire the properties on his own due to the meagerness of the income derived from his law
practice.
Did the petitioner discharge her burden of proof on the co-ownership?
In resolving the question, the CA entirely debunked the petitioners assertions on her actual contributions through the
following findings and conclusions, namely:
SOLEDAD was not able to prove by preponderance of evidence that her own independent funds were used to buy the law
office condominium and the law books subject matter in contention in this case proof that was required for Article 144 of
the New Civil Code and Article 148 of the Family Code to apply as to cases where properties were acquired by a man
and a woman living together as husband and wife but not married, or under a marriage which was void ab initio. Under
Article 144 of the New Civil Code, the rules on co-ownership would govern. But this was not readily applicable to many
situations and thus it created a void at first because it applied only if the parties were not in any way incapacitated or were
without impediment to marry each other (for it would be absurd to create a co-ownership where there still exists a prior
conjugal partnership or absolute community between the man and his lawful wife). This void was filled upon adoption of
the Family Code. Article 148 provided that: only the property acquired by both of the parties through their actual joint
contribution of money, property or industry shall be owned in common and in proportion to their respective contributions.
Such contributions and corresponding shares were prima facie presumed to be equal. However, for this presumption to
arise, proof of actual contribution was required. The same rule and presumption was to apply to joint deposits of
money and evidence of credit. If one of the parties was validly married to another, his or her share in the co-ownership
accrued to the absolute community or conjugal partnership existing in such valid marriage. If the party who acted in bad
faith was not validly married to another, his or her share shall be forfeited in the manner provided in the last paragraph of
the Article 147. The rules on forfeiture applied even if both parties were in bad faith.
Co-ownership was the exception while conjugal partnership of gains was the strict rule whereby marriage was an
inviolable social institution and divorce decrees are not recognized in the Philippines, as was held by the Supreme Court
in the case of Tenchavez vs. Escao, G.R. No. L-19671, November 29, 1965, 15 SCRA 355, thus:

As to the 25/100 pro-indiviso share of ATTY. LUNA in the condominium unit, SOLEDAD failed to prove that she made an
actual contribution to purchase the said property. She failed to establish that the four (4) checks that she presented were
indeed used for the acquisition of the share of ATTY. LUNA in the condominium unit. This was aptly explained in the
Decision of the trial court, viz.:
x x x The first check, Exhibit M for P55,000.00 payable to Atty. Teresita Cruz Sison was issued on January 27, 1977,
which was thirteen (13) months before the Memorandum of Agreement, Exhibit 7 was signed. Another check issued on
April 29, 1978 in the amount of P97,588.89, Exhibit P was payable to Banco Filipino. According to the plaintiff, this was
in payment of the loan of Atty. Luna. The third check which was for P49,236.00 payable to PREMEX was dated May 19,
1979, also for payment of the loan of Atty. Luna. The fourth check, Exhibit M, for P4,072.00 was dated December 17,
1980. None of the foregoing prove that the amounts delivered by plaintiff to the payees were for the acquisition of the
subject condominium unit. The connection was simply not established. x x x
SOLEDADs claim that she made a cash contribution of P100,000.00 is unsubstantiated. Clearly, there is no basis for
SOLEDADs claim of co-ownership over the 25/100 portion of the condominium unit and the trial court correctly found that
the same was acquired through the sole industry of ATTY. LUNA, thus:
The Deed of Absolute Sale, Exhibit 9, covering the condominium unit was in the name of Atty. Luna, together with his
partners in the law firm. The name of the plaintiff does not appear as vendee or as the spouse of Atty. Luna. The same
was acquired for the use of the Law firm of Atty. Luna. The loans from Allied Banking Corporation and Far East Bank and
Trust Company were loans of Atty. Luna and his partners and plaintiff does not have evidence to show that she paid for
them fully or partially. x x x
The fact that CCT No. 4779 and subsequently, CCT No. 21761 were in the name of JUAN LUCES LUNA, married to
Soledad L. Luna was no proof that SOLEDAD was a co-owner of the condominium unit. Acquisition of title and
registration thereof are two different acts. It is well settled that registration does not confer title but merely confirms one
already existing. The phrase married to preceding Soledad L. Luna is merely descriptive of the civil status of ATTY.
LUNA.
SOLEDAD, the second wife, was not even a lawyer. So it is but logical that SOLEDAD had no participation in the law firm
or in the purchase of books for the law firm. SOLEDAD failed to prove that she had anything to contribute and that she
actually purchased or paid for the law office amortization and for the law books. It is more logical to presume that it was
ATTY. LUNA who bought the law office space and the law books from his earnings from his practice of law rather than
embarrassingly beg or ask from SOLEDAD money for use of the law firm that he headed.
The Court upholds the foregoing findings and conclusions by the CA both because they were substantiated by the records
and because we have not been shown any reason to revisit and undo them. Indeed, the petitioner, as the party claiming
the co-ownership, did not discharge her burden of proof. Her mere allegations on her contributions, not being
evidence, did not serve the purpose. In contrast, given the subsistence of the first marriage between Atty. Luna and
Eugenia, the presumption that Atty. Luna acquired the properties out of his own personal funds and effort remained. It
should then be justly concluded that the properties in litis legally pertained to their conjugal partnership of gains as of the
time of his death. Consequently, the sole ownership of the 25/100 pro indiviso share of Atty. Luna in the condominium unit,
and of the lawbooks pertained to the respondents as the lawful heirs of Atty. Luna.
WHEREFORE, the Court AFFIRMS the decision promulgated on November 11, 2005; and ORDERS the petitioner to pay
the costs of suit.
SO ORDERED.