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359 Phil.

519

FIRST DIVISION
G.R. No. 102330, November 25, 1998
TERESITA C. FRANCISCO, PETITIONER, VS. HON.
COURT OF APPEALS; AND CONCHITA EVANGELISTA
AND HER HUSBAND SIMEON EVANGELISTA;
ARACELI F. MARILLA AND HER HUSBAND FREDDY
MARILLA; ANTONIO V. FRANCISCO; AND EUSEBIO
FRANCISCO, RESPONDENTS.
DECISION

QUISUMBING, J.:
This petition for review on certiorari seeks to reverse
respondent appellate courts decision[1] promulgated
on October 7, 1991, affirming in toto the judgment of
the Regional Trial Court which ruled,[2] thus:
"WHEREFORE, premises considered, this Court
renders judgment in favor of the defendants and
against the plaintiff, as follows:
1) Ordering the dismissal of the Complaint with costs
against the plaintiff;
2) Declaring the defendant Eusebio Francisco the
administrator of the properties described in
paragraph eight (8) of the Complaint; and

3) Sentencing the plaintiff to pay the defendants the


sum of P10,000.00 as and for attorneys fees.
SO ORDERED."
Petitioner is the legal wife of private respondent
Eusebio Francisco (Eusebio) by his second marriage.
Private respondents Conchita Evangelista, Araceli F.
Marilla and Antonio Francisco are children of Eusebio
by his first marriage.
Petitioner alleges that since their marriage on
February 10, 1962, she and Eusebio have acquired
the following: (1) a sari-sari store, a residential house
and lot, and an apartment house, all situated at Col.
S. Cruz St., Barangay Balite, Rodriguez (formerly
Montalban), Rizal, and; (2) a house and lot at Barrio
San Isidro, Rodriguez, Rizal. Petitioner further avers
that these properties were administered by Eusebio
until he was invalidated on account of tuberculosis,
heart disease and cancer, thereby, rendering him
unfit to administer them. Petitioner also claims that
private respondents succeeded in convincing their
father to sign a general power of attorney which
authorized Conchita Evangelista to administer the
house and lot together with the apartments situated
in Rodriguez, Rizal.
On August 31, 1988, petitioner filed a suit for
damages and for annulment of said general power of

attorney, and thereby enjoining its enforcement.


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

But in her reply, petitioner posed the sole issue


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

resolve the issue of the nature of the contested


properties based on the provisions of the New Civil
Code.
Petitioner contends that the subject properties are
conjugal, thus, she should administer these on
account of the incapacity of her husband. On the
other hand, private respondents maintain that the
assets in controversy claimed by petitioner as
"conjugal" are capital properties of Eusebio
exclusively as these were acquired by the latter either
through inheritance or through his industry prior to
his second marriage. Moreover, they stress that
Eusebio is not incapacitated contrary to petitioners
allegation.
We find petitioners contention lacks merit, as
hereafter elucidated.
Article 160 of the New Civil Code provides that "all
property of the marriage is presumed to belong to the
conjugal partnership, unless it be proved that it
pertains exclusively to the husband or to the wife".
However, the party who invokes this presumption
must first prove that the property in controversy was
acquired during the marriage.[12] Proof of acquisition
during the coverture is a condition sine qua non for
the operation of the presumption in favor of the
conjugal partnership.[13] The party who asserts this
presumption must first prove said time element.

Needless to say, the presumption refers only to the


property acquired during the marriage and does not
operate when there is no showing as to when
property alleged to be conjugal was acquired.[14]
Moreover, this presumption in favor of conjugality is
rebuttable, but only with strong, clear and convincing
evidence; there must be a strict proof of exclusive
ownership of one of the spouses.[15]
In this case, petitioner failed to adduce ample
evidence to show that the properties which she
claimed to be conjugal were acquired during her
marriage with Eusebio.
With respect to the land at Col. Cruz St., Balite,
Rodriguez, Rizal, petitioner failed to refute the
testimony of Eusebio that he inherited the same from
his parents. Interestingly, petitioner even admitted
that Eusebio brought into their marriage the said
land, albeit in the concept of a possessor only as it
was not yet registered in his name.
Whether Eusebio succeeded to the property prior or
subsequent to his second marriage is inconsequential.
The property should be regarded as his own
exclusively, as a matter of law, pursuant to Article
148[16] of the New Civil Code.
Essentially, property already owned by a spouse prior
to the marriage, and brought to the marriage, is

considered his or her separate property.[17]


Acquisitions by lucrative title refers to properties
acquired gratuitously and include those acquired by
either spouse during the marriage by inheritance,
devise, legacy, or donation.[18] Hence, even if it be
assumed that Eusebios acquisition by succession of
the land took place during his second marriage, the
land would still be his "exclusive property" because it
was acquired by him, "during the marriage, by
lucrative title."[19]
As regards the house, apartment and sari-sari store,
private respondents aver that these properties were
either constructed or established by their father
during his first marriage. On the other hand,
petitioner insists that the said assets belong to
conjugal partnership. In support of her claim,
petitioner relied on the building permits for the house
and the apartment, with her as the applicant although
in the name of Eusebio. She also invoked the business
license for the sari-sari store issued in her name
alone.
It must be emphasized that the aforementioned
documents in no way prove that the improvements
were acquired during the second marriage. And the
fact that one is the applicant or licensee is not
determinative of the issue as to whether or not the
property is conjugal or not. As the appellate court
aptly noted:

"x x x. And the mere fact that plaintiff-appellant


[petitioner herein] is the licensee of the sari-sari store
(Exhibit F-3; Exhibit G, pp. 44-47, Record) or is the
supposed applicant for a building permit does not
establish that these improvements were acquired
during her marriage with Eusebio Francisco,
especially so when her exhibits (D-1, E, E-1, T,
T-1, T-2, U, U-1 and U-2; pp. 38-40; 285-290,
Record; TSN, January 17, 1989, page 6-7) are
diametrically opposed to her pretense as they all
described Eusebio Francisco as the owner of the
structures (Article 1431, New Civil Code; Section 4,
Rule 129, Revised Rules on Evidence).
Neither is it plausible to argue that the sari-sari store
constructed on the land of Eusebio Francisco has
thereby become conjugal for want of evidence to
sustain the proposition that it was constructed at the
expense of their partnership (second paragraph,
Article 158, New Civil Code). Normally, this absence
of evidence on the source of funding will call for the
application of the presumption under Article 160 of
the New Civil Code that the store is really conjugal
but it cannot be so in this particular case again, by
reason of the dearth in proof that it was erected
during the alleged second marriage (5 Sanchez
Roman 840-841; 9 Manresa; cited in Civil Code of the
Philippines by Tolentino, Volume 1, 1983 Edition,
page 421)."[20]

Regarding the property at San Isidro, Rodriguez,


Rizal, private respondents assert that their father
purchased it during the lifetime of their mother. In
contrast, petitioner claims ownership over said
property inasmuch as the title thereto is registered in
the name of "Eusebio Francisco, married to Teresita
Francisco."
It must be stressed that the certificate of title upon
which petitioner anchors her claim is inadequate. The
fact that the land was registered in the name of
"Eusebio Francisco, married to Teresita Francisco", is
no proof that the property was acquired during the
spouses coverture. Acquisition of title and
registration thereof are two different acts.[21] It is well
settled that registration does not confer title but
merely confirms one already existing.[22] The phrase
"married to" preceding "Teresita Francisco" is merely
descriptive of the civil status of Eusebio Francisco. [23]
In the light of the foregoing circumstances, the
appellate court cannot be said to have been without
valid basis in affirming the lower courts ruling that
the properties in controversy belong exclusively to
Eusebio.
Now, insofar as the administration of the subject
properties is concerned, it follows that Eusebio shall
retain control thereof considering that the assets are
exclusively his capital.[24] Even assuming for the sake

of argument that the properties are conjugal,


petitioner cannot administer them inasmuch as
Eusebio is not incapacitated. Contrary to the
allegation of petitioner, Eusebio, as found by the
lower court, is not suffering from serious illness so as
to impair his fitness to administer his properties. That
he is handicapped due to a leg injury sustained in a
bicycle accident, allegedly aggravated when
petitioner pushed him to the ground in one of their
occasional quarrels, did not render him, in the
Courts view, incapacitated to perform acts of
administration over his own properties.
WHEREFORE, petition is hereby DENIED. The
Decision of the Court of Appeals is AFFIRMED.
Costs against petitioner.
SO ORDERED.
Davide, Jr. (Chairman), Bellosillo, Vitug, and
Panganiban, JJ., concur.

On September 26, 1978, the Philippine Blooming Mills Company, Inc.


(PBMCI) obtained a loan of P9,000,000.00 from the Allied Banking Corporation
(ABC). By virtue of this loan, the PBMCI, through its Executive Vice-President
Alfredo Ching, executed a promissory note for the said amount promising to pay
on December 22, 1978 at an interest rate of 14% per annum.[5] As added
security for the said loan, on September 28, 1978, Alfredo Ching, together with
Emilio Taedo and Chung Kiat Hua, executed a continuing guaranty with the ABC
binding themselves to jointly and severally guarantee the payment of all the
PBMCI obligations owing the ABC to the extent of P38,000,000.00.[6] The loan
was subsequently renewed on various dates, the last renewal having been made
on December 4, 1980.[7]

SECOND DIVISION
[G.R. No. 124642. February 23, 2004]
ALFREDO CHING and ENCARNACION CHING, petitioners, vs. THE HON.
COURT
OF
APPEALS
and
ALLIED
BANKING
CORPORATION, respondents.
DECISION
CALLEJO, SR., J.:
This petition for review, under Rule 45 of the Revised Rules of Court, assails
the Decision[1] of the Court of Appeals (CA) dated November 27, 1995 in CA-G.R.
SP No. 33585, as well as the Resolution [2] on April 2, 1996 denying the petitioners
motion for reconsideration. The impugned decision granted the private
respondents petition for certiorari and set aside the Orders of the trial court
dated December 15, 1993[3] and February 17, 1994[4] nullifying the attachment of
100,000 shares of stocks of the Citycorp Investment Philippines under the name
of petitioner Alfredo Ching.
The following facts are undisputed:

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% interestper
annum. As in the previous loan, the PBMCI, through Alfredo Ching, executed a
promissory note to evidence the loan maturing on June 29, 1981. [8] This was
renewed once for a period of one month.[9]
The PBMCI defaulted in the payment of all its loans. Hence, on August 21,
1981, the ABC filed a complaint for sum of money with prayer for a writ of
preliminary attachment against the PBMCI to collect the P12,612,972.88
exclusive of interests, penalties and other bank charges. Impleaded as codefendants in the complaint were Alfredo Ching, Emilio Taedo and Chung Kiat
Hua in their capacity as sureties of the PBMCI.
The case was docketed as Civil Case No. 142729 in the Regional Trial Court
of Manila, Branch XVIII.[10] In its application for a writ of preliminary attachment,
the ABC averred that the defendants are guilty of fraud in incurring the
obligations upon which the present action is brought [11] in that they falsely
represented themselves to be in a financial position to pay their obligation upon
maturity thereof.[12] Its supporting affidavit stated, inter alia, that the
[d]efendants have removed or disposed of their properties, or [are] ABOUT to do
so, with intent to defraud their creditors.[13]
On August 26, 1981, after an ex-parte hearing, the trial court issued an
Order denying the ABCs application for a writ of preliminary attachment. The trial
court decreed that the grounds alleged in the application and that of its
supporting affidavit are all conclusions of fact and of law which do not warrant the

issuance of the writ prayed for.[14] On motion for reconsideration, however, the
trial court, in an Order dated September 14, 1981, reconsidered its previous
order and granted the ABCs application for a writ of preliminary attachment on a
bond 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.[15]
Upon the ABCs posting of the requisite bond, the trial court issued a writ of
preliminary attachment. Subsequently, summonses were served on the
defendants,[16] save Chung Kiat Hua who could not be found.
Meanwhile, on April 1, 1982, the PBMCI and Alfredo Ching jointly filed a
petition for suspension of payments with the Securities and Exchange
Commission (SEC), docketed as SEC Case No. 2250, at the same time seeking
the PBMCIs rehabilitation.[17]
On July 9, 1982, the SEC issued an Order placing the PBMCIs business,
including its assets and liabilities, under rehabilitation receivership, and ordered
that all actions for claims listed in Schedule A of the petition pending before any

court or tribunal are hereby suspended in whatever stage the same may be until
further orders from the Commission. [18] The ABC was among the PBMCIs creditors
named in the said schedule.
Subsequently, on January 31, 1983, the PBMCI and Alfredo Ching jointly filed
a Motion to Dismiss and/or motion to suspend the proceedings in Civil Case No.
142729 invoking the PBMCIs pending application for suspension of payments
(which Ching co-signed) and over which the SEC had already assumed
jurisdiction.[19] On February 4, 1983, the ABC filed its Opposition thereto.[20]
In the meantime, on July 26, 1983, the deputy sheriff of the trial court levied
on attachment the 100,000 common shares of Citycorp stocks in the name of
Alfredo Ching.[21]
Thereafter, in an Order dated September 16, 1983, the trial court partially
granted the aforementioned motion by suspending the proceedings only with
respect to the PBMCI. It denied Chings motion to dismiss the complaint/or
suspend the proceedings and pointed out that P.D. No. 1758 only concerns the
activities of corporations, partnerships and associations and was never intended
to regulate and/or control activities of individuals. Thus, it directed the individual
defendants to file their answers.[22]
Instead of filing an answer, Ching filed on January 14, 1984 a Motion to
Suspend Proceedings on the same ground of the pendency of SEC Case No.
2250.This motion met the opposition from the ABC.[23]
On January 20, 1984, Taedo filed his Answer with counterclaim and crossclaim.[24] Ching eventually filed his Answer on July 12, 1984.[25]
On October 25, 1984, long after submitting their answers, Ching filed an
Omnibus Motion,[26] again praying for the dismissal of the complaint or
suspension of the proceedings on the ground of the July 9, 1982 Injunctive Order
issued in SEC Case No. 2250. He averred that as a surety of the PBMCI, he must
also necessarily benefit from the defenses of his principal. The ABC opposed
Chings omnibus motion.
Emilio Y. Taedo, thereafter, filed his own Omnibus Motion [27] praying for the
dismissal of the complaint, arguing that the ABC had abandoned and waived its

right to proceed against the continuing guaranty by its act of resorting to


preliminary attachment.
On December 17, 1986, the ABC filed a Motion to Reduce the amount of his
preliminary attachment bond from P12,700,000 to P6,350,000.[28] Alfredo Ching
opposed the motion,[29] but on April 2, 1987, the court issued an Order setting
the incident for further hearing on May 28, 1987 at 8:30 a.m. for the parties to
adduce evidence on the actual value of the properties of Alfredo Ching levied on
by the sheriff.[30]
On March 2, 1988, the trial court issued an Order granting the motion of the
ABC and rendered the attachment bond of P6,350,000.[31]
On November 16, 1993, Encarnacion T. Ching, assisted by her husband
Alfredo Ching, filed a Motion to Set Aside the levy on attachment. She
alleged inter alia that the 100,000 shares of stocks levied on by the sheriff were
acquired by her and her husband during their marriage out of conjugal funds
after the Citycorp Investment Philippines was established in 1974. Furthermore,
the indebtedness covered by the continuing guaranty/comprehensive suretyship
contract executed by petitioner Alfredo Ching for the account of PBMCI did not
redound to the benefit of the conjugal partnership. She, likewise, alleged that
being the wife of Alfredo Ching, she was a third-party claimant entitled to file a
motion for the release of the properties.[32] She attached therewith a copy of her
marriage contract with Alfredo Ching.[33]
The ABC filed a comment on the motion to quash preliminary attachment
and/or motion to expunge records, contending that:
2.1 The supposed movant, Encarnacion T. Ching, is not a party to this present
case; thus, she has no personality to file any motion before this Honorable Court;
2.2 Said supposed movant did not file any Motion for Intervention pursuant to
Section 2, Rule 12 of the Rules of Court;
2.3 Said Motion cannot even be construed to be in the nature of a Third-Party
Claim conformably with Sec. 14, Rule 57 of the Rules of Court.

3. Furthermore, assuming in gracia argumenti that the supposed movant has the
required personality, her Motion cannot be acted upon by this Honorable Court as
the above-entitled case is still in the archives and the proceedings thereon still
remains suspended. And there is no previous Motion to revive the same.[34]
The ABC also alleged that the motion was barred by prescription or by laches
because the shares of stocks were in custodia legis.
During the hearing of the motion, Encarnacion T. Ching adduced in evidence
her marriage contract to Alfredo Ching to prove that they were married on
January 8, 1960;[35] the articles of incorporation of Citycorp Investment
Philippines dated May 14, 1979; [36] and, the General Information Sheet of the
corporation showing that petitioner Alfredo Ching was a member of the Board of
Directors of the said corporation and was one of its top twenty stockholders.
On December 10, 1993, the Spouses Ching filed their Reply/Opposition to the
motion to expunge records.
Acting on the aforementioned motion, the trial court issued on December 15,
1993 an Order[37] lifting the writ of preliminary attachment on the shares of
stocks and ordering the sheriff to return the said stocks to the petitioners. The
dispositive portion reads:
WHEREFORE, the instant Motion to Quash Preliminary Attachment, dated
November 9, 1993, is hereby granted. Let the writ of preliminary attachment
subject matter of said motion, be quashed and lifted with respect to the attached
100,000 common shares of stock of Citycorp Investment Philippines in the name
of the defendant Alfredo Ching, the said shares of stock to be returned to him
and his movant-spouse by Deputy Sheriff Apolonio A. Golfo who effected the levy
thereon on July 26, 1983, or by whoever may be presently in possession thereof.
SO ORDERED.[38]
The plaintiff Allied Banking Corporation filed a motion for the reconsideration
of the order but denied the same on February 17, 1994. The petitioner bank
forthwith filed a petition for certiorari with the CA, docketed as CA-G.R. SP No.
33585, for the nullification of the said order of the court, contending that:

1. The respondent Judge exceeded his authority thereby acted without


jurisdiction in taking cognizance of, and granting a Motion filed by a
complete stranger to the case.
2. The respondent Judge committed a grave abuse of discretion in lifting
the writ of preliminary attachment without any basis in fact and in
law, and contrary to established jurisprudence on the matter.[39]
On November 27, 1995, the CA rendered judgment granting the petition and
setting aside the assailed orders of the trial court, thus:
WHEREFORE, premises considered, the petition is GRANTED, hereby setting aside
the questioned orders (dated December 15, 1993 and February 17, 1994) for
being null and void.
SO ORDERED.[40]
The CA sustained the contention of the private respondent and set aside the
assailed orders. According to the CA, the RTC deprived the private respondent of
its right to file a bond under Section 14, Rule 57 of the Rules of Court. The
petitioner Encarnacion T. Ching was not a party in the trial court; hence, she had
no right of action to have the levy annulled with a motion for that purpose. Her
remedy in such case was to file a separate action against the private respondent
to nullify the levy on the 100,000 Citycorp shares of stocks. The court stated that
even assuming that Encarnacion T. Ching had the right to file the said motion, the
same was barred by laches.
Citing Wong v. Intermediate Appellate Court,[41] the CA ruled that the
presumption in Article 160 of the New Civil Code shall not apply where, as in this
case, the petitioner-spouses failed to prove the source of the money used to
acquire the shares of stock. It held that the levied shares of stocks belonged to
Alfredo Ching, as evidenced by the fact that the said shares were registered in
the corporate books of Citycorp solely under his name. Thus, according to the
appellate court, the RTC committed a grave abuse of its discretion amounting to
excess or lack of jurisdiction in issuing the assailed orders. The petitioners motion
for reconsideration was denied by the CA in a Resolution dated April 2, 1996.

The petitioner-spouses filed the instant petition for review on certiorari,


asserting that the RTC did not commit any grave abuse of discretion amounting
to excess or lack of jurisdiction in issuing the assailed orders in their favor;
hence, the CA erred in reversing the same. They aver that the source of funds in
the acquisition of the levied shares of stocks is not the controlling factor when
invoking the presumption of the conjugal nature of stocks under Art. 160, [42] and
that such presumption subsists even if the property is registered only in the
name of one of the spouses, in this case, petitioner Alfredo Ching. [43] According to
the petitioners, the suretyship obligation was not contracted in the pursuit of the
petitioner-husbands profession or business. [44] And, contrary to the ruling of the
CA, where conjugal assets are attached in a collection suit on an obligation
contracted by the husband, the wife should exhaust her motion to quash in the
main case and not file a separate suit. [45] Furthermore, the petitioners contend
that under Art. 125 of the Family Code, the petitioner-husbands gratuitous
suretyship is null and void ab initio,[46] and that the share of one of the spouses in
the conjugal partnership remains inchoate until the dissolution and liquidation of
the partnership.[47]
In its comment on the petition, the private respondent asserts that the CA
correctly granted its petition for certiorari nullifying the assailed order. It
contends that the CA correctly relied on the ruling of this Court in Wong v.
Intermediate Appellate Court. Citing Cobb-Perez v. Lantin and G-Tractors, Inc. v.
Court of Appeals, the private respondent alleges that the continuing guaranty and
suretyship executed by petitioner Alfredo Ching in pursuit of his profession or
business. Furthermore, according to the private respondent, the right of the
petitioner-wife to a share in the conjugal partnership property is merely inchoate
before the dissolution of the partnership; as such, she had no right to file the said
motion to quash the levy on attachment of the shares of stocks.
The issues for resolution are as follows: (a) whether the petitioner-wife has
the right to file the motion to quash the levy on attachment on the 100,000
shares of stocks in the Citycorp Investment Philippines; (b) whether or not the
RTC committed a grave abuse of its discretion amounting to excess or lack of
jurisdiction in issuing the assailed orders.
On the first issue, we agree with the petitioners that the petitioner-wife had
the right to file the said motion, although she was not a party in Civil Case No.
142729.[48]

In Ong v. Tating,[49] we held that the sheriff may attach only those properties
of the defendant against whom a writ of attachment has been issued by the
court. When the sheriff erroneously levies on attachment and seizes the property
of a third person in which the said defendant holds no right or interest, the
superior authority of the court which has authorized the execution may be
invoked by the aggrieved third person in the same case. Upon application of the
third person, the court shall order a summary hearing for the purpose of
determining whether the sheriff has acted rightly or wrongly in the performance
of his duties in the execution of the writ of attachment, more specifically if he has
indeed levied on attachment and taken hold of property not belonging to the
plaintiff. If so, the court may then order the sheriff to release the property from
the erroneous levy and to return the same to the third person. In resolving the
motion of the third party, the court does not and cannot pass upon the question
of the title to the property with any character of finality. It can treat the matter
only insofar as may be necessary to decide if the sheriff has acted correctly or
not. If the claimants proof does not persuade the court of the validity of the title,
or right of possession thereto, the claim will be denied by the court. The
aggrieved third party may also avail himself of the remedy of terceria by
executing an affidavit of his title or right of possession over the property levied
on attachment and serving the same to the office making the levy and the
adverse party. Such party may also file an action to nullify the levy with damages
resulting from the unlawful levy and seizure, which should be a totally separate
and distinct action from the former case. The above-mentioned remedies are
cumulative and any one of them may be resorted to by one third-party claimant
without availing of the other remedies.[50]
In this case, the petitioner-wife filed her motion to set aside the levy on
attachment of the 100,000 shares of stocks in the name of petitioner-husband
claiming that the said shares of stocks were conjugal in nature; hence, not liable
for the account of her husband under his continuing guaranty and suretyship
agreement with the PBMCI. The petitioner-wife had the right to file the motion for
said relief.
On the second issue, we find and so hold that the CA erred in setting aside
and reversing the orders of the RTC. The private respondent, the petitioner in the
CA, was burdened to prove that the RTC committed a grave abuse of its
discretion amounting to excess or lack of jurisdiction. The tribunal acts without
jurisdiction if it does not have the legal purpose to determine the case; there is

excess of jurisdiction where the tribunal, being clothed with the power to
determine the case, oversteps its authority as determined by law. There is grave
abuse of discretion where the tribunal acts in a capricious, whimsical, arbitrary or
despotic manner in the exercise of its judgment and is equivalent to lack of
jurisdiction.[51]
It was incumbent upon the private respondent to adduce a sufficiently strong
demonstration that the RTC acted whimsically in total disregard of evidence
material to, and even decide of, the controversy before certiorari will lie. A special
civil action for certiorari is a remedy designed for the correction of errors of
jurisdiction and not errors of judgment. When a court exercises its jurisdiction, an
error committed while so engaged does not deprive it of its jurisdiction being
exercised when the error is committed.[52]
After a comprehensive review of the records of the RTC and of the CA, we
find and so hold that the RTC did not commit any grave abuse of its discretion
amounting to excess or lack of jurisdiction in issuing the assailed orders.
Article 160 of the New Civil Code provides that all the properties acquired
during the marriage are presumed to belong to the conjugal partnership, unless it
be proved that it pertains exclusively to the husband, or to the wife. In Tan v.
Court of Appeals,[53] we held that it is not even necessary to prove that the
properties were acquired with funds of the partnership. As long as the properties
were acquired by the parties during the marriage, they are presumed to be
conjugal in nature. In fact, even when the manner in which the properties were
acquired does not appear, the presumption will still apply, and the properties will
still be considered conjugal. The presumption of the conjugal nature of the
properties acquired during the marriage subsists in the absence of clear,
satisfactory and convincing evidence to overcome the same.[54]
In this case, the evidence adduced by the petitioners in the RTC is that the
100,000 shares of stocks in the Citycorp Investment Philippines were issued to
and registered in its corporate books in the name of the petitioner-husband when
the said corporation was incorporated on May 14, 1979. This was done during the
subsistence of the marriage of the petitioner-spouses. The shares of stocks are,
thus, presumed to be the conjugal partnership property of the petitioners.The
private respondent failed to adduce evidence that the petitioner-husband
acquired the stocks with his exclusive money.[55] The barefaced fact that the

shares of stocks were registered in the corporate books of Citycorp Investment


Philippines solely in the name of the petitioner-husband does not constitute proof
that the petitioner-husband, not the conjugal partnership, owned the same.
[56]
The private respondents reliance on the rulings of this Court in Maramba v.
Lozano[57] and Associated Insurance & Surety Co., Inc. v. Banzon[58] is
misplaced. In the Maramba case, we held that where there is no showing as to
when the property was acquired, the fact that the title is in the wifes name alone
is determinative of the ownership of the property. The principle was reiterated in
theAssociated Insurance case where the uncontroverted evidence showed that
the shares of stocks were acquired during the marriage of the petitioners.
Instead of fortifying the contention of the respondents, the ruling of this
Court in Wong v. Intermediate Appellate Court[59] buttresses the case for the
petitioners. In that case, we ruled that he who claims that property acquired by
the spouses during their marriage is not conjugal partnership property but
belongs to one of them as his personal property is burdened to prove the source
of the money utilized to purchase the same. In this case, the private respondent
claimed that the petitioner-husband acquired the shares of stocks from the
Citycorp Investment Philippines in his own name as the owner thereof. It was,
thus, the burden of the private respondent to prove that the source of the money
utilized in the acquisition of the shares of stocks was that of the petitionerhusband alone. As held by the trial court, the private respondent failed to adduce
evidence to prove this assertion.
The CA, likewise, erred in holding that by executing a continuing guaranty
and suretyship agreement with the private respondent for the payment of the
PBMCI loans, the petitioner-husband was in the exercise of his profession,
pursuing a legitimate business. The appellate court erred in concluding that the
conjugal partnership is liable for the said account of PBMCI under Article 161(1)
of the New Civil Code.
Article 161(1) of the New Civil Code (now Article 121[2 and 3] [60] of the
Family Code of the Philippines) provides:
Art. 161. The conjugal partnership shall be liable for:

(1) All debts and obligations contracted by the husband for the benefit of the
conjugal partnership, and those contracted by the wife, also for the same
purpose, in the cases where she may legally bind the partnership.
The petitioner-husband signed the continuing guaranty and suretyship
agreement as security for the payment of the loan obtained by the PBMCI from
the private respondent in the amount of P38,000,000. In Ayala Investment and
Development Corp. v. Court of Appeals,[61] this Court ruled that the signing as
surety is certainly not an exercise of an industry or profession. It is not
embarking in a business. No matter how often an executive acted on or was
persuaded to act as surety for his own employer, this should not be taken to
mean that he thereby embarked in the business of suretyship or guaranty.
For the conjugal partnership to be liable for a liability that should appertain
to the husband alone, there must be a showing that some advantages accrued to
the spouses. Certainly, to make a conjugal partnership responsible for a liability
that should appertain alone to one of the spouses is to frustrate the objective of
the New Civil Code to show the utmost concern for the solidarity and well being
of the family as a unit. The husband, therefore, is denied the power to assume
unnecessary and unwarranted risks to the financial stability of the conjugal
partnership.[62]
In this case, the private respondent failed to prove that the conjugal
partnership of the petitioners was benefited by the petitioner-husbands act of
executing a continuing guaranty and suretyship agreement with the private
respondent for and in behalf of PBMCI. The contract of loan was between the
private respondent and the PBMCI, solely for the benefit of the latter. No
presumption can be inferred from the fact that when the petitioner-husband
entered into an accommodation agreement or a contract of surety, the conjugal
partnership would thereby be benefited. The private respondent was burdened to
establish that such benefit redounded to the conjugal partnership.[63]
It could be argued that the petitioner-husband was a member of the Board of
Directors of PBMCI and was one of its top twenty stockholders, and that the
shares of stocks of the petitioner-husband and his family would appreciate if the
PBMCI could be rehabilitated through the loans obtained; that the petitionerhusbands career would be enhanced should PBMCI survive because of the
infusion of fresh capital. However, these are not the benefits contemplated by

Article 161 of the New Civil Code. The benefits must be those directly resulting
from the loan. They cannot merely be a by-product or a spin-off of the loan itself.
[64]

This is different from the situation where the husband borrows money or
receives services to be used for his own business or profession. In
the Ayala case, we ruled that it is such a contract that is one within the term
obligation for the benefit of the conjugal partnership. Thus:
(A) If the husband himself is the principal obligor in the contract, i.e., he directly
received the money and services to be used in or for his own business or his own
profession, that contract falls within the term obligations for the benefit of the
conjugal partnership. Here, no actual benefit may be proved. It is enough that
the benefit to the family is apparent at the time of the signing of the
contract. From the very nature of the contract of loan or services, the family
stands to benefit from the loan facility or services to be rendered to the business
or profession of the husband. It is immaterial, if in the end, his business or
profession fails or does not succeed. Simply stated, where the husband contracts
obligations on behalf of the family business, the law presumes, and rightly so,
that such obligation will redound to the benefit of the conjugal partnership.[65]
The Court held in the same case that the rulings of the Court in CobbPerez and G-Tractors, Inc. are not controlling because the husband, in those
cases, contracted the obligation for his own business. In this case, the petitionerhusband 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.
Puno, (Chairman), Quisumbing, Austria-Martinez, and Tinga, JJ., concur.

respondent Ernesto Vasquez is the husband of Agustina. Alejandra Poblete predeceased


her husband without her intestate estate being settled. Subsequently, Emilio Jocson also
died intestate on April 1, 1972.

Republic of the Philippines


SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-55322 February 16, 1989
MOISES JOCSON, petitioner,
vs.
HON. COURT OF APPEALS, AGUSTINA JOCSON-VASQUEZ, ERNESTO
VASQUEZ, respondents.
Dolorfino and Dominguez Law Officers for petitioner.
Gabriel G. Mascardo for private respondents.
MEDIALDEA, J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Court of the
decision of the Court of Appeals in CA- G.R. No. 63474, promulgated on April 30, 1980,
entitled "MOISES JOCSON, plaintiff-appellee, versus AGUSTINA JOCSON-VASQUEZ
and ERNESTO VASQUEZ, defendant-appellants," upholding the validity of three (3)
documents questioned by Moises Jocson, in total reversal of the decision of the then
Court of First Instance of Cavite, Branch I, which declared them as null and void; and of
its resolution, dated September 30, 1980, denying therein appellee's motion for
reconsideration.
Petitioner Moises Jocson and respondent Agustina Jocson-Vasquez are the only
surviving offsprings of the spouses Emilio Jocson and Alejandra Poblete, while

As adverted to above, the present controversy concerns the validity of three (3)
documents executed by Emilio Jocson during his lifetime. These documents purportedly
conveyed, by sale, to Agustina Jocson-Vasquez what apparently covers almost all of his
properties, including his one-third (1/3) share in the estate of his wife. Petitioner Moises
Jocson assails these documents and prays that they be declared null and void and the
properties subject matter therein be partitioned between him and Agustina as the only
heirs of their deceased parents.
The documents, which were presented as evidence not by Moises Jocson, as the party
assailing its validity, but rather by herein respondents, are the following:
1) "Kasulatan ng Bilihan ng Lupa," marked as Exhibit 3 (pp. 12-13,
Records) for the defendant in the court a quo, dated July 27, 1968. By
this document Emilio Jocson sold to Agustina Jocson-Vasquez six (6)
parcels of land, all located at Naic, Cavite, for the sum of ten thousand
P10,000.00 pesos. On the same document Emilio Jocson acknowledged
receipt of the purchase price, thus:
Na ngayon, alang-alang sa halagang SAMPUNG LIBONG PISO
(P10,000) salaping Pilipino na aking tinanggap ng buong kasiyahan loob
at ang pagkakatanggap ay aking hayagang inaamin sa pamamagitan ng
kasulatang ito, sa aking anak na si Agustina Jocson, na may sapat na
gulang, mamamayang Pilipino, asawa ni Ernesto Vasquez, at
naninirahan sa Poblacion, Naic, Cavite, ay aking ipinagbile ng lubusan at
kagyat at walang ano mang pasubali ang nabanggit na anim na pirasong
lupa na nasa unang dahon ng dokumentong ito, sa nabanggit na
Agustina Jocson, at sa kaniyang tagapagmana o makakahalili at gayon
din nais kong banggitin na kahit na may kamurahan ang ginawa kong
pagbibile ay dahilan sa ang nakabile ay aking anak na sa akin at
mapaglingkod, madamayin at ma-alalahanin, na tulad din ng isa ko pang
anak na lalaki. Ang kuartang tinanggap ko na P10,000.00, ay gagamitin
ko sa aking katandaan at mga huling araw at sa aking mga ibang
mahahalagang pangangailangan. [Emphasis supplied]

Na nais ko ring banggitin na ang ginawa kong ito ay hindi labag sa ano
mang batas o kautusan, sapagkat ang aking pinagbile ay akin at nasa
aking pangalan. Ang mga lupang nasa pangalan ng aking nasirang
asawa ay hindi ko ginagalaw ni pinakikialaman at iyon ay dapat na hatiin
ng dalawa kong anak alinsunod sa umiiral na batas (p. 13, Records.)
2) "Kasulatan ng Ganap na Bilihan,"dated July 27,1968, marked as
Exhibit 4 (p. 14, Records). On the face of this document, Emilio Jocson
purportedly sold to Agustina Jocson-Vasquez, for the sum of FIVE
THOUSAND (P5,000.00) PESOS, two rice mills and a camarin (camalig)
located at Naic, Cavite. As in the first document, Moises Jocson
acknowledged receipt of the purchase price:
'Na alang-alang sa halagang LIMANG LIBONG PISO (P5,000.00)
salaping Pilipino na aking tinanggap ng buong kasiyahan loob sa aking
anak na Agustina Jocson .... Na ang halagang ibinayad sa akin ay may
kamurahan ng kaunti ngunit dahil sa malaking pagtingin ko sa kaniya ...
kaya at pinagbile ko sa kaniya ang mga nabanggit na pagaari kahit na
hindi malaking halaga ... (p. 14, Records).
3) Lastly, the "Deed of Extrajudicial Partition and Adjudication with Sale,
"dated March 9, 1969, marked as Exhibit 2 (p. 10-11, Records), whereby
Emilio Jocson and Agustina Jocson-Vasquez, without the participation
and intervention of Moises Jocson, extrajudicially partitioned the
unsettled estate of Alejandra Poblete, dividing the same into three parts,
one-third (1/3) each for the heirs of Alejandra Poblete, namely: Emilio
Jocson, Agustina Jocson-Vasquez and Moises Jocson. By the same
instrument, Emilio sold his one- third (1/3) share to Agustin for the sum of
EIGHT THOUSAND (P8,000.00) PESOS. As in the preceding
documents, Emilio Jocson acknowledged receipt of the purchase price:
Now for and in consideration of the sum of only eight thousand
(P8,000.00) pesos, which I, the herein Emilio Jocson had received from
my daughter Agustina Jocson, do hereby sell, cede, convey and transfer,
unto the said Agustina Jocson, her heirs and assigns, administrators and
successors in interests, in the nature of absolute and irrevocable sale, all
my rights, interest, shares and participation, which is equivalent to one
third (1/3) share in the properties herein mentioned and described the

one third being adjudicated unto Agustina Jocson and the other third (1/3)
portion being the share of Moises Jocson. (p. 11, Records).
These documents were executed before a notary public. Exhibits 3 and 4 were
registered with the Office of the Register of Deeds of Cavite on July 29, 1968 and the
transfer certificates of title covering the properties therein in the name of Emilio Jocson,
married to Alejandra Poblete," were cancelled and new certificates of title were issued in
the name of Agustina Jocson-Vasquez. Exhibit 2 was not registered with the Office of the
Register of Deeds.
Herein petitioner filed his original complaint (Record on Appeal, p. 27, Rollo) on June
20,1973 with the then Court of First Instance of Naic, Cavite (docketed as Civil Case No.
TM- 531), and which was twice amended. In his Second Amended Complaint (pp. 47-58,
Record on Appeal), herein petitioner assailed the above documents, as aforementioned,
for being null and void.
It is necessary to partly quote the allegation of petitioner in his complaint for the reason
that the nature of his causes of action is at issue, thus:
8. [With regard the first document, that] the defendants, through fraud,
deceit, undue pressure and influence and other illegal machinations,
were able to induce, led, and procured their father ... to sign [the] contract
of sale ..., for the simulated price of P10,000.00, which is a consideration
that is shocking to the conscience of ordinary man and despite the fact
that said defendants have no work or livelihood of their own ...; that the
sale is null and void, also, because it is fictitious, simulated and
fabricated contract x x x (pp. 52-53, Record on Appeal). [Emphasis
supplied]
xxx xxx xxx
12. [With regards the second and third document, that they] are null and
void because the consent of the father, Emilio Jocson, was obtained with
fraud, deceit, undue pressure, misrepresentation and unlawful
machinations and trickeries committed by the defendant on him; and that
the said contracts are simulated, fabricated and fictitious, having been
made deliberately to exclude the plaintiff from participating and with the
dishonest and selfish motive on the part of the defendants to defraud him

of his legitimate share on said properties [subject matter thereof]; and


that without any other business or employment or any other source of
income, defendants who were just employed in the management and
administration of the business of their parents, would not have the
sufficient and ample means to purchase the said properties except by
getting the earnings of the business or by simulated consideration ... (pp.
54-55, Record on Appeal). [Emphasis supplied]
Petitioner explained that there could be no real sale between a father and daughter who
are living under the same roof, especially so when the father has no need of money as
the properties supposedly sold were all income-producing. Further, petitioner claimed
that the properties mentioned in Exhibits 3 and 4 are the unliquidated conjugal properties
of Emilio Jocson and Alejandra Poblete which the former, therefore, cannot validly sell
(pp. 53, 57, Record on Appeal). As far as Exhibit 2 is concerned, petitioner questions not
the extrajudicial partition but only the sale by his father to Agustina of the former's 1/3
share (p. 13, Rollo).
The trial court sustained the foregoing contentions of petitioner (pp. 59-81, Record on
Appeal). It declared that the considerations mentioned in the documents were merely
simulated and fictitious because: 1) there was no showing that Agustina Jocson-Vasquez
paid for the properties; 2) the prices were grossly inadequate which is tantamount to lack
of consideration at all; and 3) the improbability of the sale between Emilio Jocson and
Agustina Jocson-Vasquez, taking into consideration the circumstances obtaining
between the parties; and that the real intention of the parties were donations designed to
exclude Moises Jocson from participating in the estate of his parents. It further declared
the properties mentioned in Exhibits 3 and 4 as conjugal properties of Emilio Jocson and
Alejandra Poblete, because they were registered in the name of "Emilio Jocson, married
to Alejandra Poblete" and ordered that the properties subject matter of all the documents
be registered in the name of herein petitioners and private respondents.
On appeal, the Court of Appeals in CA-G.R. No. 63474-R rendered a decision (pp. 2942, Rollo) and reversed that of the trial court's and ruled that:
1. That insofar as Exhibits 3 and 4 are concerned the appellee's
complaint for annulment, which is indisputably based on fraud, and
undue influence, is now barred by prescription, pursuant to the settled
rule that an action for annulment of a contract based on fraud must be
filed within four (4) years, from the discovery of the fraud, ... which in

legal contemplation is deemed to be the date of the registration of said


document with the Register of Deeds ... and the records admittedly show
that both Exhibits 3 and 4, were all registered on July 29, 1968, while on
the other hand, the appellee's complaint was filed on June 20, 1973,
clearly beyond the aforesaid four-year prescriptive period provided by
law;
2. That the aforesaid contracts, Exhibits 2, 3, and 4, are decisively not
simulated or fictitious contracts, since Emilio Jocson actually and really
intended them to be effective and binding against him, as to divest him of
the full dominion and ownership over the properties subject of said
assailed contracts, as in fact all his titles over the same were all
cancelled and new ones issued to appellant Agustina Jocson-Vasquez ...;
3. That in regard to Exhibit 2, the same is valid and subsisting, and the
partition with sale therein made by and between Emilio Jocson and
Agustina Jocson-Vasquez, affecting the 2/3 portion of the subject
properties described therein have all been made in accordance with
Article 996 of the New Civil Code on intestate succession, and the
appellee's (herein petitioner) remaining 1/3 has not been prejudiced (pp.
41-42, Rollo).
In this petition for review, Moises Jocson raised the following assignments of errors:
1. HAS THE RESPONDENT COURT OF APPEALS ERRED IN
CONCLUDING THAT THE SUIT FOR THE ANNULMENT OF
CONTRACTS FILED BY PETITIONERS WITH THE TRIAL COURT IS
"BASED ON FRAUD" AND NOT ON ITS INEXISTENCE AND NULLITY
BECAUSE OF IT'S BEING SIMULATED OR FICTITIOUS OR WHOSE
CAUSE IS CONTRARY TO LAW, MORALS AND GOOD CUSTOMS?
II. HAS THE RESPONDENT COURT OF APPEALS ERRED IN
CONCLUDING THAT THE COMPLAINT FILED BY PETITIONER IN THE
TRIAL COURT IS BARRED BY PRESCRIPTION?
III. HAS THE RESPONDENT COURT OF APPEALS ERRED IN NOT
DECLARING AS INEXISTENT AND NULL AND VOID THE CONTRACTS

IN QUESTION AND IN REVERSING THE DECLARING DECISION OF


THE TRIAL COURT? (p. 2, Rollo)

in the case at bar. Upon consideration of the records of this case, We are of the opinion
that petitioner has not sufficiently proven that the questioned documents are without
consideration.

I.
The first and second assignments of errors are related and shall be jointly discussed.
According to the Court of Appeals, herein petitioner's causes of action were based on
fraud. Under Article 1330 of the Civil Code, a contract tainted by vitiated consent, as
when consent was obtained through fraud, is voidable; and the action for annulment
must be brought within four years from the time of the discovery of the fraud (Article
1391, par. 4, Civil Code), otherwise the contract may no longer be contested. Under
present jurisprudence, discovery of fraud is deemed to have taken place at the time the
convenant was registered with the Register of Deeds (Gerona vs. De Guzman, No. L19060, May 29,1964, 11 SCRA 153). Since Exhibits 3 and 4 were registered on July 29,
1968 but Moises Jocson filed his complaint only on June 20, 1973, the Court of Appeals
ruled that insofar as these documents were concerned, petitioner's "annulment suit" had
prescribed.
If fraud were the only ground relied upon by Moises Jocson in assailing the questioned
documents, We would have sustained the above pronouncement. But it is not so. As
pointed out by petitioner, he further assailed the deeds of conveyance on the ground that
they were without consideration since the amounts appearing thereon as paid were in
fact merely simulated.
According to Article 1352 of the Civil Code, contracts without cause produce no effect
whatsoever. A contract of sale with a simulated price is void (Article 1471; also Article
1409 [3]]), and an action for the declaration of its nullity does not prescribe (Article 1410,
Civil Code; See also, Castillo v. Galvan, No. L-27841, October 20, l978, 85 SCRA 526).
Moises Jocsons saction, therefore, being for the judicial declaration of nullity of Exhibits 3
and 4 on the ground of simulated price, is imprescriptible.

Firstly, Moises Jocson's claim that Agustina Jocson-Vasquez had no other source of
income other than what she derives from helping in the management of the family
business (ricefields and ricemills), and which was insufficient to pay for the purchase
price, was contradicted by his own witness, Isaac Bagnas, who testified that Agustina
and her husband were engaged in the buy and sell of palay and rice (p. 10, t.s.n.,
January 14, 1975). Amazingly, petitioner himself and his wife testified that they did not
know whether or not Agustina was involved in some other business (p. 40, t.s.n., July 30,
1974; p. 36, t.s.n., May 24, 1974).
On the other hand, Agustina testified that she was engaged in the business of buying
and selling palay and rice even before her marriage to Ernesto Vasquez sometime in
1948 and continued doing so thereafter (p. 4, t.s.n., March 15, 1976). Considering the
foregoing and the presumption that a contract is with a consideration (Article 1354, Civil
Code), it is clear that petitioner miserably failed to prove his allegation.
Secondly, neither may the contract be declared void because of alleged inadequacy of
price. To begin with, there was no showing that the prices were grossly inadequate. In
fact, the total purchase price paid by Agustina Jocson-Vasquez is above the total
assessed value of the properties alleged by petitioner. In his Second Amended
Complaint, petitioner alleged that the total assessed value of the properties mentioned in
Exhibit 3 was P8,920; Exhibit 4, P3,500; and Exhibit 2, P 24,840, while the purchase
price paid was P10,000, P5,000, and P8,000, respectively, the latter for the 1/3 share of
Emilio Jocson from the paraphernal properties of his wife, Alejandra Poblete. And any
difference between the market value and the purchase price, which as admitted by
Emilio Jocson was only slight, may not be so shocking considering that the sales were
effected by a father to her daughter in which case filial love must be taken into
consideration (Alsua-Betts vs. Court of Appeals, No. L-46430-31, April 30, 1979, 92
SCRA 332).

II.
For petitioner, however, the above discussion may be purely academic. The burden of
proof in showing that contracts lack consideration rests on he who alleged it. The degree
of proof becomes more stringent where the documents themselves show that the vendor
acknowledged receipt of the price, and more so where the documents were notarized, as

Further, gross inadequacy of price alone does not affect a contract of sale, except that it
may indicate a defect in the consent, or that the parties really intended a donation or
some other act or contract (Article 1470, Civil Code) and there is nothing in the records
at all to indicate any defect in Emilio Jocson's consent.

Thirdly, any discussion as to the improbability of a sale between a father and his
daughter is purely speculative which has no relevance to a contract where all the
essential requisites of consent, object and cause are clearly present.
There is another ground relied upon by petitioner in assailing Exhibits 3 and 4, that the
properties subject matter therein are conjugal properties of Emilio Jocson and Alejandra
Poblete. It is the position of petitioner that since the properties sold to Agustina JocsonVasquez under Exhibit 3 were registered in the name of "Emilio Jocson, married to
Alejandra Poblete," the certificates of title he presented as evidence (Exhibits "E', to "J',
pp. 4-9, Records) were enough proof to show that the properties covered therein were
acquired during the marriage of their parents, and, therefore, under Article 160 of the
Civil Code, presumed to be conjugal properties.
Article 160 of the Civil Code provides that:
All property of the marriage is presumed to belong to the conjugal
partnership, unless it be proved that it pertains exclusively to the husband
or to the wife.
In Cobb-Perez vs. Hon. Gregorio Lantin, No. L-22320, May 22, 1968, 23 SCRA 637, 644,
We held that:
Anent their claim that the shares in question are conjugal assets, the
spouses Perez adduced not a modicum of evidence, although they
repeatedly invoked article 160 of the New Civil Code which provides
that ... . As interpreted by this Court, the party who invokes this
presumption must first prove that the property in controversy was
acquired during the marriage. In other words, proof of acquisition during
the coverture is a condition sine qua non for the operation of the
presumption in favor of conjugal ownership. Thus in Camia de Reyes vs.
Reyes de Ilano [62 Phil. 629, 639], it was held that "according to law and
jurisprudence, it is sufficient to prove that the Property was acquired
during the marriage in order that the same may be deemed conjugal
property." In the recent case of Maramba vs. Lozano, et. al. [L-21533,
June 29, 1967, 20 SCRA 474], this Court, thru Mr. Justice Makalintal,
reiterated that "the presumption under Article 160 of the Civil Code refers
to property acquired during the marriage," and then concluded that since
"there is no showing as to when the property in question was

acquired...the fact that the title is in the wife's name alone is


determinative." Similarly, in the case at bar, since there is no evidence as
to when the shares of stock were acquired, the fact that they are
registered in the name of the husband alone is an indication that the
shares belong exclusively to said spouse.'
This pronouncement was reiterated in the case of Ponce de Leon vs. Rehabilitation
Finance Corporation, No. L-24571, December 18, 1970, 36 SCRA 289, and later in
Torela vs. Torela, No. 1,27843, October 11, 1979, 93 SCRA 391.
It is thus clear that before Moises Jocson may validly invoke the presumption under
Article 160 he must first present proof that the disputed properties were acquired during
the marriage of Emilio Jocson and Alejandra Poblete. The certificates of title, however,
upon which petitioner rests his claim is insufficient. The fact that the properties were
registered in the name of "Emilio Jocson, married to Alejandra Poblete" is no proof that
the properties were acquired during the spouses' coverture. Acquisition of title and
registration thereof are two different acts. It is well settled that registration does not
confer title but merely confirms one already existing (See Torela vs. Torela, supra). It may
be that the properties under dispute were acquired by Emilio Jocson when he was still a
bachelor but were registered only after his marriage to Alejandra Poblete, which explains
why he was described in the certificates of title as married to the latter.
Contrary to petitioner's position, the certificates of title show, on their face, that the
properties were exclusively Emilio Jocson's, the registered owner. This is so because the
words "married to' preceding "Alejandra Poblete' are merely descriptive of the civil status
of Emilio Jocson Litam v. Rivera, 100 Phil. 354; Stuart v. Yatco, No. L-16467, April 27,
1962, 4 SCRA 1143; Magallon v. Montejo, G.R. No. L-73733, December 16, 1986, 146
SCRA 282). In other words, the import from the certificates of title is that Emilio Jocson is
the owner of the properties, the same having been registered in his name alone, and that
he is married to Alejandra Poblete.
We are not unmindful that in numerous cases We consistently held that registration of
the property in the name of only one spouse does not negate the possibility of it being
conjugal (See Bucoy vs. Paulino, No. L-25775, April 26, 1968, 23 SCRA 248). But this
ruling is not inconsistent with the above pronouncement for in those cases there was
proof that the properties, though registered in the name of only one spouse, were indeed
conjugal properties, or that they have been acquired during the marriage of the spouses,
and therefore, presumed conjugal, without the adverse party having presented proof to

rebut the presumption (See Mendoza vs- Reyes, No. L-31618, August 17, 1983, 124
SCRA 154).
In the instant case, had petitioner, Moises Jocson, presented sufficient proof to show that
the disputed properties were acquired during his parents' coverture. We would have
ruled that the properties, though registered in the name of Emilio Jocson alone, are
conjugal properties in view of the presumption under Article 160. There being no such
proof, the condition sine qua non for the application of the presumption does not exist.
Necessarily, We rule that the properties under Exhibit 3 are the exclusive properties of
Emilio Jocson.
There being no showing also that the camarin and the two ricemills, which are the
subject of Exhibit 4, were conjugal properties of the spouses Emilio Jocson and
Alejandra Poblete, they should be considered, likewise, as the exclusive properties of
Emilio Jocson, the burden of proof being on petitioner.
ACCORDINGLY, the petition is DISMISSED and the decision of the Court of Appeals is
AFFIRMED.
SO ORDERED.

Republic of the Philippines


SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-57757 August 31, 1987
PHILIPPINE NATIONAL BANK, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, PRAGMACIO VITUG AND MAXIMO
VITUG, respondents.
GANCAYCO, J.:

Does the presumption of conjugality of properties acquired by the spouses during


coverture provided for in Article 160 of the Civil Code apply to property covered
by a Torrens certificate of title in the name of the widow? This is the issue posed
in this petition to review on certiorari of the decision of the Court of Appeals in
CA-G.R. No. 60903 which is an action for reconveyance and damages. *
On November 28, 1952, Donata Montemayor, through her son, Salvador M. Vitug,
mortgaged to the Philippine National Bank (PNB) several parcels of land covered
by Transfer Certificate of Title (TCT) No. 2289 Pampanga to guarantee the loan
granted by the PNB to Salvador Jaramilla and Pedro Bacani in the amount of
P40,900.00 which was duly registered in the Office of the Register of Deeds of
Pampanga. 1
On December 1, 1963, Donata Montemayor also mortgaged in favor of PNB
certain properties covered by TCT Nos. 2887 and 2888-Pampanga to guarantee
the payment of the loan account of her son Salvador Vitug in the amount of
P35,200.00, which mortgage was duly registered in the Register of Deeds of
Pampanga. 2
The above-mentioned Transfer Certificates of Titles covering said properties were
all in the name of Donata Montemayor, of legal age, Filipino, widow and a
resident of Lubao, Pampanga at the time they were mortgaged to PNB 3 and were
free from all hens and encumbrances. 4
Salvador Vitug failed to pay his account so the bank foreclosed the mortgaged
properties covered by TCT Nos. 2887 and 2888. They were sold at public auction
on May 20, 1968 in which the PNB was the highest bidder. The titles thereto were
thereafter consolidated in the name of PNB.
Likewise, Salvador Jaramilla and Pedro Bacani failed to settle their accounts with
the PNB so the latter foreclosed the properties covered by TCT No. 2889 which
were sold at public auction and likewise PNB was the buyer thereof. On August
30, 1968, a certificate of sale was issued by the Register of Deeds covering said
properties in favor of the PNB. When the title of the PNB was consolidated a new
title was issued in its name. 5
On September 2, 1969, the PNB sold the properties covered by TCT Nos. 2887
and 2888 Pampanga to Jesus M. Vitug, Anunciacion V. de Guzman, Prudencia

V. Fajardo, Salvador Vitug and Aurora V. Gutierrez in those names the


corresponding titles were issued. 6
During the lifetime of Clodualdo Vitug he married two times. His first wife was
Gervacia Flores with whom he had 3 children, namely, Victor, Lucina and Julio all
surnamed Vitug. Victor now dead is survived by his 5 children: Leonardo, Juan,
Candida Francisco and Donaciano, an surnamed Vitug. Juan Vitug is also dead
and is survived by his only daughter Florencia Vitug.
The second wife of Clodualdo Vitug was Donata Montemayor with whom he had 8
children, namely, Pragmacio, Maximo, Jesus, Salvador, Prudencio and
Anunciacion, all surnamed Vitug, the late Enrique Vitug represented by his wife
Natalia Laquian, and the late Francisco Vitug who is survived by 11 children,
namely, Antonio, Francisco, Aurora, Pedro, Honorio, Corazon, Anselmo, Benigno,
Eligio Jesus and Luz.
Clodualdo Vitug died intestate on May 20, 1929 so his estate was settled and
distributed in Special Proceeding No. 422 in the Court of First Instance of
Pampanga wherein Donata Montemayor was the Administratrix. 7
Meanwhile, on May 12,1958, Donata Montemayor executed a contract of lease of
Lot No. 24, which is covered by TCT No. 2887-R in favor of her children
Pragmacio and Maximo both surnamed Vitug. This lease was extended on August
31, 1963. By virtue of a general power of attorney executed by Donata
Montemayor on Sept. 19, 1966 in favor of Pragmacio Vitug, the latter executed a
contract of lease on Sept. 19, 1967 of the said lot in favor of Maximo Vitug. 8
On March 21, 1970 Pragmacio Vitug and Maximo Vitug filed an action for partition
and reconveyance with damages in the Court of First Instance of Pampanga
against Marcelo Mendiola, special administrator of the intestate estate of Donata
Montemayor who died earlier, Jesus Vitug, Sr., Salvador, Natalia, Prudencia,
Anunciacion, all surnamed Vitug, Antonio, Francisco, Aurora, Pedro, Honorio,
Corazon, Anselmo, Benigno, Eligio Jesus and Luz, all surnamed Fajardo and the
PNB.
The subject of the action is 30 parcels of land which they claim to be the conjugal
property of the spouses Donata Montemayor and Clodualdo Vitug of which they
claim a share of 2/11 of 1/2 thereof. They assailed the mortgage to the PNB and

the public auction of the properties as null and void. They invoked the case of
Vitug vs. Montemayor, L-5297 decided by this Court on Oct. 20, 1953 which is an
action for partition and liquidation of the said 30 parcels of land wherein the
properties were found to be conjugal in nature.
In a decision of Sept. 15, 1975, the lower court dismissed the complaint with
costs against the plaintiffs and ordered them to pay attorney's fees of P5,000.00
to the defendant's counsel. Plaintiffs then interposed an appeal to the Court of
Appeals, wherein in due course a decision was rendered on May 20, 1981, the
dispositive part of which reads as follows:

D. SIMILARLY, PRAGMACIO VITUG AND MAXIMO


VITUG WERE NOT PARTIES IN SAID CASE.
II
THE RESPONDENT COURT OF APPEALS ERRED IN NOT
RECOGNIZING THE CONCLUSIVENESS OF THE CERTIFICATE, OF
TITLE, AS PROVIDED IN ACT 496, AS AMENDED (THE LAND
REGISTRATION).
III

WHEREFORE, in the light of the foregoing, the decision appealed


from is hereby reversed and set aside, and another one entered in
accordance with the tenor of the prayer of appellant's complaint
with the modification that the sale at public auction of the 22
parcels be considered valid with respect to the 1/2 thereof. No
costs.
Hence the herein petition for certiorari filed by the PNB raising the following
assignments of error:
I

THE RESPONDENT COURT OF APPEALS ERRED IN IGNORING THE


CONCLUSIVENESS OF OWNERSHIP OF DONATA MONTEMAYOR
OVER THE PROPERTIES WHICH WERE REGISTERED EXCLUSIVELY
IN HER NAME WHEN PRIVATE RESPONDENTS (PRAGMACIO VITUG
AND MAXIMO VITUG), AS LESSEES, ENTERED INTO A CONTRACT
OF LEASE WITH DONATA MONTEMAYOR AS THE OWNER-LESSOR.
IV
THE RESPONDENT COURT OF APPEALS ERRED IN CONCLUDING
THAT PNB WAS A MORTGAGEE IN BAD FAITH.

THE RESPONDENT COURT OF APPEALS ERRED IN APPLYING TO


THE CASE AT BAR THE RULING OF THIS HONORABLE SUPREME
COURT IN FLORENCIA VITUG VS. DONATA MONTEMAYOR, ET AL.,
91 PHIL. 286 (1953) BECAUSE:
A. BETWEEN A PROVISION OF A SPECIAL LAW AND
THE
JUDICIAL
INTERPRETATION
AND/OR
APPLICATION OF A PROVISION OF A GENERAL LAW,
THE FORMER PREVAILS.
B. THE DOCTRINE OF STARE DECISIS IS NOT A
MECHANICAL FORMULA OF ADHERENCE.
C. PNB WAS NOT A PARTY, AND
KNOWLEDGE OF THE ABOVECITED CASE.

HAD

NO

The petition is impressed with merit.


When the subject properties were mortgaged to the PNB they were registered in
the name of Donata Montemayor, widow. Relying on the torrens certificate of title
covering said properties the mortgage loan applications of Donata were granted
by the PNB and the mortgages were duly constituted and registered in the office
of the Register of Deeds.
In processing the loan applications of Donata Montemayor, the PNB had the right
to rely on what appears in the certificates of title and no more. On its face the
properties are owned by Donata Montemayor, a widow. The PNB had no reason to
doubt nor question the status of said registered owner and her ownership
thereof. Indeed, there are no liens and encumbrances covering the same.

The well-known rule in this jurisdiction is that a person dealing with a registered
land has a right to rely upon the face of the torrens certificate of title and to
dispense with the need of inquiring further, except when the party concerned has
actual knowledge of facts and circumstances that would impel a reasonably
cautious man make such inquiry. 9
A torrens title concludes all controversy over ownership of the land covered by a
final degree of registration. 10 Once the title is registered the owner may rest
assured without the necessity of stepping into the portals of the court or sitting in
the mirador de su casa to avoid the possibility of losing his land. 11
Article 160 of the Civil Code provides as follows:
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.
The presumption applies to property acquired during the lifetime of the husband
and wife. In this case, it appears on the face of the title that the properties were
acquired by Donata Montemayor when she was already a widow. When the
property is registered in the name of a spouse only and there is no showing as to
when the property was acquired by said spouse, this is an indication that the
property belongs exclusively to said spouse. 12 And this presumption under
Article 160 of the Civil Code cannot prevail when the title is in the name of only
one spouse and the rights of innocent third parties are involved. 13
The PNB had a reason to rely on what appears on the certificates of title of the
properties mortgaged. For all legal purposes, the PNB is a mortgagee in goodfaith
for at the time the mortgages covering said properties were constituted the PNB
was not aware to any flaw of the title of the mortgagor. 14
True it is that in the earlier cases decided by this Court, namely Vitug VS.
Montemayor decided on May 15, 1952, which is an action for recovery of
possession of a share in said parcels of land, 15 and in the subsequent action for
partition between the same parties decided on Oct. 20, 1953, 16 this court found
the 30 parcels of land in question to be conjugal in nature and awarded the
corresponding share to the property of Florencia Vitug, an heir of the late
Clodualdo Vitug from the first marriage. In said cases this Court affirmed the

decision of the lower court. In the dispositive part of the decision of the trial court
it made the observation that "but from the conduct of Clodualdo Vitug and
Donata Montemayor during the existence of their marital life, the inference is
clear that Clodualdo had the unequivocal intention of transmitting the full
ownership of the 30 parcels of land to his wife Donata Montemayor, thus
considering the 1/2 of the funds of the conjugal property so advanced for the
purchase of said parcels of land as reimbursible to the estate of Clodualdo Vitug
on his death. 17 That must be the reason why the property was registered in the
name of Donata Montemayor as widow after the death of Clodualdo Vitug. 18
At any rate, although actions for recovery of real property and for partition are
real actions, however, they are actions in personam that bind only the particular
individuals who are parties thereto. 19 The PNB not being a party in said cases is
not bound by the said decisions. Nor does it appear that the PNB was aware of
the said decisions when it extended the above describe mortgage loans. Indeed,
if the PNB knew of the conjugal nature of said properties it would not have
approved the mortgage applications covering said properties of Donata
Montemayor without requiring the consent of all the other heirs or co-owners
thereof. Moreover, when said properties were sold at public auction, the PNB was
a purchaser for value in good faith. So its right thereto is beyond question. 20
Pragmacio and Maximo Vitug are now estopped from questioning the title of
Donata Montemayor to the said properties. They never raised the conjugal nature
of the property nor took issue as to the ownership of their mother, Donata
Montemayor, over the same. Indeed private respondents were among the
defendants in said two cases wherein in their answers to the complaint they
asserted that the properties in question are paraphernal properties belonging
exclusively to Donata Montemayor and are not conjugal in nature. 21 Thus they
leased the properties from their mother Donata Montemayor for many years
knowing her to be the owner. They were in possession of the property for a long
time and they knew that the same were mortgaged by their mother to the PNB
and thereafter were sold at public auction, but they did not do anything. 22 It is
only after 17 years that they remembered to assert their rights. Certainly, they
are guilty of laches. 23
Moreover, as correctly held by the lower court. Pragmacio and Maximo Vitug as
occupants and lessees of the property in question cannot now dispute the
ownership of their mother over the same who was their lessor. 24

WHEREFORE, the subject decision of the respondent Court of Appeals is hereby


REVERSED and set aside and another decision is hereby rendered DISMISSING
the complaint and ordering private respondents to pay attomey's fees and
expenses of litigation to petitioner PNB in the amount of P20,000.00 and the
costs of the suit.

The facts of the case, up to the time the second appeal (G.R. No. L-4130) was taken by
the executrix to this Court, were summed up in our 1953 decision as follows:
Narciso A. Padilla died February 12, 1934, leaving a childless widow, Concepcion
Paterno, whom he had married in 1912. His last will, which was probated in due
course, instituted his mother, Ysabel Bibby Vda. de Padilla, as universal heiress.

SO ORDERED.

Republic of the Philippines


SUPREME COURT
Manila
EN BANC
G.R. No. L-8748

December 26, 1961

TESTATE ESTATE OF NARCISO A. PADILLA, deceased. ISABEL B. VDA. DE


PADILLA, executrix-appellant,
vs.
CONCEPCION PATERNO, administratrix-appellee.
Padilla Law Office and Associates for executrix-appellant.
Claro M. Recto for administratrix-appellee.
REYES, J.B.L., J.:
This appeal from an order of the probate court in the special proceeding for the
settlement of the testate estate of the deceased Narciso A. Padilla involves the same
properties that had already been the subject-matter of two earlier appeals also brought to
this Court by the executrix-appellant Isabel B. Vda. de Padilla, G.R. No. 48137 decided
October 4, 1943, during the war, and G.R. No. L-4130, decided September 30, 1953,
after the war.

In the proceedings for the settlement of his estate in Manila (Civil Cases 4605863), his widow moved for delivery of her paraphernal property together with some
reimbursements and indemnities, and for one-half of the conjugal partnership
property. She also asked that her usufructuary right as surviving spouse be
imposed on the corresponding portion of her husband's assets. The heiress, who
was executrix, opposed several such claims.
After hearing evidence on both sides, the Court rendered on January 15, 1940, a
decision which, as amended by its resolution of April 24, 1940, declared as
paraphernal certain personal and real properties. Other realties, although
originally paraphernal, were considered part of the conjugal assets because of
buildings erected thereon during coverture, but reimbursement of their value was
directed. The main bulk was adjudged conjugal property. The Court ordered the
appointment of commissioners to estimate the amounts to be reimbursed, to
divide the matrimonial assets into two equal parts for the spouses, and to
determine the specific portion of the deceased's estate to be encumbered with
the widow's usufruct (/3). Other minor directives are omitted for the sake of
brevity.
The executrix appealed to this Supreme Court, wherein, dated October 4, 1943,
a decision was promulgated upholding the judgment of the Manila court with a
slight modification as to payment of interest.
(That year Concepcion Paterno died. She is now represented by her testate heirs
and legatees.)
For compliance with the decision, the records went back to the Manila court.
Therein three commissioners were duly appointed: Vicente A. Rufino, chosen by
the widow's side, Augusto J. D. Cortes by the heiress-executrix, and V. R.
Endaya by the Court.

After hearings held before the said committee (May-November, 1947), Vicente A.
Rufino submitted his report dated July 9, 1948 which was concurred in toto by V.
R. Endaya. A few days later Augusta J. D. Cortes filed his own report, wholly at
variance with his colleague's recommendations on many important particulars.
In December, 1948, counsel for the executrix interposed legal and factual
objections to the Rufino report. In May, 1949, Atty. Claro M. Recto, for the
Paterno relatives, replied to said objections and prayed that they be overruled
with the approval the aforesaid report.
On July 3, 1950, Judge Rafael Amparo of the Manila Court approved the majority
report except that he declared: (1) lot No. 50 on Juan Luna Street was conjugal,
and (2) the usufruct of the widow shall be constituted on the one-third estate.
(Report on Appeal, pp. 149-151).
After the return of the records to the probate court for partition in accordance with our
decision in G.R. No. L-4130, which affirmed the decision appealed from with the
exception of the modification that one piece of property (the R. Hidalgo property)
adjudicated to the widow was assigned instead to the estate of the deceased, in
exchange for another property (in Azcarraga-Reina Regente) given to the widow, and
after delivery by the executrix on December 7, 1953 of the properties constituting the
widow's share in the partition of the conjugal estate, the executrix, on March 3, 1954,
filed a petition for the final closure of the testate proceedings. A day before the filing of
this petition, however, the trial court had issued an order, upon motion of the
administratrix of the estate of the widow Concepcion Paterno, for a final accounting of
the 1951, 1952, and 1953 credit balances of the estate, and to determine the rentals or
income of those properties found to be paraphernal assets of the widow, so that the
undelivered portions of said rentals could be turned over to the widow's estate.
Accordingly, the estate of the widow opposed the petition for closure pending the final
accounting required of the executrix in the court's order of March 2, 1954; and also
pending determination of the share of the widow in the additional value of the R. Hidalgo
property, due to the construction of the Illusion Theater, that in 1952 would become
property of the owner of the land. The administratrix of the widow's estate likewise
sought an amendment of the court's order of March 2, 1954, so as to require the
executrix to account for the undelivered rentals or fruits of the widow's paraphernal
properties from October 5, 1938, when the executrix started her administration, until
December 7, 1953, when they were finally turned over to the widow's estate.

On March 15, 1954, the executrix submitted an accounting of the credit balances of the
estate for the years 1951, 1952, and 1953, but in subsequent pleadings objected to the
accounting of the fruits of the properties declared to be paraphernal on the theory that (1)
said properties were actually held conjugal, subject only to paraphernal claims; and that
(2) consequently, their income belonged to the conjugal estate and had been periodically
divided equally between the executrix as the universal heir of the deceased and the
widow's estate. As for the R. Hidalgo property, the executrix also objected to any further
determination of an additional share of the widow on the improvements thereon, claiming
that the widow's estate was bound by the value of P189,240 given to this property by the
Rufino report from which the administratrix of the widow's estate did not appeal.
Reply and counter-reply having been filed by the parties on the above issues, the
probate court finally resolved the same in its order of July 31, 1954, the pertinent portions
of which are as follows:
The questions that should be passed upon by this Court are those raised by the
administratrix of the estate of Concepcion Paterno in her motion for
reconsideration, to wit: (1) Should the herein executrix be made to account for
the income of the paraphernal properties belonging to Concepcion Paterno as
prayed for by said administratrix? (2) Is it necessary to determine the additional
value of the R. Hidalgo property as sought by said administratrix?
The answer to the first question is in the affirmative. The Civil Code of 1889
provided that upon dissolution of marriage the husband or his heirs may be
compelled to make immediate restitution of the paraphernal property which has
been turned over to the husband for administration (Art. 1391 in connection with
Art. 1369). The Code of Civil Procedure provided in its Section 726 that 'where a
deceased person in his lifetime held lands in trust for another person, the court
may, after notice given as required in the preceding section, grant license to the
executor or administrator, and the person, his executor, or administrator, for
whose use and benefit they are holders; and the court may decree the execution
of such trust, whether created by deed or by law.' Upon the death of Narciso
Padilla his marriage with Concepcion Paterno was dissolved. From the moment
of his death, his heir was bound to return the paraphernal properties of
Concepcion Paterno, and from said moment any income or fruit derived from
said paraphernal properties belonged to the owner thereof. It is contended by the
executrix herein that the properties under administration in this proceeding are
conjugal subject to the paraphernal claims of the widow, Concepcion Paterno,

and that the rentals from one or the other property cannot be excluded 'for such
exclusions cannot be justified, as the definite character of the properties as
adjudicated in favor of the wife or of the husband became absolute and definite
only after the decision of the Hon. Supreme Court late in 1953'. This contention is
not well taken, because the determination made by the Supreme Court of the
character of the properties in question retroacts to the date Narciso Padilla died.
It appears that Ysabel Bibby was appointed special administratrix in this
proceeding on August 29, 1938.
The other question refers to the R. Hidalgo property. With respect to this property,
the Supreme Court in its decision in G.R. No. L-4130 said
This Illusion Theatre was not reckoned with in the Rufino report.
Apparently it would pass to the estate in 1952 upon the occurrence of
specified contingencies. If it has passed the matter could undoubtedly be
the subject of further deliberation upon appropriate motions. It would only
be a question of determining the additional value of the R. Hidalgo
property and of requiring the herein appellant to pay the Paterno estate
its corresponding share.
The above quoted portion of the decision is clear and needs no further
elucidation.
WHEREFORE, the executrix herein is directed to submit within ten (10) days
from receipt of this order an accounting of the income of the paraphernal
properties in question covering the period from August 29, 1938 to December 7,
1953.
Regarding the R. Hidalgo property, this proceeding is hereby set for hearing on
August 19, 1954, at 8:30 a.m. for the purpose of determining the additional value
of said property in consonance with the above indicated decision of the Supreme
Court.
The executrix herein is hereby authorized and directed to deliver immediately to
the estate of Concepcion Paterno the one-half portion of the credit balance on
the 1953 annual accounting.

The consideration of the prayer to close this proceeding is hereby deferred until
the accounting herein above called for shall have been submitted and passed
upon and the additional value of the R. Hidalgo property shall have been
determined.
Let the corrections indicated by the administratrix of the estate of Concepcion
Paterno be made.
IT IS SO ORDERED.
(Record on Appeal, pp. 60-62.)
The executrix sought but failed to have the above order reconsidered; whereupon, she
filed this her third appeal before this Court. 1
The executrix-appellant assigns six errors, which may be reduced to the following
propositions:
(1) That the lower court erred in holding that some of the properties included in the estate
are paraphernal in character and that all their income belonged to the widow Concepcion
Paterno;
(2) That the widow having already raised the question of her right to all the fruits of her
alleged paraphernal properties in a petition for the liquidation of their fruits filed before
the probate court even before the war, and no fruits having been awarded to her by the
probate court in its decision of January 15, 1940, as amended by its resolution of April
24, 1940, or by this Court in its 1954 decision in G.R. No. 48137 or in its 1953 decision in
G.R. No. L-4130, the widow or her estate is now barred from raising again the question
of her exclusive right to such fruits either by the principle of res judicata or that of
conclusiveness of judgment;
(3) As to the R. Hidalgo property of the estate, the lower court erred in sustaining the
additional claim of the widow's estate over the improvements therein.
In support of her first proposition, that the lower court erred in holding that some of the
properties in the estate are paraphernal and that all their income belonged the widow
Concepcion Paterno, the executrix-appellant claims that our decision in G.R. No. L-4130
did not declare any properties in the estate of the deceased Narciso A. Padilla

paraphernal, but that certain properties therein were declared "conjugal assets, subject
to paraphernal claims", and that this decision is the "law of the case" in this incident and
appeal.
The above argument appears to be a mere reiteration of the claims already urged by this
same appellant in G.R. No. L-4130, where she similarly argued that the probate court,
and this Court in G.R. No. 48137, did not hold any properties in the estate paraphernal,
but the certain properties therein were declared conjugal partnership properties, with the
widow being entitled to reimbursement for the value of her paraphernal claims (see
Appellant's Brief in G.R. No. L-4130, pp. 70-71, 103, 106). Rejecting this argument in our
decision in G.R. No. L-4130, we said:
The Rufino report which is printed in full on pages 169-192 of the Record on
Appeal, states that the buildings constructed by the partnership on the two lots
were destroyed by fire during the battle of liberation of Manila in 1945. Then it
goes on to adjudicate:
As already stated, the conjugal improvements on the lots on Arquiza and
Juan Luna have been destroyed by fire, and the Supreme Court having
held that the lands on which said improvements were erected remained
paraphernal until the value of said lands were paid to the widow
Concepcion Paterno Vda. de Padilla, said lands must be returned to the
Testate Estate of Concepcion Paterno Vda. de Padilla.
However, any amount due or that may be received from the War Damage
Commission for the improvements that were destroyed on those two
pieces of property shall be divided share and share alike between the
estate of Ysabel Bibby Vda. de Padilla and the estate of Concepcion
Paterno Vda. de Padilla. (Record on Appeal, p. 177).
The executrix earnestly challenges the first paragraph contending that the lots
became conjugal properties from the time the buildings were erected thereon,
and the subsequent destruction of such buildings did not make them
paraphernal. She also argues that the indemnity to the widow for said lots should
be their value at the time of the construction of the buildings, or at most, at the
time of the dissolution of the partnership in 1934.

These contentions may not be upheld in view of the decision of the Manila Court
and the confirmatory decision of this Tribunal in 1943. There are, to be sure,
some propositions in said decision which we may now hesitate to ratify,
especially the pronouncement that the lot continued to be paraphernal until its
value had been actually paid. But that judgment is now the law of the case.
(Record on Appeal, pp. 151-152).
In other words, we maintained in G.R. No. L-4130, as the law of the case, our previous
decision in G.R. No. 48137 that
The ownership of the land is retained by the wife until she is paid the value of the
lot, as a result of the liquidation of the conjugal partnership. The mere
construction of a building from common funds does not automatically convey the
ownership of the wife's land to the conjugal partnership. (Record on Appeal, p.
138).
Considering that our decision in G.R. No. L-4130 is, in executrix-appellant's own words,
"the last and final decision of this Honorable court intended to definitely settle and close
this estate" (Appellant's Brief, p. 49), and that the "law of the case" in this appeal are all
the previous decisions herein, "including the 1953 decision G.R. No. L-4130" (idem, p.
17), the dispositions made in our decision in G.R. No. L-4130 should be considered as
final and conclusive on the parties in this case and its incidents.
But to what extent does the "law of the case", as expressed in the above decisions, bear
on the more important question in this appeal namely, the alleged exclusive right of
widow Concepcion Paterno to all the fruits of the properties of the estate declared
paraphernal from the time the conjugal partnership was terminated by the death of the
husband Narciso A. Padilla up to their final delivery to the estate of the widow
Concepcion Paterno on December 7, 1953?
On this matter, we must perforce distinguish those paraphernal properties that did not
cease to be such all throughout and were, accordingly, turned over to the widow's estate
on December 7, 1953, from those that, having been paid or indemnified in full to the
widow upon the final partition and division of the conjugal estate, had finally been
converted into conjugal assets. To determine the properties that belong to either class,
we must go back to the records of these settlement proceedings before this appeal, the
proceedings taken in the court below in the course of the execution of our final judgment
in G.R. No. L-4130.

Let us recall that in its original resolution of January 15, 1940, the probate court found
the following properties to be paraphernal:
(1) the lot at 305 Arquiza Street and the demolished improvements therein;
(2) the lot at 1393-1409 Juan Luna Street and the improvements therein that had
been torn down;

As already stated, the conjugal improvements on the lots on Arquiza and Juan
Luna have been destroyed by fire, and the Supreme Court having held that the
lands in which said improvements were erected remained paraphernal until the
value of said lands were paid to the widow Concepcion Paterno Vda. de Padilla,
said lands must be returned to the Testate Estate of Concepcion Paterno Vda. de
Padilla, (Record on Appeal in G.R. L-4130, p. 177).
(2) As to the Camba property:

(3) the lot and improvements (except the building constructed during the
marriage) at 401-407 Camba Street;
(4) that lot at 613-631 and 634-636 Martin Ocampo Street, with the original
"accesorias" and a camarin which was destroyed in order that new "accesorias"
might be constructed, these new "accesorias" being conjugal property;
(5) the property at 620-H, Callejon De la Fe;
(6) one-half of the property at 631 Regidor Street; and
(7) 9/29 of the property at 302-306 R. Hidalgo Street. (Record on Appeal, pp.
133-134).
The findings of the probate court as to the nature of the above properties were
affirmed in toto by this Court in our decision in G.R. No. 48137 dated October 4, 1943.
After the above-mentioned decision was returned to the lower court for execution, the
battle for the liberation of Manila supervened and as a result of the general conflagration
in the city sometime in February, 1945, the conjugal buildings on the Arquiza and Juan
Luna properties were completely destroyed. As for the property at 631 Regidor Street,
the same was later expropriated by the government.
When the commissioners appointed to execute the judgment submitted their report,
therefore, the majority of the commissioners (whose report, otherwise known as the
"Rufino Report," the lower court approved) made the following recommendations:
(1) As to the Arquiza and Juan Luna properties, the improvements of which were
destroyed during the battle for the liberation of Manila:

According to the evidence presented, the portion of this lot located right at the
corner of San Nicolas and Camba Streets, otherwise known as Lot No. 6-A, and
the building existing thereon, are both paraphernal properties. They should,
therefore, be delivered to the Testate Estate of Concepcion Paterno Vda. de
Padilla.
The portion of said lot which is otherwise known as Lot No. 6-B likewise originally
paraphernal, but a building was erected thereon by the conjugal partnership, so
that it would become conjugal partnership property upon the reimbursement to
the wife of its present value. According to the evidence, Lot No. 6-B has an area
of 83.422 sq. ms., and the present value thereof per square meter is P30.00.
This Testate Estate, therefore, should reimburse the Testate Estate of
Concepcion Paterno Vda. de Padilla in the sum of P2,502.66. After said
reimbursement, Lot No. 6-B and the existing improvement thereon shall become
conjugal partnership property and should be divided accordingly for purposes of
distribution. (Record on Appeal in L-4130, pp. 179-80).
(3) As to the Martin Ocampo property:
According to the evidence the portion of the lot occupied by paraphernal building
or the accesoria otherwise known as Nos. 612, 614, 616, 620, 624, 626, 628
Quezon Boulevard, has a total area of 360.5 sq. m.; while the interior portion of
said lot actually occupied by the accesoria constructed during the marriage of the
spouses contained an area of 528.1 sq. ms. This interior portion is the one which
must be appraised by the Commissioners, and its value reimbursed to the Estate
of Concepcion Paterno Vda. de Padilla, in view of the ruling of the Court that "el
valor actual del suelo ocupado por dicha accesoria construida durante el
matrimonio se determinara por los Comisionados y se adjudicara a la Viuda en
concepto de indemnizacion." The outer portion of 360.5 sq. ms. having been

declared paraphernal property, should be delivered to the Estate of Concepcion


Paterno Vda. de Padilla.
The evidence further shows that the reasonable value of said interior portion is
P125 per sq. m., so that the amount to be reimbursed is P66,012.50. As soon as
said reimbursement is made, said portion of the lot and the buildings existing
thereon as conjugal property should be divided accordingly for purposes of
distribution. (Record on Appeal, Ibid, p. 181)
(4) As to the Callejon De la Fe property:
In view of the fact that finding of the Supreme Court was that this property and
the improvement which used to exist thereon were both paraphernal, the lot
should be delivered to the Testate Estate of Concepcion Paterno Vda. de Padilla
and whatever amount is paid by the War Damage Commission as compensation
for the destruction of said building should also be totally paid to it. (Record on
appeal, ibid, p. 182).
(5) As to the Regidor property, which was expropriated by the government:
The compensation received for the expropriation of the Regidor property, should
be divided between the spouses in accordance with the finding of the decision of
the Supreme Court as to the character of said property. (Ibid, p. 192)
(6) And as to R. Hidalgo property:
The R. Hidalgo property is partly conjugal and partly paraphernal. Nine-twentyninths thereof belong to the Testate Estate of Concepcion Paterno Vda. de
Padilla as paraphernal property, ten-twenty-ninths thereof belong to it as share in
the conjugal partnership, while the remaining ten-twenty-ninths should belong to
Da. Isabela B. Vda. de Padilla as her inheritance from the decedent herein. It
has a total area of 1962 square meters. At the rate of P200 per square meter, it
has a total value of P189,240.00.
The lot shall become conjugal property and divided accordingly after the Testate
Estate of Concepcion Paterno Vda. de Padilla shall have been reimbursed in the
sum of P58,729,67.

Any payment made by the War Damage Commission shall be divided in the same
proportion, to wit: nine-twenty-ninths shall belong to the Testate Estate of Concepcion
Paterno Vda. de Padilla, and the remaining ten-twenty-ninths shall belong to Da. Isabel
B. Vda. de Padilla. (Idem., pp. 182-183).
All the above recommendations were approved by the trial court, and in her appeal from
the order of approval (which is G.R. No. L-4130), wherein the executrix-appellant
specially protested against the declaration that upon the destruction of the improvements
on the Arquiza and Juan Luna properties, they remained paraphernal and must be
returned to the estate of the widow, as well as the recommendation to subdivide the
Camba and Martin Ocampo properties, declaring those portions thereof occupied by
paraphernal buildings as paraphernal and should be returned to the widow's estate, the
same recommendations were affirmed by this Court.
Considering, then, the "law of the case" in this appeal as expressed in the Rufino report
and approved by both the probate court and this Court in G.R. No. L-4130, we find no
error in the lower court's pronouncement that as sole owner of those properties that
never became conjugal because the conjugal improvements thereon were destroyed
before they could be paid for the widow (i.e., the Arquiza and Juan Luna properties), as
well as Lot No. 6-B on Camba Street, the outer portion of the Martin Ocampo lot, and the
Callejon de la Fe property, that never ceased to be paraphernal because there were
paraphernal buildings thereon at the time of the termination of the conjugal partnership,
the widow Concepcion Paterno is also the sole owner of all their income that accrued
during their administration by the executrix-appellant until they were finally delivered to
the estate of the deceased Concepcion Paterno on December 7, 1953; minus of course,
the administration expenses incurred by said executrix-appellant with respect to these
paraphernal properties. This is also in accordance with that portion of the Rufino report
making the following recommendation as to the rentals of said properties during the
period of settlement:
E. RENTALS AND OTHER INCOME DURING SETTLEMENT
For a complete liquidation of the estate under administration, the rentals from
real properties, and other income, such as proceeds from expropriation, etc.,
should be disposed in the following manner:
The rentals of property declared paraphernal, after deducting administration
expenses, must be delivered to the estate of Concepcion Paterno; while the

rentals from conjugal property, after deducting administration expenses, should


be divided equally between the heir of the husband and those of the wife....
(Record on Appeal in L-4130, p. 192).
Appellant claims that the above recommendation is void because the commissioners
appointed to execute our 1943 decision in G.R. No. 48137 were vested only with the
limited authority of putting said decision into effect, and said decision made no
disposition as to rentals or fruits of the paraphernal properties. This contention is
unmeritorious because the above recommendation was approved by the trial court in its
order of July 3, 1950, and by this Court in the 1953 decision in G.R. No. L-4130, and has
become part of the "law of the case;" as such it is now binding, conclusive, and
irrevocable in this appeal. Indeed, it nowhere, appears in the brief submitted by the
executrix-appellant
in
G.R.
No.
L-4130 that she then questioned the disposition, made by the Rufino report and by the
lower court, as to the rentals of the properties declared paraphernal during the period of
her administration, and it is now too late for her to raise this objection many years after
our decision in L-4130 had become final and executory. With this result, it becomes
unnecessary for us to discuss the executrix-appellant's proposition that the lower court
order of January 15, 1940, as amended by its resolution of April 24, 1940, and this
Court's decision in G.R. 48137, both of which came ahead of our decision in G.R. No. L4130, are res judicata by passing sub silentio this issue of the exclusive right of the
widow to the fruits of her paraphernal properties.
The above discussion does not, however, imply that the estate of the widow Concepcion
Paterno has also the exclusive right to the fruits of those properties which, although
originally paraphernal, had finally become converted to conjugal assets after their values
were reimbursed or paid to the estate of the widow Concepcion Paterno in the final
partition and division of the estate left by the deceased Narciso A. Padilla. These
properties are the following:
(1) Lot No. 6-B of the Camba property;
(2) The interior portion of the Martin Ocampo property; and
(3) the 9/29 share of the widow in the R. Hidalgo property.
As to the above properties, their conversion from paraphernal to conjugal assets should
be deemed to retroact to the time the conjugal buildings were first constructed thereon or

at the very latest, to the time immediately before the death of Narciso A. Padilla that
ended the conjugal partnership. They can not be considered to have become conjugal
property only as of the time their values were paid to the estate of the widow Concepcion
Paterno because by that time the conjugal partnership no longer existed and it could not
acquire the ownership of said properties. The acquisition by the partnership of these
properties was, under the 1943 decision, subject to the suspensive condition that their
values would be reimbursed to the widow at the liquidation of the conjugal partnership;
once paid, the effects of the fulfillment of the condition should be deemed to retroact to
the date the obligation was constituted (Art. 1187, New Civil Code). As a consequence,
all the fruits of these properties, after the dissolution of the partnership by the death of
the husband, until final partition, logically belonged to the universal heir of said husband
(his mother Isabel Bibby) and to the surviving widow in co-ownership, share and share
alike. As there has been periodical equal distribution between these two parties of the
current income of the estate, there is no need for the executrix-appellant to make any
new accounting for the fruits of these properties.
Coming now to the third issue in this appeal, namely, the right of the widow to an
additional share in the improvements on the R. Hidalgo property that was adjudicated to
the estate of the husband Narciso A. Padilla in the 1953 decision, G.R. No. L-4130, we
find and no merit to the claim of appellant that
When the R. Hidalgo property was appraised by the Rufino Report on July 9,
1948, at P189,240.00 and under such appraisement awarded to the estate of the
widow, we respectfully submit that the value as appraised included not only the
land but also the improvement which was then already existing, the same having
been built in 1947.
because the Rufino report states in clear and unmistakable terms that only the land was
appraised in the report and only its value included in the project of partition:
The R. Hidalgo property is partly conjugal and partly paraphernal. Nine-twentyninths thereof belongs to the Testate Estate of Concepcion Paterno Vda. de
Padilla as paraphernal property, while ten-twenty-ninths thereof belongs to it as
share in the conjugal partnership, while the remaining ten-twenty-ninths should
belong to Da. Isabel B. Vda. de Padilla as her inheritance from the decedent
herein. It has a total area of 946.2 square meters. At the rate of P200 per square
meter, it has a total value of P189,240.00. The lot shall become conjugal property
and divided accordingly after the Testate Estate of Concepcion Paterno Vda. de

Padilla shall have been reimbursed in the sum of P58,729.67. (Record on Appeal
in L-4130, pp. 182-183)
Indeed, the Rufino report could not have included the value of the improvements at the
time the commissioners appraised this property for purposes of partition between the
parties, because the old improvements thereon were destroyed during the war and
whatever improvements were found therein by the commissioners in 1948 still belonged
to the lessee of said property. This was admitted in the executrix-appellant's own brief in
G.R. No. L-4130 (pp. 119-120), to wit:
The increase in the valuation of the share of the widow in the R. Hidalgo property
from P45,608.26 to P58,729.59 is certainly unjustified, considering, as above
stated, that the permanent improvements on the R. Hidalgo property were totally
destroyed by fire during liberation. Besides, if the property present has increased
in value, it is due to the executrix-appellant who, after liberation, entered into a
contract of lease with Cinema Operators, Inc., which built the Illusion Theatre and
the commercial establishments nearby. The improvements built by the lessee will
become the property of the estate of Narciso A. Padilla after the expiration of said
contract of lease.
lawphil.net

Hence, the footnote in our decision in L-4130 to the following effect:


This Illusion Theatre was not reckoned with in the Rufino report. Apparently it
would pass to the estate in 1952 upon the occurrence of certain specified
contingencies. If it has passed the matter could undoubtedly be the subject of
further deliberation upon appropriate motions. It would only be a question of
determining the additional value of the R. Hidalgo property and of requiring the
herein appellant to pay the Paterno estate its corresponding share. (Record on
Appeal, p. 157)
As correctly observed by the lower court in the order now appealed from, "the abovequoted portion of the decision is clear and needs no further elucidation" (Record on
Appeal p. 62).

Considering that the improvements on the R. Hidalgo property accrued to the owner of
the land only after the expiration of the seven-year lease entered into by the executrixappellant with the tenant on February 2, 1946, the lower court did not err in ordering the
appraisal of said improvement with the view of determining the additional share therein of
the widow Concepcion Paterno.
WHEREFORE, with the clarification that the accounting of the income of the paraphernal
properties to be made by the executrix-appellant should refer only to the Arquiza, Juan
Luna, and Callejon de la Fe properties, to Lot No. 6-A of the Camba property, and to the
outer portion of the Martin Ocampo property, the order appealed from is affirmed.
Without special pronouncement as to costs.
Bengzon, C.J., Bautista Angelo, Labrador, Barrera, Paredes, Dizon and De Leon,
JJ., concur.
Padilla and Concepcion, JJ., took no part.

With costs against the said defendants.

Republic of the Philippines


SUPREME COURT
Manila
EN BANC
G.R. No. L-21533

June 29, 1967

HERMOGENES MARAMBA, plaintiff-appellant,


vs.
NIEVES DE LOZANO, ET AL., defendants-appellees.
N. Tanopo, Jr. and Millora for plaintiff-appellant.
Manuel Ancheta and Bausa, Ampil and Suarez for defendants-appellees.

Not satisfied with the judgment, the defendants interposed an appeal to the Court of
Appeals but the appeal was dismissed on March 30, 1960 for failure of the defendants to
file their brief on time. After the record the case was remanded to the court a quo, a writ
of execution was issued, and on August 18, 1960 levy was made upon a parcel of land
covered by transfer certificate title No. 8192 of Pangasinan in the name of Nieves de
Lozano. The notice of sale at public auction was published in accordance with law and
scheduled for September 16, 1960.
On that date, however, defendant Nieves de Lozano made a partial satisfaction of the
judgment in the amount P2,000.00, and requested for an adjournment of the sale to
October 26, 1960. On October 17, 1960, she filed amended motion, dated October 14,
alleging that on November 11, 1952, during the pendency of the case, defendant Pascual
Lozano died and that the property levied upon was her paraphernal property, and praying
that her liability be fixed at one-half () of the amount awarded in the judgment and that
pending the resolution of the issue an order be issued restraining the Sheriff from
carrying out the auction sale scheduled on October 26, 1960.
On that date the sale proceeded anyway, and the property of Nieves de Lozano which
has been levied upon was sold to the judgment creditor, as the highest bidder, for the
amount of P4,175.12, the balance of the judgment debt.
1wph1.t

MAKALINTAL., J.:
Appeal from an order of the Court of First Instance of Dagupan City in its Civil Case No.
10485, dated June 28, 1961. This case was originally brought to the Court of Appeals,
but subsequently certified to Us on the ground that the issues raised are purely legal.
It appears that on November 3, 1948, the plaintiff filed an action against the defendant
Nieves de Lozano and her husband Pascual Lozano for the collection of a sum of
money. After trial, the court a quo on June 23, 1959 rendered its decision, the dispositive
part of which is as follows:
WHEREFORE, the court hereby renders judgment, sentencing the defendants
herein, Nieves de Lozano and Pascual Lozano, to pay unto the herein plaintiff,
Hermogenes Maramba, the total sum of Three Thousand Five Hundred Pesos
and Seven Centavos (P3,500.07), with legal interest thereon from date of the
filing of the instant complaint until fully paid.

On October 27, 1960, plaintiff filed an opposition to the defendant's amended motion
dated October 14, 1960. And on June 28, 1961, the trial court issued the questioned
order, the dispositive part of which is as follows:
WHEREFORE, the court hereby grants the motion of counsel for defendant
Nieves de Lozano, dated October 5, 1960, which was amended on October 14,
1960, and holds that the liability of the said defendant under the judgment of
June 23, 1959, is only joint, or P1,750.04, which is one-half () of the judgment
debt of P3,500.07 awarded to the plaintiff and that the writ of execution be
accordingly modified in the sense that the liability of defendant Nieves de Lozano
be only P1,750.04 with legal interest from the date of the filing of the complaint
on November 5, 1948 until fully paid, plus the amount of P21.28 which is also
one-half () of the costs taxed by the Clerk of Court against the defendant
spouses. Let the auction sale of the above-mentioned property of defendant
Nieves de Lozano proceed to satisfy her liability of P1,750.04 with legal interest

as above stated and the further sum of P21.28 representing the costs, unless
she voluntarily pays the same to the judgment creditor (herein plaintiff).
Plaintiff interposed an appeal from the above-quoted order and assigned several errors,
which present three major issues, to wit:
(a) whether or not the decision of the lower court dated June 23, 1959 could still
be questioned;
(b) whether or not the judgment was joint or solidary; and
(c) whether or not the judgment debt could be satisfied from the proceeds of the
properties sold at public auction.
Plaintiff-appellant submits that a "nunc pro tunc" order should have been issued by the
trial court dismissing, as of November 11, 1952, the case against the late Pascual
Lozano by reason of his death, and that the lower court should have corrected its
decision of June 23, 1959, by striking out the letter "s" in the word "defendants" and
deleting the words "and Pascual Lozano."
We do not think that the action suggested would be legally justified. It would entail a
substantial amendment of the decision of June 23, 1959, which has long become final
and in fact partially executed. A decision which has become final and executory can no
longer be amended or corrected by the court except for clerical errors or mistakes, 1 and
however erroneous it may be, cannot be disobeyed;2 otherwise litigations would be
endless and no questions could be considered finally settled. 3 The amendment sought by
appellee involves not merely clerical errors but the very substance of the controversy.
And it cannot be accomplished by the issuance of a "nunc pro tunc" order such as that
sought in this case. The purpose of an "nunc pro tunc" is to make a present record of an
which the court made at a previous term, but which not then recorded. It can only be
made when the ordered has previously been made, but by inadvertence not been
entered. In the instant case there was no order previously made by the court and
therefore there is no now to be recorded.

Now then, it is clear that the decision of June 23, 1959 does not specify the extent of the
liability of each defendant. The rule is that when the judgment does not order the
defendants to pay jointly and severally their liability is merely joint, and none of them may
be compelled to satisfy the judgment in full. This is in harmony with Articles 1137 and
1138 of the Civil Code.
Plaintiff-appellant contends that in any event the entire judgment debt can be satisfied
from the proceeds the property sold at public auction in view of the presumption that it is
conjugal in character although in the of only one of the spouses. The contention is
incorrect. The presumption under Article 160 of the Civil Code to property acquired
during the marriage. But in the instant case there is no showing as to when the property
in question was acquired and hence the fact that the title is in the wife's name alone is
determinative. Furthermore, appellant himself admits in his brief (p. 17) that the property
in question is paraphernal.
Appellant next points out that even if the land levied upon were originally paraphernal, it
became conjugal property by virtue of the construction of a house thereon at the
expense of the common fund, pursuant to Article 158 paragraph 2 of the Civil Code.
However, it has been by this Court that the construction of a house at conjugal expense
on the exclusive property of one of the spouses doe not automatically make it conjugal. It
is true that meantime the conjugal partnership may use both in the land and the building,
but it does so not as owner but in the exercise of the right of usufruct. The ownership of
the land remains the same until the value thereof is paid, and this payment can only be
demanded in the liquidation of the partnership (Coingco vs. Flores, 82 Phil. 284; Paterno
vs. Bibby Vda. de Padilla, 74 Phil. 377; Testate Estate of Narciso Padilla, G.R.No. L8748, Dec. 26, 1961). The record does not show that there has already been a
liquidation of the conjugal partnership between the late Pascual Lozano and Nieves de
Lozano. Consequently, the property levied upon, being the separate property of
defendant Nieves de Lozano, cannot be made to answer for the liability of the other
defendant.
On May 18, 1967 counsel for defendants-appellees filed with Us a petition alleging, inter
alia; that prior to the expiration of the redemption period and pursuant to an order of the
lower court defendants filed a surety bond in the amount of P3,175.12 as the redemption
price, which bond was duly approved by the lower court; that sometime last September
1966, defendants filed a petition before the lower court praying that the sheriff of
Pangasinan be ordered to execute the corresponding deed of redemption in favor of
defendant Nieves de Lozano represented by her judicial administrator or that, in the

alternative, the Register of Deeds of Dagupan City be directed to cancel Entries Nos.
19234 and 20042 at the back of TCT No. 8192; and that said petition was denied by the
lower court. The same prayer made below is reiterated in the said petition of May 18,
1967.

THE HONORABLE COURT OF APPEALS, Former Division, and ROMULO


NICOL, Respondents.

The foregoing petition of May 18, 1967 alleges facts which occurred after the perfection
of the present appeal and which should therefore be submitted to and passed upon by
the trial court in connection with the implementation of the order appealed from, which is
hereby affirmed, with costs.

TINGA, J.:

Concepcion, C.J., Reyes, J.B.L., Dizon, Bengzon, J.P., Zaldivar, Sanchez and Castro,
JJ., concur.

DECISION

Before this Court is a petition for certiorari assailing the Decision 1 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.2

Republic of the Philippines


SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 145222

April 24, 2009

SPOUSES ROBERTO BUADO and VENUS BUADO, Petitioners,


vs.

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.3
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,4 petitioners claimed that respondent should have filed the case with Branch
19 where the judgment originated and which issued the order of execution, writ of
execution, notice of levy and notice of sheriffs sale.
In an Order5 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. 6
Respondent moved for reconsideration but it was denied on 26 July 1994.
On appeal, the Court of Appeals reversed the trial court and held that Branch 21 has
jurisdiction to act on the complaint filed by appellant. The dispositive portion reads:
WHEREFORE, the Orders appealed from are hereby REVERSED and SET ASIDE. This
case is REMANDED to the Regional Trial Court of Imus, Cavite, Branch 21 for further
proceedings.
SO ORDERED.7
Petitioners motion for reconsideration was denied on 23 August 2000. Hence, the instant
petition attributing grave abuse of discretion on the part of the Court of Appeals.
A petition for certiorari is an extraordinary remedy that is adopted to correct errors of
jurisdiction committed by the lower court or quasi-judicial agency, or when there is grave
abuse of discretion on the part of such court or agency amounting to lack or excess of
jurisdiction. Where the error is not one of jurisdiction, but of law or fact which is a mistake
of judgment, the proper remedy should be appeal. In addition, an independent action for

certiorari may be availed of only when there is no appeal or any plain, speedy and
adequate remedy in the ordinary course of law.8
Nowhere in the petition was it shown that the jurisdiction of the Court of Appeals was
questioned. The issue devolves on whether the husband of the judgment debtor may file
an independent action to protect the conjugal property subject to execution. The alleged
error therefore is an error of judgment which is a proper subject of an appeal.
Nevertheless, even if we were to treat this petition as one for review, the case should still
be dismissed on substantive grounds.
Petitioners maintain that Branch 19 retained jurisdiction over its judgment to the
exclusion of all other co-ordinate courts for its execution and all incidents thereof, in line
with De Leon v. Salvador. Petitioners insist that respondent, who is the husband of the
judgment debtor, is not the "third party" contemplated in Section 17 (now Section 16),
Rule 39 of the Rules of Court, hence a separate action need not be filed. Furthermore,
petitioners assert that the obligation of the wife redounded to the benefit of the conjugal
partnership and cited authorities to the effect that the husband is liable for the tort
committed by his wife.
Respondent on the other hand merely avers that the decision of the Court of Appeals is
supported by substantial evidence and in accord with law and jurisprudence. 9
Verily, the question of jurisdiction could be resolved through a proper interpretation of
Section 16, Rule 39 of the Rules of Court, which reads:
Sec. 16. Proceedings where property claimed by third person.

If the property levied on is claimed by any person other than the judgment obligor or his
agent, and such person makes an affidavit of his title thereto or right to the possession
thereof, stating the grounds of such right or title, and serves the same upon the officer
making the levy and a copy thereof upon the judgment obligee, the officer shall not be
bound to keep the property, unless such judgment obligee, on demand of the officer, files
a bond approved by the court to indemnify the third-party claimant in a sum not less than
the value of the property levied on. In case of disagreement as to such value, the same
shall be determined by the court issuing the writ of execution. No claim for damages for
the taking or keeping of the property may be enforced against the bond unless the action
therefor is filed within one hundred twenty (120) days from the date of the filing of the
bond.
The officer shall not be liable for damages for the taking or keeping of the property, to
any third-party claimant if such bond is filed. Nothing herein contained shall prevent such
claimant or any third person from vindicating his claim to the property in a separate
action, or prevent the judgment obligee from claiming damages in the same or a
separate action against a third-party claimant who filed a frivolous or plainly spurious
claim.
When the writ of execution is issued in favor of the Republic of the Philippines, or any
officer duly representing it, the filing of such bond shall not be required, and in case the
sheriff or levying officer is sued for damages as a result of the levy, he shall be
represented by the Solicitor General and if held liable therefor, the actual damages
adjudged by the court shall be paid by the National Treasurer out of such funds as may
be appropriated for the purpose. (Emphasis Supplied)
Apart from the remedy of terceria available to a third-party claimant or to a stranger to
the foreclosure suit against the sheriff or officer effecting the writ by serving on him an
affidavit of his title and a copy thereof upon the judgment creditor, a third-party claimant
may also resort to an independent separate action, the object of which is the recovery of
ownership or possession of the property seized by the sheriff, as well as damages
arising from wrongful seizure and detention of the property. If a separate action is the
recourse, the third-party claimant must institute in a forum of competent jurisdiction an
action, distinct and separate from the action in which the judgment is being enforced,
even before or without need of filing a claim in the court that issued the writ. 10
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?"

To reiterate, conjugal property cannot be held liable for the personal obligation contracted
by one spouse, unless some advantage or benefit is shown to have accrued to the
conjugal partnership.17

In determining whether the husband is a stranger to the suit, the character of the
property must be taken into account. In Mariano v. Court of Appeals, 11 which was later
adopted in Spouses Ching v. Court of Appeals, 12 this Court held that the husband of the
judgment debtor cannot be deemed a "stranger" to the case prosecuted and adjudged
against his wife for an obligation that has redounded to the benefit of the conjugal
partnership.13 On the other hand, in Naguit v. Court of Appeals 14 and Sy v. Discaya,15 the
Court stated that a spouse is deemed a stranger to the action wherein the writ of
execution was issued and is therefore justified in bringing an independent action to
vindicate her right of ownership over his exclusive or paraphernal property.

In Guadalupe v. Tronco,18 this Court held that the car which was claimed by the third
party complainant to be conjugal property was being levied upon to enforce "a judgment
for support" filed by a third person, the third-party claim of the wife is proper since the
obligation which is personal to the husband is chargeable not on the conjugal property
but on his separate property.

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.

WHEREFORE, the petition is DISMISSED. The Decision of the Court of Appeals


is AFFIRMED. Costs against petitioners.

Petitioners argue that the obligation of the wife arising from her criminal liability is
chargeable to the conjugal partnership. We do not agree.

SO ORDERED.

lawphil.net

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.

There is no dispute that contested property is conjugal in nature. Article 122 of the Family
Code16 explicitly provides that payment of personal debts contracted by the husband or
the wife before or during the marriage shall not be charged to the conjugal partnership
except insofar as they redounded to the benefit of the family.
Unlike in the system of absolute community where liabilities incurred by either spouse by
reason of a crime or quasi-delict is chargeable to the absolute community of property, in
the absence or insufficiency of the exclusive property of the debtor-spouse, the same
advantage is not accorded in the system of conjugal partnership of gains. The conjugal
partnership of gains has no duty to make advance payments for the liability of the debtorspouse.
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.

FIRST DIVISION
[G.R. No. 143826. August 28, 2003]

HEIRS
OF
IGNACIA
AGUILAR-REYES, petitioners,
vs. SPOUSES CIPRIANO MIJARES AND FLORENTINA
MIJARES,respondents.
DECISION
YNARES-SANTIAGO, J.:
Under the regime of the Civil Code, the alienation or encumbrance of a
conjugal real property requires the consent of the wife. The absence of such
consent renders the entire transaction[1] merely voidable and not void.[2] The wife
may, during the marriage and within ten years from the transaction questioned,
bring an action for the annulment of the contract entered into by her husband
without her consent.[3]
Assailed in this petition for review on certiorari are the January 26, 2000
Decision[4] and June 19, 2000, Resolution [5] of the Court of Appeals in CA-G.R. No.
28464 which declared respondents as purchasers in good faith and set aside the
May 31, 1990 and June 29, 1990 Orders of the Regional Trial Court of Quezon
City, Branch 101, in Civil Case No. Q-48018.
The controversy stemmed from a dispute over Lot No. 4349-B-2,
approximately 396 square meters, previously covered by Transfer Certificate of
Title (TCT) No. 205445, located in Balintawak, Quezon City and registered in the
name of Spouses Vicente Reyes and Ignacia Aguilar-Reyes.[7] Said lot and the
apartments built thereon were part of the spouses conjugal properties having
been purchased using conjugal funds from their garments business.[8]
[6]

Vicente and Ignacia were married in 1960, but had been separated de
facto since 1974.[9] Sometime in 1984, Ignacia learned that on March 1, 1983,
Vicente sold Lot No. 4349-B-2 to respondent spouses Cipriano and Florentina
Mijares for P40,000.00.[10] As a consequence thereof, TCT No. 205445 was
cancelled and TCT No. 306087 was issued on April 19, 1983 in the name of
respondent spouses.[11] She likewise found out that Vicente filed a petition for
administration and appointment of guardian with the Metropolitan Trial Court of
Quezon City, Branch XXI. Vicente misrepresented therein that his wife, Ignacia,
died on March 22, 1982, and that he and their 5 minor children were her only

heirs.[12] On September 29, 1983, the court appointed Vicente as the guardian of
their minor children.[13] Subsequently, in its Order dated October 14, 1983, the
court authorized Vicente to sell the estate of Ignacia.[14]
On August 9, 1984, Ignacia, through her counsel, sent a letter to respondent
spouses demanding the return of her share in the lot. Failing to settle the matter
amicably, Ignacia filed on June 4, 1996 a complaint [15] for annulment of sale
against respondent spouses. The complaint was thereafter amended to include
Vicente Reyes as one of the defendants.[16]
In their answer, respondent spouses claimed that they are purchasers in
good faith and that the sale was valid because it was duly approved by the court.
[17]
Vicente Reyes, on the other hand, contended that what he sold to the spouses
was only his share in Lot No. 4349-B-2, excluding the share of his wife, and that
he never represented that the latter was already dead. [18] He likewise testified
that respondent spouses, through the counsel they provided him, took advantage
of his illiteracy by filing a petition for the issuance of letters of administration and
appointment of guardian without his knowledge.[19]
On February 15, 1990, the court a quo rendered a decision declaring the sale
of Lot No. 4349-B-2 void with respect to the share of Ignacia. It held that the
purchase price of the lot was P110,000.00 and ordered Vicente to return thereof
or P55,000.00 to respondent spouses. The dispositive portion of the said
decision, 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;

Further, defendant Vicente Reyes is ordered to pay the amount of P50,000.00 by


way of moral and exemplary damages, plus costs of this suit.
SO ORDERED.[21]

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.

On motion[22] of Ignacia, the court issued an Order dated June 29, 1990
amending the dispositive portion of the May 31, 1990 decision by correcting the
Transfer Certificate of Title of Lot No. 4349-B-2, in the name of Cipriano Mijares
and Florentina Mijares, from TCT No. 306083 to TCT No. 306087; and directing
the Register of Deeds of Quezon City to issue a new title in the name of Ignacia
Aguilar-Reyes and Vicente Reyes. The Order likewise specified that Vicente Reyes
should pay Ignacia Aguilar-Reyes the amount of P50,000.00 as moral and
exemplary damages.[23]

SO ORDERED.[20]
Ignacia filed a motion for modification of the decision praying that the sale be
declared void in its entirety and that the respondents be ordered to reimburse to
her the rentals they collected on the apartments built on Lot No. 4349-B-2
computed from March 1, 1983.
On May 31, 1990, the trial court modified its decision by declaring the sale
void in its entirety and ordering Vicente Reyes to reimburse respondent spouses
the purchase price of P110,000, thus
WHEREFORE, premises considered, judgment is hereby rendered declaring the
subject Deed of Absolute Sale, dated March 1, 1983 signed by and between
defendants Vicente Reyes and defendant Cipriano Mijares as null and void ab
initio, in view of the absence of the wifes conformity to said transaction.
Consequent thereto, the Register of Deeds for Quezon City is hereby ordered to
cancel TCT No. 306083 (sic) in the name of Cipriano Mijares and Florentin[a]
Mijares and issue a new TCT in the name of the plaintiff and defendant Ignacia
Aguilar-Reyes and Vicente Reyes as owners in fee simple, upon payment of
required fees therefore.
Defendant Vicente Reyes is hereby ordered to pay the amount of one hundred
ten thousand pesos (P110,000.00) with legal rate of interest at 12% per annum
from the execution of the subject Deed of Absolute Sale on March 1, 1983.

Both Ignacia Aguilar-Reyes and respondent spouses appealed the decision to


the Court of Appeals.[24] Pending the appeal, Ignacia died and she was substituted
by her compulsory heirs.[25]
Petitioners contended that they are entitled to reimbursement of the rentals
collected on the apartment built on Lot No. 4349-B-2, while respondent spouses
claimed that they are buyers in good faith. On January 26, 2000, the Court of
Appeals reversed and set aside the decision of the trial court. It ruled that
notwithstanding the absence of Ignacias consent to the sale, the same must be
held valid in favor of respondents because they were innocent purchasers for
value.[26] The decretal potion of the appellate courts decision states
WHEREFORE, premises considered, the Decision appealed from and the Orders
dated May 31, 1990 and June 29, 1990, are SET ASIDE and in lieu thereof a new
one is rendered
1. Declaring the Deed of Absolute Sale dated March 1, 1983 executed by Vicente
Reyes in favor of spouses Cipriano and [Florentina] Mijares valid and lawful;
2. Ordering Vicente Reyes to pay spouses Mijares the amount of P30,000.00 as
attorneys fees and legal expenses; and
3. Ordering Vicente Reyes to pay spouses Mijares P50,000.00 as moral damages.

No pronouncement as to costs.
SO ORDERED.[27]
Undaunted by the denial of their motion for reconsideration,[28] petitioners
filed the instant petition contending that the assailed sale of Lot No. 4392-B-2
should be annulled because respondent spouses were not purchasers in good
faith.
The issues for resolution are as follows: (1) What is the status of the sale of
Lot No. 4349-B-2 to respondent spouses? (2) Assuming that the sale is
annullable, should it be annulled in its entirety or only with respect to the share
of Ignacia? (3) Are respondent spouses purchasers in good faith?
Articles 166 and 173 of the Civil Code, [29] the governing laws at the time the
assailed sale was contracted, provide:
Art.166. Unless the wife has been declared a non compos mentis or a spendthrift,
or is under civil interdiction or is confined in a leprosarium, the husband cannot
alienate or encumber any real property of the conjugal partnership without the
wifes consent. If she refuses unreasonably to give her consent, the court may
compel her to grant the same
Art. 173. The wife may, during the marriage and within ten years from the
transaction questioned, ask the courts for the annulment of any contract of the
husband entered into without her consent, when such consent is required, or any
act or contract of the husband which tends to defraud her or impair her interest
in the conjugal partnership property.Should the wife fail to exercise this right, she
or her heirs after the dissolution of the marriage, may demand the value of
property fraudulently alienated by the husband.

Pursuant to the foregoing provisions, the husband could not alienate or


encumber any conjugal real property without the consent, express or implied, of
the wife otherwise, the contract is voidable. Indeed, in several cases[30] the Court
had ruled that such alienation or encumbrance by the husband is void. The better
view, however, is to consider the transaction as merely voidable and not void.
[31]
This is consistent with Article 173 of the Civil Code pursuant to which the wife
could, during the marriage and within 10 years from the questioned transaction,
seek its annulment.[32]
In the case of Heirs of Christina Ayuste v. Court of Appeals,[33] it was
categorically held that
There is no ambiguity in the wording of the law. A sale of real property of the
conjugal partnership made by the husband without the consent of his wife is
voidable. The action for annulment must be brought during the marriage and
within ten years from the questioned transaction by the wife. Where the law
speaks in clear and categorical language, there is no room for interpretation
there is room only for application.[34]
Likewise, in Spouses Guiang v. Court of Appeals,[35] the Court quoted with
approval the ruling of the trial court that under the Civil Code, the encumbrance
or alienation of a conjugal real property by the husband absent the wifes consent,
is voidable and not void. Thus
Under Article 166 of the Civil Code, the husband cannot generally alienate or
encumber any real property of the conjugal partnership without the wifes
consent. The alienation or encumbrance if so made however is not null and
void. It is merely voidable. The offended wife may bring an action to annul the
said alienation or encumbrance. Thus, the provision of Article 173 of the Civil
Code of the Philippines, to wit:
Art. 173. The wife may, during the marriage and within ten years from the
transaction questioned, ask the courts for the annulment of any contract of the
husband entered into without her consent, when such consent is required, or any
act or contract of the husband which tends to defraud her or impair her interest
in the conjugal partnership property.Should the wife fail to exercise this right, she
or her heirs after the dissolution of the marriage, may demand the value of
property fraudulently alienated by the husband.

This particular provision giving the wife ten (10) years x x x during [the]
marriage to annul the alienation or encumbrance was not carried over to the
Family Code. It is thus clear that any alienation or encumbrance made after
August 3, 1988 when the Family Code took effect by the husband of the conjugal
partnership property without the consent of the wife is null and void
In the case at bar, there is no dispute that Lot No. 4349-B-2, is a conjugal
property having been purchased using the conjugal funds of the spouses during
the subsistence of their marriage. It is beyond cavil therefore that the sale of said
lot to respondent spouses without the knowledge and consent of Ignacia is
voidable. Her action to annul the March 1, 1983 sale which was filed on June 4,
1986, before her demise is perfectly within the 10 year prescriptive period under
Article 173 of the Civil Code. Even if we reckon the period from November 25,
1978 which was the date when Vicente and the respondent spouses entered into
a contract concerning Lot No. 4349-B-2, Ignacias action would still be within the
prescribed period.
Anent the second issue, the trial court correctly annulled the voidable sale of
Lot No. 4349-B-2 in its entirety. In Bucoy v. Paulino,[36] a case involving the
annulment of sale with assumption of mortgages executed by the husband
without the consent of the wife, it was held that the alienation or encumbrance
must be annulled in its entirety and not only insofar as the share of the wife in
the conjugal property is concerned. Although the transaction in the said case was
declared void and not merely voidable, the rationale for the annulment of the
whole transaction is the same thus
The plain meaning attached to the plain language of the law is that the contract,
in its entirety, executed by the husband without the wife's consent, may be
annulled by the wife. Had Congress intended to limit such annulment in so far as
the contract shall prejudice the wife, such limitation should have been spelled out
in the statute. It is not the legitimate concern of this Court to recast the law. As
Mr. Justice Jose B. L. Reyes of this Court and Judge Ricardo C. Puno of the Court
of First Instance correctly stated, [t]he rule (in the first sentence of Article 173)
revokes Baello vs. Villanueva, 54 Phil. 213 and Coque vs. Navas Sioca, 45 Phil.
430, in which cases annulment was held to refer only to the extent of the onehalf interest of the wife

The necessity to strike down the contract of July 5, 1963 as a whole, not merely
as to the share of the wife, is not without its basis in the common-sense rule. To
be underscored here is that upon the provisions of Articles 161, 162 and 163 of
the Civil Code, the conjugal partnership is liable for many obligations while the
conjugal partnership exists. Not only that. The conjugal property is even subject
to the payment of debts contracted by either spouse before the marriage, as
those for the payment of fines and indemnities imposed upon them after the
responsibilities in Article 161 have been covered (Article 163, par. 3), if it turns
out that the spouse who is bound thereby, should have no exclusive property or if
it should be insufficient. These are considerations that go beyond the mere
equitable share of the wife in the property. These are reasons enough for the
husband to be stopped from disposing of the conjugal property without the
consent of the wife. Even more fundamental is the fact that the nullity is decreed
by the Code not on the basis of prejudice but lack of consent of an indispensable
party to the contract under Article 166.[37]
With respect to the third issue, the Court finds that respondent spouses are
not purchasers in good faith. A purchaser in good faith is one who buys property
of another, without notice that some other person has a right to, or interest in,
such property and pays full and fair price for the same, at the time of such
purchase, or before he has notice of the claim or interest of some other persons
in the property. He buys the property with the belief that the person from whom
he receives the thing was the owner and could convey title to the property. A
purchaser cannot close his eyes to facts which should put a reasonable man on
his guard and still claim he acted in good faith.[38]
In the instant case, there existed circumstances that should have placed
respondent spouses on guard. The death certificate of Ignacia, shows that she
died on March 22, 1982. The same death certificate, however, reveals that (1) it
was issued by the Office of the Civil Registrar of Lubao Pampanga on March 10,
1982; (2) the alleged death of Ignacia was reported to the Office of the Civil
Registrar on March 4, 1982; and (3) her burial or cremation would be on March
8, 1982.[39] These obvious flaws in the death certificate should have prompted
respondents to investigate further, especially so that respondent Florentina
Mijares admitted on cross examination that she asked for the death certificate of
Ignacia because she was suspicious that Ignacia was still alive. [40] Moreover,
respondent spouses had all the opportunity to verify the claim of Vicente that he
is a widower because it was their lawyer, Atty. Rodriguito S. Saet, who

represented Vicente in the special proceedings before the Metropolitan Trial


Court.
Neither can respondent spouses rely on the alleged court approval of the
sale. Note that the Order issued by the Metropolitan Trial Court of Quezon City,
Branch XXXI, appointing Vicente as guardian of his 5 minor children, as well as
the Order authorizing him to sell the estate of Ignacia were issued only on
September 29, 1983 and October 14, 1983, respectively. On the other hand, the
sale of the entire Lot No. 4349-B-2 to respondent spouses appears to have been
made not on March 1, 1983, but even as early as November 25, 1978. In the
Agreement dated November 25, 1978, Vicente in consideration of the amount of
P110,000.00, sold to Cipriano Mijares Lot No. 4349-B-2 on installment basis, with
the first installment due on or before July 31, 1979. [41] This was followed by a
Memorandum of Understanding executed on July 30, 1979, by Vicente and
Cipriano (1) acknowledging Ciprianos receipt of Vicentes down payment in the
amount of P50,000.00; and (2) authorizing Florentina Mijares to collect rentals.
[42]
On July 14, 1981, Vicente and Cipriano executed another Memorandum of
Agreement, stating, among other, that out of the purchase price of P110,000.00
Vicente had remaining balance of P19,000.00.[43] Clearly therefore, the special
proceedings before the Metropolitan Trial Court of Quezon City, Branch XXXI,
could not have been the basis of respondent spouses claim of good faith because
the sale of Lot No. 4349-B-2 occurred prior thereto.
Respondent spouses cannot deny knowledge that at the time of the sale in
1978, Vicente was married to Ignacia and that the latter did not give her
conformity to the sale. This is so because the 1978 Agreement described Vicente
as married but the conformity of his wife to the sale did not appear in the
deed. Obviously, the execution of another deed of sale in 1983 over the same Lot
No. 4349-B-2, after the alleged death of Ignacia on March 22, 1982, as well as
the institution of the special proceedings were, intended to correct the absence of
Ignacias consent to the sale. Even assuming that respondent spouses believed in
good faith that Ignacia really died on March 22, 1982, after they purchased the
lot, the fact remains that the sale of Lot No. 4349-B-2 prior to Ignacias alleged
demise was without her consent and therefore subject to annulment. The October
14, 1983 order authorizing the sale of the estate of Ignacia, could not have
validated the sale of Lot No. 4349-B-2 because said order was issued on the
assumption that Ignacia was already dead and that the sale dated March 1, 1983
was never categorically approved in the said order.

The fact that the 5 minor children [44] of Vicente represented by the latter,
signed the March 1, 1983 deed of sale of Lot No. 4349-B-2 will not estop them
from assailing the validity thereof. Not only were they too young at that time to
understand the repercussions of the sale, they likewise had no right to sell the
property of their mother who, when they signed the deed, was very much alive.
If a voidable contract is annulled, the restoration of what has been given is
proper. The relationship between parties in any contract even if subsequently
annulled must always be characterized and punctuated by good faith and fair
dealing. Hence, for the sake of justice and equity, and in consonance with the
salutary principle of non-enrichment at anothers expense, the Court sustains the
trial courts order directing Vicente to refund to respondent spouses the amount
of P110,000.00 which they have paid as purchase price of Lot No. 4349-B-2.
[45]
The court a quo correctly found that the subject of the sale was the entire Lot
No. 4349-B-2 and that the consideration thereof is not P40,000.00 as stated in
the March 1, 1983 deed of sale, but P110,000.00 as evidenced by the (1)
Agreement dated November 25, 1978 as well as the July 30, 1979 Memorandum
of Understanding and the July 14, 1981 Memorandum of Agreement which served
as receipts of the installment payments made by respondent Cipriano Mijares;
and (2) the receipt duly signed by Vicente Reyes acknowledging receipt of the
amount of P110,000.00 from respondent spouses as payment of the sale of the
controverted lot.[46]
The trial court, however, erred in imposing 12% interest per annum on the
amount due the respondents. In Eastern Shipping Lines, Inc. v. Court of Appeals,
[47]
it was held that interest on obligations not constituting a loan or forbearance
of money is six percent (6%) annually. If the purchase price could be established
with certainty at the time of the filing of the complaint, the six percent (6%)
interest should be computed from the date the complaint was filed until finality of
the decision. In Lui v. Loy,[48] involving a suit for reconveyance and annulment of
title filed by the first buyer against the seller and the second buyer, the Court,
ruling in favor of the first buyer and annulling the second sale, ordered the seller
to refund to the second buyer (who was not a purchaser in good faith) the
purchase price of the lots. It was held therein that the 6% interest should be
computed from the date of the filing of the complaint by the first buyer. After the
judgment becomes final and executory until the obligation is satisfied, the
amount due shall earn interest at 12% per year, the interim period being deemed
equivalent to a forbearance of credit.[49]

Accordingly, the amount of P110,000.00 due the respondent spouses which


could be determined with certainty at the time of the filing of the complaint shall
earn 6% interest per annum from June 4, 1986 until the finality of this
decision. If the adjudged principal and the interest (or any part thereof) remain
unpaid thereafter, the interest rate shall be twelve percent (12%) per annum
computed from the time the judgment becomes final and executory until it is fully
satisfied.
Petitioners prayer for payment of rentals should be denied. Other than the
allegation of Ignacia in her Sinumpaang Salaysay that the apartments could be
rented at P1,000.00 a month, no other evidence was presented to substantiate
her claim. In awarding rentals which are in the nature of actual damages, the
Court cannot rely on mere assertions, speculations, conjectures or guesswork but
must depend on competent proof and on the best evidence obtainable regarding
the actual amount of loss.[50] None, having been presented in the case at bar,
petitioners claim for rentals must be denied.
While as a general rule, a party who has not appealed is not entitled to
affirmative relief other than the ones granted in the decision of the court below,
law and jurisprudence authorize a tribunal to consider errors, although
unassigned, if they involve (1) errors affecting the lower courts jurisdiction over
the subject matter, (2) plain errors not specified, and (3) clerical errors. [51] In this
case, though defendant Vicente Reyes did not appeal, the plain error committed
by the court a quo as to the award of moral and exemplary damages must be
corrected. These awards cannot be lumped together as was done by the trial
court.[52]Moral and exemplary damages are different in nature, and require
separate determination. Moral damages are awarded where the claimant
experienced physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and
similar injury as a result of the act complained of. [53] The award of exemplary
damages, on the other hand, is warranted when moral, temperate, liquidated, or
compensatory damages were likewise awarded by the court.[54]

Hence, the trial courts award of P50,000.00 by way of moral and exemplary
damages should be modified. Vicente Reyes should be ordered to pay the
amounts of P25,000.00 as moral damages and P25,000.00 as exemplary
damages. Since Vicente Reyes was among the heirs substituted to the late
Ignacia Aguilar-Reyes, payment of moral and exemplary damages must be made
by Vicente to his children, petitioners in this case.
WHEREFORE, in view of all the foregoing, the petition is PARTIALLY
GRANTED. The January 26, 2000 Decision and June 19, 2002, Resolution of the
Court of Appeals in CA-G.R. No. 28464 are REVERSED and SET ASIDE. The May
31, 1990 Order of the Regional Trial Court of Quezon City, Branch 101, in Civil
Case No. Q-48018, which annulled the March 1, 1983 Deed of Absolute Sale over
Lot No. 4349-B-2, and ordered the Register of Deeds of Quezon City to cancel
TCT No. 306087 in the name of respondent spouses Cipriano Mijares and
Florentina Mijares covering the same property; as well as the June 29, 1990
Order correcting the typographical errors in the order dated March 1, 1983, are
REINSTATED, with the 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.