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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 CAG.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:
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 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 HAD NO KNOWLEDGE OF THE
ABOVECITED CASE.
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
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 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.

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

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.

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

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

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

as correctly held by the lower court. his wife Melecia. 2001 the conviction of both accused but modified the penalty to reclusion perpetua. HEIRS OF JOSE JUANITE.4 SO ORDERED. not paraphernal assets of Melecia. The RTC ordered those found guilty to pay each of the heirs of the victims.9 On September 16.00 actual damages.000.000. Regional Trial Court (RTC) of Surigao City in Criminal Cases 4232 and 4233. On April 3. THIRD DIVISION December 10. No. 21 Thus they leased the properties from their mother Donata Montemayor for many years knowing her to be the owner. it affirmed on May 24. 2003. a notice of levy7 and a notice of sale on execution8 were issued. 164201 ABAD.00 each as moral damages. vs. 24 WHEREFORE. the Court awarded P50. 2012 EFREN PANA. 2002 the RTC ordered the issuance of the writ. P50. Upon motion for execution by the heirs of the deceased. Certainly.10 The spouses moved for reconsideration but the RTC denied the same on March 6. claiming that the levied properties were conjugal assets. they are guilty of laches. and P150. the Court made an award of P15. 22 It is only after 17 years that they remembered to assert their rights.000. Petitioner. G.11 . 1997 the RTC rendered a consolidated decision2 acquitting Efren of the charge for insufficiency of evidence but finding Melecia and another person guilty as charged and sentenced them to the penalty of death.00 each by way of temperate damages. In addition. 23 Moreover. but they did not do anything. the Court also affirmed the award of civil indemnity and moral damages but deleted the award for actual damages for lack of evidentiary basis. 2002 the RTC denied the motion.000. however.5 resulting in the levy of real properties registered in the names of Efren and Melecia. petitioner Efren and his wife Melecia filed a motion to quash the writ of execution.the properties in question are paraphernal properties belonging exclusively to Donata Montemayor and are not conjugal in nature. jointly and severally. Respondents. 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. SUPREME COURT Manila The Facts and the Case The prosecution accused petitioner Efren Pana (Efren).: SR. JR.00 as civil indemnity. 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 P20.00 exemplary damages per victim to be paid solidarily by them.. on March 12. On appeal to this Court. With respect to the monetary awards.R. DECISION This case is about the propriety of levy and execution on conjugal properties where one of the spouses has been found guilty of a crime and ordered to pay civil indemnities to the victims' heirs. 2002. 2001.000.00 and the costs of the suit.000. J.1 On July 9.3 The decision became final and executory on October 1. and others of murder before the. 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. and JOSE JUANITE. In its place.6 Subsequently. P50.

Hence. While it is true that the personal stakes of each spouse in their conjugal assets are inchoate or unclear prior to the liquidation of the conjugal partnership of gains and. given that they were married prior to the enactment of the Family Code and that they did not execute any prenuptial agreement. of the Family Code because their property regime is precisely governed by the law on absolute community. which governed the marriage. As it happens. But that fact does not prevent the application of [A]rt. The Issue Presented The sole issue presented in this case is whether or not the CA erred in holding that the conjugal properties of spouses Efren and Melecia can be levied and executed upon for the satisfaction of Melecia’s civil liability in the murder case. therefore. Efren and Melecia had no prenuptial agreement. The reasoning goes: Admittedly. since the transitory provision of the Family Code gave its provisions retroactive effect if no vested or acquired rights are impaired. last paragraph. The latter code now prescribes in Article 75 absolute community of property for all marriages unless the parties entered into a prenuptial agreement. it is evident that Article 256 of the Family Code does not intend to reach back and automatically convert into absolute community of property relation all conjugal partnerships of gains that existed before 1988 excepting only those with prenuptial agreements. the conjugal partnership of gains that governed the marriage between Efren and Melecia who were married prior to 1988 cannot be modified except before the celebration of that marriage.12 It also denied Efren’s motion for reconsideration. Efren filed a petition for certiorari before the Court of Appeals (CA).13 prompting him to file the present petition for review on certiorari. Efren claims that his marriage with Melecia falls under the regime of conjugal partnership of gains." None of the spouses is dead. Ruling of the Court To determine whether the obligation of the wife arising from her criminal liability is chargeable against the properties of the marriage. the Court has first to identify the spouses’ property relations. it must be made before the celebration of the marriage.18 (b) the spouses who were legally separated reconciled and agreed to revive their former property regime. 76. no vested rights have been acquired by each over the properties of the community. On January 29. This finds support in Art.14 Although the heirs of the deceased victims do not dispute that it was the Civil Code.17 Both the RTC and the CA are in error on this point. that property relation between the couple was changed when the Family Code took effect in 1988.Claiming that the RTC gravely abused its discretion in issuing the challenged orders. 128. Clearly.16 Efren and Melecia’s property relation was admittedly conjugal under the Civil Code but. The CA agreed with this position. In order that any modification in the marriage settlements may be valid. the liabilities imposed on the accused-spouse may properly be charged against the community as heretofore discussed. they insist that it was the system of absolute community of property that applied to Efren and Melecia. 94. not the Family Code. Art.15 The RTC applied the same reasoning as above. none of them can be said to have acquired vested rights in specific assets. 256 of the Family Code which states: "This code shall have retroactive effect in so far as it does not prejudice or impair vested or acquired rights in accordance with the Civil Code or other laws. 67. subject to the provisions of Articles 66. the spouses were married before the effectivity of the Family Code.19 (c) judicial separation of property had been had on the ground that a spouse abandons the other without just cause or fails to comply with his obligations to . therefore. 135 and 136. Therefore. The Family Code itself provides in Article 76 that marriage settlements cannot be modified except prior to marriage. Post-marriage modification of such settlements can take place only where: (a) the absolute community or conjugal partnership was dissolved and liquidated upon a decree of legal separation. 2004 the CA dismissed the petition for failure to sufficiently show that the RTC gravely abused its discretion in issuing its assailed orders.

the net gains or benefits obtained indiscriminately by either spouse during the marriage."23 Consequently. is that they were married under the regime of the conjugal partnership of gains. without prejudice to vested rights already acquired in accordance with the Civil Code or other laws. upon the dissolution of the marriage or of the partnership. as provided in Article 256. but at the time of the liquidation of the partnership. such spouse shall be charged for what has been paid for the purpose above-mentioned. the payment of personal debts contracted by either spouse before the marriage.the family. However. or upon any other regime. may be enforced against the partnership assets after the responsibilities enumerated in the preceding Article have been covered. shall govern the property relations between husband and wife. What is clear is that Efren and Melecia were married when the Civil Code was still the operative law on marriages. The presumption. the husband and the wife place only the fruits of their separate property and incomes from their work or industry in the common fund. The future spouses may in the marriage settlements agree upon absolute or relative community of property. to automatically change the marriage settlements of couples who got married under the Civil Code into absolute community of property in 1988 when the Family Code took effect would be to impair their acquired or vested rights to such separate properties. The civil indemnity that the decision in the murder case imposed on her may be enforced against their conjugal assets after the . 119. and divide equally. Consequently. 122. Since Efren does not dispute the RTC’s finding that Melecia has no exclusive property of her own. the Family Code contains terms governing conjugal partnership of gains that supersede the terms of the conjugal partnership of gains under the Civil Code. Its Article 122 provides: Art. the Court must refer to the Family Code provisions in deciding whether or not the conjugal properties of Efren and Melecia may be held to answer for the civil liabilities imposed on Melecia in the murder case. This means that they continue under such property regime to enjoy rights of ownership over their separate properties.24 the above applies. What is more. (e) the spouses jointly filed a petition for the voluntary dissolution of their absolute community or conjugal partnership of gains.22 No evidence of a prenuptial agreement between them has been presented. Thus: Art. or when the same are void.21 None of these circumstances exists in the case of Efren and Melecia. Neither shall the fines and pecuniary indemnities imposed upon them be charged to the partnership. By means of the conjugal partnership of gains the husband and wife place in a common fund the fruits of their separate property and the income from their work or industry. if the spouse who is bound should have no exclusive property or if it should be insufficient. absent any evidence to the contrary. The RTC cannot take advantage of the spouses’ loose admission that absolute community of property governed their property relation since the record shows that they had been insistent that their property regime is one of conjugal partnership of gains. that of fines and indemnities imposed upon them. Of course. 142. Article 105 of the Family Code states: "x x x x The provisions of this Chapter [on the Conjugal Partnership of Gains] shall also apply to conjugal partnerships of gains already established between spouses before the effectivity of this Code. In the absence of marriage settlements. under the conjugal partnership of gains established by Article 142 of the Civil Code.20 (d) there was judicial separation of property under Article 135. the system of relative community or conjugal partnership of gains as established in this Code. as well as the support of illegitimate children of either spouse. Article 119 of the Civil Code thus provides: Art. or upon complete separation of property. The payment of personal debts contracted by the husband or the wife before or during the marriage shall not be charged to the conjugal properties partnership except insofar as they redounded to the benefit of the family.

1959 ESTANISLAO SERRANO. charges. Faustino B. it states that such indemnities "may be enforced against the partnership assets after the responsibilities enumerated in the preceding article have been covered. J. including major or minor repairs upon the conjugal partnership property. declaring null and void the supposed donation propter nuptias on which his complaint was based and dismissing the later upon motion of the . Ujano for appellee. Contrary to Efren’s contention. and (9) Expenses of litigation between the spouses unless the suit is found to be groundless.: If the conjugal partnership is insufficient to cover the foregoing liabilities. liens. 2004 and May 14. defendant-appellee. Judge Jose G. or other activity for self-improvement.1âwphi1 Estanislao Serrano is appealing the decision of the Court of First Instance of Ilocos Sur. MELCHOR SOLOMON. the responsibilities enumerated in Article 121 of the Family Code have been covered. (7) Antenuptial debts of either spouse insofar as they have redounded to the benefit of the family. Branch 30. 121. Article 121 above allows payment of the criminal indemnities imposed on his wife. SP 77198 dated January 29. L-12093 June 29. (4) All taxes. Tobia. such [offending] spouse shall be charged for what has been paid for the purposes above-mentioned. Constante Pimentel for appellant. Republic of the Philippines SUPREME COURT Manila EN BANC G. Pedro R. Melecia. No. in enforcing the writ of execution on the conjugal properties of spouses Efren and Melecia Pana for the satisfaction of the indemnities imposed by final judgment on the latter accused in Criminal Cases 4232 and 4233. the support of illegitimate children shall be governed by the provisions of this Code on Support. Eufrecino T. This is not altogether unfair since Article 122 states that "at the time of liquidation of the partnership. (5) All taxes and expenses for mere preservation made during the marriage upon the separate property of either spouse. Arce and Emmanuel U.R. and expenses. The conjugal partnership shall be liable for: (1) The support of the spouse.responsibilities enumerated in Article 121 of the Family Code have been covered."[26] No prior liquidation of those assets is required. the spouses shall be solidarily liable for the unpaid balance with their separate properties. their common children. The Regional Trial Court of Surigao City. (8) The value of what is donated or promised by both spouses in favor of their common legitimate children for the exclusive purpose of commencing or completing a professional or vocational course or other activity for self-improvement. SO ORDERED. plaintiff-appellant.R. or by both spouses or by one of them with the consent of the other. shall first ascertain that. (3) Debts and obligations contracted by either spouse without the consent of the other to the extent that the family may have benefited. 2004. Tagayana. Bautista presiding. vocational. however.25 Those responsibilities are as follows: Art." WHEREFORE. vs. MONTEMAYOR. (2) All debts and obligations contracted during the marriage by the designated administrator-spouse for the benefit of the conjugal partnership of gains. (6) Expenses to enable either spouse to commence or complete a professional. out of the partnership assets even before these are liquidated. and the legitimate children of either spouse. Indeed. the Court AFFIRMS with MODIFICATION the Resolutions of the Court of Appeals in CA-G.

. province of Ilocos Sur and residing at present in Sinait. strictly. to wit . the marriage in itself was not the only consideration or condition under which terms of the donation would be carried out. defendant Melchor Solomon married Alejandria. brothers. single. one half of all my properties and those acquired by us will be given to those who have reared my wife in token of my love to her. These which I am donating my exclusive properties because I have honestly acquired the same with the sweat of my brows and I donate them gladly. On June 21. After a careful study of the case. . that the donation was not made to one or both of the (marriage) contracting parties. it was not made in consideration of the marriage and. The motion for dismissal was filed before the hearing but the trial court deferred action upon it until after submission of evidence by the parties. namely Miss Alejandria Feliciano single. had been left to her father's friend named Estanislao Serrano who took care of and raised her from the age 12 until she reached womanhood. Donations by reasons of marriage are those bestowed before its celebration in consideration of the same. Ilocos Sur. we fully agree with the trial court.defendant. Whether we apply Article 1327 for the reason that the document Exhibit "A" was executed in 1948 before the promulgation of the New Civil Code in 1950 or whether we apply Article 126 of the New Civil Code the result would be the same. what is more important. the donation may not be regarded as one made in consideration of the marriage. Article 1327 of the Old Civil Code reads: Art. native of the municipality of Sinait.. or sisters and relatives. having decided to get married with the consent of my parents. I the very one concerned. upon one or both of the spouses. is reproduced below: That. . the translation of which. This article was reproduced in the Civil Code under Article 126. for purposes of reference. whose father went to Hawaii to seek his fortune and who until now resides there. the supposed deed of donation propter nuptias. is to be realized and complied with under agreement or stipulation which affirms. The marriage would have to be childless and one of the spouses would have to die before the other before the donation would operate. This agreement donating all my exclusive properties in order that we shall have a basic capital for our conjugal life and in order that there will be ready maintenance and support of offsprings has come out voluntarily and expontaneously from me. have announced and manifested my determination and desire to Mr. Alejandria died without issue. So. of legal age. . Was the donation made in considerations of the marriage between Melchor and Alejandria or was it made consideration of the death of either of them in the absence of any children? True. . But. This ardent desire favored by good luck and accepted by the noble lady the one concerned. Several months thereafter Estanislao Serrano commenced the present action to enforce and implement the terms of the alleged donation particularly that portion thereof to the effect that if Alejandria died before her husband Melchor and left no children. born in Hawaii but is actually residing in Cabugao. speaking. the Deed of Donation was executed on the occasion when they married. the husband will die before my wife and if my beloved wife will die before me. 1327. or rather on March 2. then one half of Melchor's properties and those acquired by him and his wife would be given to those persons who had raised and taken care of her namely. Said parties entered into a stipulation of facts after which they declined to submit any other evidence except Exhibit "A". . The referred to properties are donated in accordance with the existing laws of the Philippines and our children out of the wedlock will be the ones to inherit same inherit same with equal shares. promotes and vivifies the union. 1949. Less than nine months after marriage. Filipino. But if God will not bless our union with any child one half of all my properties including the properties acquired our conjugal union will be given the (to) my brothers or sisters or their heirs if I. 1948. I Melchor Solomon. (Emphasis supplied) Alejandria Feliciano. On the same day of the marriage but before the marriage ceremony he executed the alleged Deed of Donation. Exhibit "A" above reproduced. Estanislao Serrano. Acting upon the motion for dismissal the trial court found that the donation could not be regarded as a donation propter nuptias for the reason that though it was executed before the marriage. Estanislao Serrano to whose family the flower I intend to win belongs. but to a third person.

can it be considered valid and effective? Hardly. with costs. in the present case. but rather in favor of those who acted as her parents and raised her from girlhood to womanhood in the absence of her father.1 and Exhibit "A" does not fulfill said requirements. the donor is still alive and naturally. still. the time and occasion have not arrived for considering its operation and implementation. respectively. (2) executed in favor of the future spouses but not in consideration of the marriage. even if the donation were otherwise valid. may the donation be regarded a donation mortis causa. That does not place it within the provisions of Article 1327 and Article 126 of the Old Civil Code and the New Civil Code. In view of the foregoing. Again. and (3) granted to persons other than the spouses even though they may be founded on the marriage (6 M. is equivalent to a disposition or bequest of property by last will. because it was never accepted by the donee either in the same instrument or donation or in a separate document as required by law. still. we have the fact that the donation was being made not in favor of Alejandria. the wife. an it should be executed in accordance with the requisites and strict provisions governing the execution wills. Moreover. 232). the appealed decision is hereby affirmed. Republic of the Philippines SUPREME COURT Manila THIRD DIVISION . and given effect? The answer has to be in the negative for the reason that this Tribunal has heretofore consistently held that a donation to take effect after the death of the donor. Having come to the conclusion that the Deed of Donation does not fulfill the requirements of a donation propter nuptias and that it might be considered a donation inter vivos. Manresa. in his commentary on Article 1327 of the Civil Code says the following: Donations excluded are those (1) made in favor of the spouses after the celebration of marriage.But assuming for the moment that it was made in consideration of the marriage.

his conformity to the agreement entered into by his wife. Benjamin claimed that his funds were used in the acquisition and improvement of the Boracay property. The Agreement of Lease dated July 20. lease. and Joselyn ran away with Kim Philippsen. Series of 1992 is hereby declared NULL and VOID. Benjamin signed as a witness to the contract. Taylor and Philip Matthews before Notary Public Lenito T.: Claiming that the Agreement was null and void since it was entered into by Joselyn without his (Benjamin’s) consent. with an annual rental of P12. 4632 for Declaration of Nullity of Agreement of Lease with Damages. Benjamin and Joselyn had a falling out. 2009 NACHURA. No. a British subject. 59573. premises considered. he found it unnecessary to obtain the consent of Benjamin. trial on the merits ensued. Martin a 1. 1992. "T-6" and "T7") entered into by and between Joselyn C. Petitioner thereafter took possession of the property and renamed the resort as Music Garden Resort. 1989. a 17-year old Filipina. estopped from questioning the validity of the Agreement. The agreement was signed by the parties and executed before a Notary Public. therefore. "T-1".00) PESOS as damages representing unrealized income for the residential . the RTC disposed of the case in this manner: However. Joselyn executed a Special Power of Attorney (SPA) in favor of Benjamin. Joselyn as lessor and petitioner Philip Matthews as lessee. Assailed in this petition for review on certiorari are the Court of Appeals (CA) December 19.R. PHILIP MATTHEWS. Taylor (Joselyn).G. and sub-lease and otherwise enter into contract with third parties with respect to their Boracay property. for and in consideration of P129.000.000. 34054. hence. TAYLOR. authorizing the latter to maintain.R.000. Taylor (Benjamin). CV No. 2003 Decision1 and July 14. 1992. the RTC rendered judgment by default declaring the Agreement null and void. "T-3". Page 79. On June 8. 1997 Decision3 of the Regional Trial Court (RTC).13 The CA also ordered the RTC to allow the petitioner to file his Answer. Aklan in Civil Case No. Defendants are hereby ordered. 2004 Resolution2 in CA-G.14 petitioner claimed good faith in transacting with Joselyn. J. judgment is hereby rendered in favor of the plaintiff and against the defendants as follows: 1. Kalibo. Joselyn bought from Diosa M.R. Boracay Island.294 square-meter lot (Boracay property) situated at Manoc-Manoc. sell. Book I. "T-2".6 Joselyn and Benjamin.5 The sale was allegedly financed by Benjamin. Respondents. constructed improvements thereon and eventually converted the property to a vacation and tourist resort known as the Admiral Ben Bow Inn. SP No. also using the latter’s funds. "T-4". any transaction involving said property required his consent. as appearing in the Agreement. to pay plaintiff the sum of SIXTEEN THOUSAND (P16. 1997.1avvphi1 WHEREFORE. 390.9 On July 20. Benjamin instituted an action for Declaration of Nullity of Agreement of Lease with Damages11 against Joselyn and the petitioner. On June 30.8 In his Answer. No. Malay. DECISION There being no amicable settlement during the pre-trial.00. Serrano under Doc. vs. married Joselyn C. BENJAMIN A. 1992 consisting of eight (8) pages (Exhibits "T". 1988.7 All required permits and licenses for the operation of the resort were obtained in the name of Ginna Celestino. The assailed decision affirmed and upheld the June 30. indicating his knowledge of the transaction and. Aklan. On March 14. and to conduct further proceedings. Petitioner. Benjamin was. "T-5". and coupled with the fact that he was Joselyn’s husband. respondent Benjamin A. Moreover.12 The decision was. 164584 June 22. set aside by the CA in CA-G. On June 30. however. while their marriage was subsisting. 1994. impliedly. 2. jointly and severally. Joselyn’s sister.00. Since Joselyn appeared to be the owner of the Boracay property.4 On June 9. No Answer was filed. TAYLOR and JOSELYN C. the RTC declared Joselyn and the petitioner in defeault. entered into an Agreement of Lease10 (Agreement) involving the Boracay property for a period of 25 years. Branch 8.

R. When Joselyn leased the property to petitioner. JUNE 8. it was therefore unnecessary for Joselyn to participate in the execution of the Agreement. to pay plaintiff the sum of TWENTY THOUSAND (P20. The appellate court was of the view that if. 3. thus. 141323.4. these circumstances yielded the inevitable conclusion that the contract was null and void having been entered into by Joselyn without the consent of Benjamin. IN THE LIGHT OF CHEESMAN VS. we are called upon to determine the validity of an Agreement of Lease of a parcel of land entered into by a Filipino wife without the consent of her British husband. BENJAMIN TAYLOR IS DEEMED TO HAVE GIVEN HIS CONSENT WHEN HE AFFIXED HIS SIGNATURE IN THE AGREEMENT OF LEASE AS WITNESS IN THE LIGHT OF THE RULING OF THE SUPREME COURT IN 4.15 4." The CA noted that Joselyn already prepared an SPA in favor of Benjamin involving the Boracay property. Defendants are hereby ordered. and THE CASE OF SPOUSES PELAYO VS. IAC.00) PESOS. but more importantly. Benjamin was a willing participant in the questioned transaction. 74833.R. petitioner still failed to obtain a favorable decision. THE COURTS A QUO ERRONEOUSLY APPLIED ARTICLE 96 OF THE FAMILY CODE OF THE PHILIPPINES WHICH IS A PROVISION REFERRING TO THE ABSOLUTE COMMUNITY OF PROPERTY.3.2. In addressing the matter before us. In its December 19. Benjamin sought the nullification of the contract on two grounds: first.5. THE PROPERTY REGIME GOVERNING THE PROPERTY RELATIONS OF BENJAMIN TAYLOR AND JOSELYN TAYLOR IS THE CONJUGAL PARTNERSHIP OF GAINS BECAUSE THEY WERE MARRIED ON 30 JUNE 1988 WHICH IS PRIOR TO THE EFFECTIVITY OF THE FAMILY CODE. that . SO ORDERED. the consent of the spouses was necessary to validate any contract involving the property. G. NO. Philippine Currency. G. indeed. THE PARCEL OF LAND SUBJECT OF THE AGREEMENT OF LEASE IS THE EXCLUSIVE PROPERTY OF JOCELYN C. 4.000. THE MARITAL CONSENT OF RESPONDENT BENJAMIN TAYLOR IS NOT REQUIRED IN THE AGREEMENT OF LEASE DATED 20 JULY 1992.1. with a constitutional question. and second. 2003 Decision. Said acquisition was evidenced by a Deed of Sale with Joselyn as the vendee. The property was also declared for taxation purposes under her name. Taken together. 4. the trial court refused to consider the alleged participation of Benjamin in the questioned transaction primarily because his signature appeared only on the last page of the document and not on every page thereof. Benjamin’s right over the Boracay property was bolstered by the court’s findings that the property was purchased and improved through funds provided by Benjamin. 1991. It is undisputed that Joselyn acquired the Boracay property in 1989. The RTC considered the Boracay property as community property of Benjamin and Joselyn. Although the Agreement was evidenced by a public document. ARTICLE 96 OF THE FAMILY CODE OF THE PHILIPPINES FINDS NO APPLICATION IN THIS CASE. THE HONORABLE COURT OF APPEALS FAILED TO PASS UPON THE COUNTERCLAIM OF PETITIONER DESPITE THE FACT THAT IT WAS NOT CONTESTED AND DESPITE THE PRESENTATION OF EVIDENCE ESTABLISHING SAID CLAIM. 2005. A FILIPINO CITIZEN. we are confronted not only with civil law or conflicts of law issues. that he was the actual owner of the property since he provided the funds used in purchasing the same. In fine. jointly and severally. THE HONORABLE COURT OF APPEALS IGNORED THE PRESUMPTION OF REGULARITY IN THE EXECUTION OF NOTARIAL DOCUMENTS. On appeal to the CA. TAYLOR. Aggrieved.16 the CA affirmed the conclusions made by the RTC. JANUARY 21. NO. GRANTING ARGUENDO THAT HIS CONSENT IS REQUIRED. MELKI PEREZ.17 The petition is impressed with merit. petitioner now comes before this Court in this petition for review on certiorari based on the following grounds: 4. the parties to the Agreement should have used the phrase "with my consent" instead of "signed in the presence of.building and cottages computed monthly from July 1992 up to the time the property in question is restored to plaintiff. for attorney’s fees and other incidental expenses.

Upon his death. hatcheries.24 The rule is clear and inflexible: aliens are absolutely not allowed to acquire public or private lands in the Philippines. we have settled issues that directly or indirectly involve the above constitutional provision. as more and more aliens attempt to circumvent the provision by trying to own lands through another.20 Our fundamental law cannot be any clearer. v. Save in cases of hereditary succession. It would certainly be futile to prohibit the alienation of public agricultural lands to aliens if. by virtue of the aforecited constitutional provision. . industrial plants.28 and that a contract of sale be nullified for their lack of consent. In a long line of cases. airfields. strictly agricultural. corporations. playgrounds. Article XII of the 1987 Constitution states:18 Section 7. schools. The right to acquire lands of the public domain is reserved only to Filipino citizens or corporations at least sixty percent of the capital of which is owned by Filipinos. Muller. have been disqualified from acquiring lands of the public domain. x x x xxxx If the term "private agricultural lands" is to be construed as not including residential lots or lands not strictly agricultural. no private agricultural land will be transferred or assigned except to individuals. and a host of other uses and purposes that are not.23 we had the occasion to explain the constitutional prohibition: Under Section 1 of Article XIII of the Constitution. however. fisheries.26 that they be reimbursed the funds used in purchasing a property titled in the name of another.21 In Krivenko v. with the exception of public agricultural land. after all. are the more decisive. a Chinese citizen. Register of Deeds. they are also disqualified from acquiring private lands.22 cited in Muller v. "natural resources. Teng Gui.Joselyn could not enter into a valid contract involving the subject property without his consent.19 The primary purpose of this constitutional provision is the conservation of the national patrimony. his heirs (the petitioners therein) claimed the properties as part of the estate of their deceased father. failed to observe the applicable constitutional principles. acquired a parcel of land. Section 7. We had cases where aliens wanted that a particular property be declared as part of their father’s estate. however." and with respect to public agricultural lands. Hence. precisely because he never became the owner thereof in light of the above-mentioned constitutional prohibition." and that "they may validly buy and hold in their names lands of any area for building homes. It is partly to prevent this result that Section 5 is included in Article XIII. corporations. which. The trial and appellate courts both focused on the property relations of petitioner and respondent in light of the Civil Code and Family Code provisions. save only in constitutionally recognized exceptions.27 that an implied trust be declared in their (aliens’) favor. and sought the partition of said properties among themselves. golf courses. 6) That this is obnoxious to the conservative spirit of the Constitution is beyond question. the result would be that "aliens may freely acquire and possess not only residential lots and houses for themselves but entire subdivisions. in fact.25 There is no rule more settled than this constitutional prohibition. factories.1avvphi1 Aliens. or associations qualified to acquire or hold lands of the public domain. together with the improvements thereon." (Solicitor General’s Brief. markets. excluded the land and improvements thereon from the estate of Felix Ting Ho. shall not be alienated. their alienation is limited to Filipino citizens.29 In Ting Ho. and it reads as follows: "Section 5. They. health and vacation resorts. But this constitutional purpose conserving agricultural resources in the hands of Filipino citizens may easily be defeated by the Filipino citizens themselves who may alienate their agricultural lands in favor of aliens." This constitutional provision closes the only remaining avenue through which agricultural resources may leak into alien’s hands. p. Save in cases of hereditary succession. whether individuals or corporations. they may be freely so alienated upon their becoming private agricultural lands in the hands of Filipino citizens. and whole towns and cities. in appellant’s words.30 Felix Ting Ho. no private lands shall be transferred or conveyed except to individuals. Jr. or associations qualified to acquire or hold lands of the public domain in the Philippines. We.

being an alien. vicariously and clandestinely. If the property were to be declared conjugal. are REVERSED and SET ASIDE and a new one is entered DISMISSING the complaint against petitioner Philip Matthews. SO ORDERED. we find it unnecessary to address the other issues raised by the petitioner. In any event. as he would then have a decisive vote as to its transfer or disposition. Neither did the Court declare that an implied trust was created by operation of law in view of petitioner’s marriage to respondent. she acquired sole ownership thereto. By entering into such contract knowing that it was illegal.33 petitioner (an American citizen) and Criselda Cheesman acquired a parcel of land that was later registered in the latter’s name. in Cheesman v. is absolutely prohibited from acquiring private and public lands in the Philippines. When their relationship turned sour. In light of the foregoing jurisprudence. One who loses his money or property by knowingly engaging in an illegal contract may not maintain an action for his losses. in fact. Thus.R. the Court held that respondent was aware that as an alien. declared that when the spouses acquired the Antipolo property.34 In fine. respondent prayed for reimbursement of the funds he paid for the acquisition of said property. This is a right that the Constitution does not permit him to have. The Antipolo property was registered in the name of the petitioner. and since he was disqualified from owning lands in the Philippines. prompting the respondent to file a petition for separation of property. respondent’s name appeared as the vendee in the deeds of sale. thus. The Court held that assuming that it was his (petitioner’s) intention that the lot in question be purchased by him and his wife. no reimbursement for his expenses can be allowed. petitioner filed an action for the recovery of the real properties registered in the name of respondent.31 petitioner Elena Buenaventura Muller and respondent Helmut Muller were married in Germany. With the foregoing disquisition. Catito. as in the other cases. Specifically. and in attempting to acquire a right or interest in land. Petitioner and respondent met and later cohabited in a common-law relationship. an Australian citizen. They eventually separated. premises considered. We said that to rule otherwise would permit circumvention of the constitutional prohibition. He had. we find and so hold that Benjamin has no right to nullify the Agreement of Lease between Joselyn and petitioner. we uphold its validity.32 petitioner. he knowingly violated the Constitution. Intermediate Appellate Court. the Court refused to declare petitioner as the owner mainly because of the constitutional prohibition. . During the subsistence of their marriage. WHEREFORE. The Court added that being a party to an illegal contract. no implied trust was created in his favor. CV No. Criselda subsequently sold the land to a third person without the knowledge of the petitioner. Finally. while respondent. The petitioner then sought the nullification of the sale as he did not give his consent thereto. In deciding the case in favor of the petitioner. a Filipina. this would accord the alien husband a substantial interest and right over the land.In Muller v. he had and has no capacity or personality to question the subsequent lease of the Boracay property by his wife on the theory that in so doing. 2004 Resolution of the Court of Appeals in CA-G. 59573. during which petitioner acquired real properties. Muller. and no declaration can be made that the subject property was part of the conjugal/community property of the spouses. he was prohibited from owning a parcel of land situated in the Philippines. To sustain such a theory would countenance indirect controversion of the constitutional prohibition. Hence. Again. This is true even if we sustain Benjamin’s claim that he provided the funds for such acquisition. claiming that he was the real owner. was married to Klaus Muller. Considering that Joselyn appeared to be the designated "vendee" in the Deed of Sale of said property. we denied his attempt at subsequently asserting a right to the said property in the form of a claim for reimbursement. the Agreement of Lease entered into between Joselyn and petitioner cannot be nullified on the grounds advanced by Benjamin. Benjamin. respondent purchased a parcel of land in Antipolo City and constructed a house thereon. the sale as to him was null and void. he had it titled in the name of the petitioner because of said prohibition. he was merely exercising the prerogative of a husband in respect of conjugal property. the December 19. he could not come to court and ask to have his illegal objective carried out. In Frenzel v. 2003 Decision and July 14. was married to Teresita Santos. he acquired no right whatever over the property by virtue of that purchase.

2003 Resolution[3] of the Court of Appeals (CA) in CA-GR CV No.-. Conjugal property cannot be held liable for the personal obligation contracted by one spouse.-.-.-.-.R.-. 160762 WHEREFORE. Chairperson.-. 1982 are declared NULL and VOID.-. categorical. No.-. CJ: P roperty purchased by spouses during the existence of their marriage is presumed to be conjugal in nature. This presumption stands. the Decision appealed from is hereby REVERSED and SET ASIDE.-.-. absent any clear. . unless some advantage or benefit is shown to have accrued to the conjugal partnership.x DECISION PANGANIBAN.-. Sr.-.-.-.[4] . 2002 Decision[2] and the September 17.Austria-Martinez.-.MENDOZA GO & HENRY GO.-.. Present: Panganiban.-.-. 1981 and the Final Sheriffs Certificate of Sale dated August 26.---. 2006 x -. challenging the November 22. May 3.-.versus . and Chico-Nazario. Respondent. The Sheriffs Certificate of Sale dated August 12.-.-. JJ Promulgated: LEONARDO YAMANE. Callejo.-. and convincing evidence that the property is paraphernal. The assailed Decision disposed as follows: FIRST DIVISION Spouses JOSEPHINE G. The Case Before the Court is a Petition for Review[1] under Rule 45 of the Rules of Court. 60939. Ynares-Santiago.-.-. Petitioners. premises considered. CJ.-.

and was not their conjugal property. that [respondent] has not pursued any lawful remedy to annul the execution proceeding. Guillermo F. hereinafter collectively referred to as the Pucay sisters. Citing the Order of the Regional Trial Court of Baguio City. 1984. On August 30. [respondent] herein. [petitioners] moved to dismiss the complaint on the ground of res judicata.[5] In its Decision[6] dated March 25. However. As a result of a motion for execution of a charging lien filed by Atty.000. misrepresentation. [respondent] filed a Third-Party Claim with the Office of the Provincial Sheriff to stop the public auction on the ground that the subject property is conjugal property and. Four days prior to the auction sale.000 as against a charging lien in the amount of P10. 1985. As a consequence. docketed as Civil Case No. registered in the name of Muriel Pucay Yamane. respondent filed a Motion. 1841. the motion was denied by the trial court. Baguio City. held that the subject parcel of land was the paraphernal property of the late Muriel Pucay Yamane -spouse of respondent -. the subject property was levied to satisfy the lien for attorneys fees in the amount of P10. Hence. 1998. finding that he had no legal standing to question the auction sale or to pray for its annulment or cancellation. 417R. Muriel likewise lodged a Complaint for Damages. 1998. Muriel was declared non-suited for failure to appear in the hearing despite due notice. which ordered the cancellation of TCT No. Branch 4. 1984. the trial court ordered the joint hearing of Civil Cases Nos.The CA denied reconsideration in its September 17. Sec. under Transfer Certificate of Title No. 1981. Rule 39 of the Revised Rules of Court. In its May 27. 1984. which said counsel handled for the plaintiffs therein. 1985 Order. [respondent] filed a Complaint with the Regional Trial Court of Baguio City. Cypress Corporation. against [petitioners] and Sheriff Melgar for annulment and cancellation of auction sale upon the same ground stated in the abovementioned third-party claim. therefore. fraud. The Facts The undisputed factual findings of the CA are as follows: Involved in the suit is a 750 square meters (sic) parcel of lot located at Res. In their Answer filed on December 10. the Sheriff proceeded with the auction sale despite [respondents] protest.[7] in which he prayed that he be allowed to file his . On September 4. Upon receipt of the RTC Decision on April 8. In the Order dated November 28. 12491 and directed the Register of Deeds to issue new title in the name of Josephine Go x x x. 1984. it is deemed final and any irregularity committed in the course thereof will not vitiate its validity. The subject property was sold to spouses Josephine [and] Henry Go (or [petitioners]) as highest bidder. 12491. Branch V in LRC Case No. manipulation and unlawful acts of the defendants in causing the levy of the subject property with an estimated commercial value of P200. docketed as Civil Case No. 1982 conveying and transferring the said property to [petitioners]. wife of Leonardo Yamane. The appearance of his name on the Transfer Certificate of Title (TCT) was deemed to be merely descriptive of the civil status of the registered owner. On December 28. entitled Florence Pucay De Gomez. a Final Sheriffs Certificate of Sale was eventually issued on August 26. 1985. No redemption having been made during the one-year period. 505-R. Civil Case No. K. The said property was scheduled to be sold at public auction on August 11. that there is no flaw or irregularity in the auction sale. De Guzman in Civil Case No. Elsie Pucay Kiwas and Muriel Pucay Yamane v. 2003 Resolution. [petitioners] denied the material allegations of the complaint and interposed the following special affirmative defenses: that the cause of action was barred by prior judgment. 417-R and 505-R. 505-R was dismissed on October 15. 2288. should not be held answerable for the personal obligation of the Pucay sisters. his late wife. against [petitioners] and Atty. the Regional Trial Court (RTC) of Baguio City.000. and that since the execution sale was made in accordance with Section 21. the RTC dismissed the case for lack of merit. Guillermo De Guzman alleging. in gist.

Because of petitioners failure to establish that the land in question had been acquired by Muriel using her exclusive funds. they posit two issues. despite the fact that the respondent failed to perfect his appeal within the 15-day reglementary period set by the Rules of Court. always claimed the said property as her own exclusive paraphernal property and not as property co-owned with her husband. and absent any showing of some advantage or benefit that accrued to their conjugal partnership from the transaction between the Pucay sisters and Atty. and eventually denied it in its Order dated June 5. assuming. the procedural question of whether the CA erred in giving due course to respondents lapsed appeal.[11] Hence. on or before May 30. They raise. The appellate court further held thus: x x x [T]he disputed property being a conjugal property of [respondent] and his wife. 1841. De Guzman. II. the CA concluded that the contested land was conjugal property. the respondent herein. were declared null and void. The Courts Ruling The Petition has no merit. Ruling of the Court of Appeals The CA reversed the RTCs Decision. According to the appellate court. first. The Court of Appeals gravely erred in declaring the subject property as conjugal property. The Court of Appeals gravely erred in taking cognizance of the appeal and in not dismissing the same. 1998. even during her lifetime. property acquired during marriage is presumed to be conjugal. unless the exclusive funds of one spouse are shown to have been used for the purpose. both indicating that Muriel Pucay Yamane was married to Leonardo Yamane.[9] which was filed on May 28. 1998. 1998. this Petition. and. despite the existence of clear evidence showing that the subject property is the exclusive paraphernal property of Muriel who. Procedural Issue: Whether Respondents Appeal Should Be Given Due Course Issues Petitioners submit the following issues for our consideration: Petitioners contend that the CA erred in giving due course to the appeal filed by respondent beyond the 15-day reglementary period.Motion for Reconsideration of the Decision. the substantive issue of whether the subject property is conjugal or paraphernal. 1998. The Sheriffs Certificate of Sale dated August 12. The trial court granted[8] his Motion. [13] In the main. the public auction sale of the subject property in favor of [petitioners] is null and void. and by the undisputed testimony of the previous owner. ex grati argumenti. . Eugene Pucay. The Court of Appeals. 1982. second. received the Motion for Reconsideration. That the land was acquired during the spouses coverture was sufficiently established by the TCT and the Deed of Absolute Sale. 1981. gravely erred in ruling that the same cannot answer for the charging lien of Atty. that the subject property is conjugal property between respondent and Muriel. Guillermo de Guzman in Civil Case No.[10] He then elevated the matter to the CA on June 15. and the Final Sheriffs Certificate of Sale dated August 26.[12] I. III.

we would rather excuse a technical lapse and afford respondent a review of the case on appeal. before the Family Code took effect on August 3. b) the existence of special or compelling circumstances. in some exceptional cases. 1998. 1998. d) causes not entirely attributable to the fault or negligence of the party that would be favored by the suspension of the rules. The new counsel could only file the appeal four days after the prescribed reglementary period was over. By this time. In some of those instances. therefore. These exceptions were cited in Manila Memorial Park Cemetery v. the original period to appeal had expired. but also jurisdictional. 1998. In Republic vs.[19] We believe that a suspension of the Rules is similarly warranted in the present controversy. until April 23. It should be clear that the Rules prohibit an extension to file a motion for reconsideration.Concededly. rather than to dispose of the case on technicality and cause grave injustice in the process.such as fraud. On the latter basis. 1998. c) the merits of the case. the transaction was aptly covered by the then governing provisions of the New Civil Code. . National Labor Relations Commission. Prior to the latter date. we shall resolve the issue of the nature of the contested property. Branch 4 (in Civil Case No.[18] from which we quote: In Ramos vs. the presence of any justifying circumstance recognized by law -. must be set aside. the Court allowed the perfection of an appeal by the Republic despite the delay of six days to prevent a gross miscarriage of justice since the Republic stood to lose hundreds of hectares of land already titled in its name and had since then been devoted for public purposes. but was denied. accident. in which the Court dispensed with technical infirmities and gave due course to tardy appeals. mistake or excusable negligence -. and a dismissal of the appeal would have had the effect of the appellant being ordered twice to make the same reparation to the appellee. he moved that his new counsel be allowed to file a motion for reconsideration on May 30. upon consideration of a) matters of life.[20] Accordingly. and the lapse of the appeal period of fifteen days deprives a court of the jurisdiction to alter a final judgment. however. Respondent subsequently filed a Notice of Appeal on June 15. 1988. CA. and f) the fact that the other party would not be unjustly prejudiced. the Court has allowed the relaxation of the rules regulating the reglementary periods of appeal. In Olacao vs. He had.[16] In other instances. however. e) the failure to show that the review being sought was merely frivolous and dilatory. Bagasao. within which to file an appeal. the Court excused the delay of four days in the filing of the notice of appeal because the questioned decision of the trial court had been served upon appellant Ramos at a time when her counsel of record was already dead. 1998. 417-R). The Court has come to the conclusion that the Decision of the RTC. therefore. liberty.[17] Indeed. Substantive Issue: Paraphernal or Conjugal? The purchase of the property had been concluded in 1967. [15] There have been exceptions.properly vested the judge with discretion to approve or admit an appeal filed out of time. a tardy appeal was accepted considering that the subject matter in issue had theretofore been judicially settled with finality in another case. Court of Appeals. Thus. he received a copy of the RTC Decision on April 8. It was eventually filed on May 28. It would be far better and more prudent to attain the ends of justice. honor or property. We have carefully studied the merits of the case and noted that the review being sought has not been shown to be merely frivolous and dilatory.[14] The perfection of an appeal in the manner and within the period prescribed by the Rules of Civil Procedure is not only mandatory. lapsed appeals were allowed in order to serve substantial justice.

No.[34] Hence.[22] the party who invokes the presumption must first prove that the property was acquired during the marriage. As stated earlier. We affirm and quote below. The failure of respondent to redeem the parcel of land within the redemption period after the auction sale indicated that he was not its co-owner. 505-R was not the nature of the subject piece of land being levied upon. In that case. Unilateral Declaration Respondents interest cannot be prejudiced by the claim of Muriel in her Complaint in Civil Case No. It is clear enough that the presently disputed piece of land pertains to the conjugal partnership. the trial courts reliance on Stuart v. simply because the title and the Deed of Sale covering the parcel of land were in the name of Muriel alone. Second.[29] We then follow the rule that proof of the acquisition of the subject property during a marriage suffices to render the statutory presumption operative. They allege that his failure to file a denial or opposition in those cases is tantamount to a judicial admission that militates against his belated claim.[32] Besides.[24] Moreover. the issue presented in Civil Case No. it cannot be contended in the present case that. 505-R. the nature of a property -. they insist that it belonged exclusively to her for the following reasons: First. Respondent never denied nor opposed her claim in Civil Case No.[25] There must be strict proof of the exclusive ownership of one of the spouses.[30] Nonetheless. They acquired it from Eugene Pucay on February 27.[31] Thus.[28] or specifically during the marriage. it was therefore her personal and exclusive property.[27] The CA committed no error in declaring that the parcel of land belonged to the conjugal partnership of Spouses Muriel and Leonardo Yamane. the document should have indicated this fact or carried the name of respondent as buyer.whether conjugal or paraphernal -. Yatco[35] was clearly erroneous. for easy reference. Significantly. no unilateral declaration by one spouse can change the character of a conjugal property. the presumption may be rebutted only with strong. Josephine Go). the relevant dispositions of the CA: . Third. which she had filed during her lifetime. to rebut the presumption of the conjugal nature of the property. that the disputed parcel of land was her exclusive paraphernal property. the presumption in favor of conjugality does not operate if there is no showing of when the property alleged to be conjugal was acquired. categorical and convincing evidence. Guillermo de Guzman was entitled to a charging lien. petitioners must present clear and convincing evidence. Petitioners concede that the property was acquired during the subsistence of the marriage of Muriel to respondent. the mere registration of a property in the name of one spouse does not destroy its conjugal nature.[26] and the burden of proof rests upon the party asserting it. 505-R that the subject parcel of land was her paraphernal property. We will discuss the three arguments seriatim.Article 160 of the New Civil Code provides that all property of the marriage is presumed to belong to the conjugal partnership.is determined by law and not by the will of one of the spouses. The Deed of Absolute Sale of the property is in the sole name of Muriel.[33] Deed and Title in the Name of One Spouse Further. clear. unless it be proved that it pertains exclusively to the husband or to the wife. In concluding that it was paraphernal. but whether Atty. had the spouses jointly purchased this piece of land. 01616 (entitled Muriel Pucay Yamane v. and that no lawyer-client relationship had been established between them. Muriel claimed that she had not officially retained him as counsel. Petitioners posit that.[23] In other words.[21] As a conditio sine qua non for the operation of this article in favor of the conjugal partnership. 1967. or in AG-GR Sp.

What was material was the time the fishpond lease right was acquired by the grantee. 2288.x x x. all property acquired by the spouses. Court of Appeals. This fact was specifically admitted by petitioners. the conclusion is that the contested land is conjugal property. and that was during the lawful existence of Matildes marriage to Tiburcio. during the marriage is presumed to belong to the conjugal partnership of gains. The presumption not having been overthrown. Mere registration of the contested property in the name of the wife is not sufficient to establish the paraphernal nature of the property.[38] Respondent claimed that the parcel of land was conjugal. x x x [T]his presumption is rebuttable. The foregoing points clearly explain the failure of respondent to redeem the property.[39] Notwithstanding his claim. which was on April 9.[44] Redemption would have served as an implied admission of the regularity of the sale and estopped him from later impugning its validity on that ground. it is incumbent upon [petitioners] to adduce strong. The next question before us is. the disputed piece of land was sold at a public auction on August 11.[41] respondent raised the issue of the conjugal nature of the property and reserved his right to file an independent action to annul the auction sale. the fact is that he filed a Third-Party Claim[37] with the sheriff. his right to prove his claim in a separate and independent action was upheld.[36] Non-Redemption After the Auction Sale The non-redemption of the property by respondent within the period prescribed by law did not. unless it is proved that it pertains exclusively to the husband or to the wife. the presumption that it is conjugal therefore stands. he instituted the present case for annulment and cancellation of the auction sale. but only with strong. it granted the Petition to issue a new certificate of title in favor of Petitioner Josephine Mendoza Go. clear and convincing evidence that Muriel bought the same with her exclusive funds. The fact that the grant was solely in the name of Matilde did not make the property paraphernal property. the fishpond lease right is not paraphernal having been acquired during the coverture of the marriage between Matilde and Tiburcio. and a Final Sheriffs Certificate of Sale dated August 26. Case No.[40] Likewise. Contrary to petitioners allegation.[42] however. regardless of in whose name the same is registered. Consequently issued were a Sheriffs Certificate of Sale dated August 12. regardless of in whose name the same is registered. upon learning of the levy and impending auction sale. Misplaced is petitioners emphasis on his failure to do so within the period required by law.[45] Since petitioners have failed to present convincing evidence that the property is paraphernal. during the marriage is presumed to belong to the conjugal partnership of gains. unless it is proved that it pertains exclusively to the husband or to the wife. indicate the absence of his right or title to it. [Petitioners] failed to discharge the burden. clear and convincing evidence. 1981. To quote: As a general rule. 1981. Instead. in his Opposition (Answer) to the Petition in LRC File Adm. To prove that it is nonetheless paraphernal property. under Section 75 of Presidential Decree 1529. and that he could not answer for the separate obligation of his wife and her sisters. 1940. In the case at bar. Nowhere in the evidence presented by them do We find any indication that the land in question was acquired by Muriel with her exclusive funds. in any way.[43] Thus. The record as well as the foregoing established jurisprudence lead us to conclude that the contested property was indeed acquired during the marriage of herein [respondent] and Muriel. that all the property acquired by the spouses. whether the . In its March 30. because he was not the registered owner of the property. Branch 5 of the RTC of Baguio City did not rule on either the actual ownership or the nature of the parcel of land. We are unable to go along with [petitioners] contention that the subject property was acquired by Muriel with her exclusive funds. Rather. The burden of proving that the property belongs exclusively to the wife rests upon the party asserting it. This reminds Us of the teaching in the recent case of Diancin v. 1983 Order. 1982. respondent had no legal standing to question the auction sale. It found that. Mere assertion of the propertys paraphernal nature is not sufficient. because redemption in this case would have been inconsistent with his claim that the sale was invalid.

[50] Moreover. Under the New Civil Code. 1841 for the Pucay sisters had. The contract or transaction between Atty. The power of the court in executing judgments extends only to properties unquestionably belonging to the judgment debtor alone.[56] WHEREFORE. [46] The recovery was done during the marriage.[53] or when the wife gives moderate donations for charity. De Garcia that before a conjugal property could be held liable for the obligation contracted by a spouse. Muriel was acting privately for her exclusive interest when she joined her two sisters in hiring the services of Atty. Inc. [55] In this case.[54] Failure to establish any of these circumstances in the present case means that the conjugal asset may not be bound to answer for Muriels personal obligation. 1841) the balance of the purchase price of the sale of the exclusive property of Muriel and her sisters. however. [48] We find no reason to deviate from the CAs findings.[49] This piece of land may not be used to pay for her indebtedness.[51] when administration of the conjugal partnership is transferred to the wife by the courts[52] or by the husband. SO ORDERED. This onus. The lawyers legal services were engaged to recover from Cypress Corporation (in Civil Case No. and the assailed Decision and Resolution AFFIRMED. a wife may bind the conjugal partnership only when she purchases things necessary for the support of the family. [petitioners]. because her obligation has not been shown to be one of the charges against the conjugal partnership.cannot be levied upon. are her exclusive responsibility and certainly cannot be charged against the contested conjugal property. de Guzman were acquired during the marriage of respondent and Muriel. De Guzman to handle a case for them. the burden is on the [petitioners] to prove that the services rendered by Atty. there must be a showing of some advantage or benefit that accrued to the conjugal partnership. somehow. therefore. Accordingly. whatever expenses were incurred by Muriel in the litigation for her and her sisters private and exclusive interests. De Guzman and the Pucay sisters appears to have been incurred for the exclusive interest of the latter. De Guzman in handling Civil Case No. failed to discharge. which are amply supported by evidence. or when she borrows money for that purpose upon her husbands failure to deliver the needed sum. levy on execution of the same property should still be denied in accordance with the ruling in Luzon Surety Co. Costs against petitioners. redounded to the benefit of the conjugal partnership of herein [respondent] and Muriel.[47] The CA elucidated on this matter as follows: x x x. the property -. The expenses incurred by Muriel for the recovery of the balance of the purchase price of her paraphernal property are her exclusive responsibility. Concededly. the Petition is DENIED.charging lien of Atty. Even on the remote assumption that the conjugal property could be held liable. de Guzman may be properly enforced against the piece of land in question. v. her rights to the property are merely inchoate prior to the liquidation of the conjugal partnership. Charging Lien Not Chargeable Against Conjugal Property It is indisputable that the services of Atty. ..being conjugal in nature -.

[7] . (petitioner) to challenge the decision[2] and the resolution[3] of the Court of Appeals (CA) in CA-G. and SERENO. The CA resolution denied the petitioners subsequent motion for reconsideration. Pasig City.: THIRD DIVISION FRANCISCO MUOZ. Subject of the present case is a seventy-seven (77)-square meter residential house and lot located at 170 A. Jr. J.[4] The CA decision set aside the decision[5] of the Regional Trial Court (RTC). Mandaluyong City (subject property). Branch 166. 63665. Chairperson. No.R. Petitioner. - versus - We resolve the present petition for review on certiorari[1] filed by petitioner Francisco Muoz.ERLINDA RAMIREZ and ELISEO CARLOS. Promulgated: August 25. JR.. JR. 1427. CV No. G. 7650 of the Registry of Deeds of Mandaluyong City in the name of the petitioner. 156125 Present: CARPIO MORALES. BRION. are briefly summarized below.. 2010 x-----------------------------------------------------------------------------------------x DECISION BRION. 57126.. BERSAMIN. in the name of Erlinda Ramirez.R. gathered from the records. Respondents. Bonifacio Street.[6] The residential lot in the subject property was previously covered by TCT No. covered by Transfer Certificate of Title (TCT) No. FACTUAL BACKGROUND The facts of the case. in Civil Case No. married to Eliseo Carlos (respondents). VILLARAMA. J. JJ.

Mandaluyong City. The petitioner countered that there was a valid contract of sale. 1427. the residential lot was part of a large parcel of land owned by Pedro Ramirez and Fructuosa Urcla. 1993.[21] THE RTC RULING In a Decision dated January 23. 1427 with the GSIS mortgage cancelled.66. for herself and as attorney-in-fact of Eliseo. 7650 had been issued in the petitioners name. even without Eliseos consent as . 1427. executed by Erlinda. the respondents presented the results of the scientific examination[18] conducted by the National Bureau of Investigation of Eliseos purported signatures in the Special Power of Attorney[19] dated April 29. or on March 29.000. 1993.00 advance. it was the subject of Civil Case No. filed by the surviving heirs of Pedro against another heir.00 housing loan. claiming that there was no sale but only a mortgage transaction. and submits an affidavit signed by Eliseo stating that he waives all his rights to the subject property.445. since Eliseos affidavit was unsigned. the sale was with the implied promise to repurchase within one year. before the RTC. 1992. on September 8. to the Government Service Insurance System (GSIS) to secure a P136.687.27[11] to cancel the GSIS mortgage on TCT No.[17] In the RTC.000. 1427. the RTC dismissed the complaint. and made her sign a document purporting to be the mortgage contract. 1992 and the Affidavit of waiver of rights dated April 29. It found that the subject property was Erlindas exclusive paraphernal property that was inherited from her father. including Erlinda. 1993).00 balance and to cancel the mortgage.On April 6. During the pendency of the RTC case. He alleged that the respondents sold the subject property to him after he refused their offer to mortgage the subject property because they lacked paying capacity and were unwilling to pay the incidental charges. and. as a result of a compromise agreement. Erlindas brother. Erlindas parents.000. It ordered Erlinda and her family to vacate the subject property. The respondents alleged that in April 1992.[20] showing that they were forgeries. the petitioner granted them a P600. the petitioner refused to give the P402. and the documents transferring the title to the petitioners name were falsified.00 loan.[8] The respondents then constructed a thirty-six (36)-square meter. 1997. but returned Eliseos affidavit. 50141. to be secured by a first mortgage on TCT No.1427 in their name. unsigned. Amado Ramirez.[15] when the respondents failed to pay the monthly rentals despite demand. the petitioner kept the title. and in 1993. the petitioner promised to give the P402. Amado agreed to transfer to the other compulsory heirs of Pedro.00 advance because it had been used to pay the GSIS loan. The petitioner. payable within twenty (20) years.000. 1995. the MeTC decided the ejectment case. 1993.[14] when the respondents failed to repurchase the subject property within the one-year period despite notice. the respondents would lease the subject property for a monthly rental of P500.000. he caused the transfer of title in his name on July 14.000. twostory residential house on the lot. Erlinda paid GSIS P176. Branch 60.00. cancelling TCT No. a complaint for annulment of sale. their rightful shares of the land.00[10] advance to cancel the GSIS mortgage. 1427. and demanded that Erlinda return the P200.000.[13] during which period (from May 1. [12] in May 1992. It also upheld the sale to the petitioner. 1993.000. they discovered that TCT No. 1992 to April 30. dated April 30. through monthly salary deductions of P1.00 advance. since Erlinda could not return the P200.00. introduced evidence on the paraphernal nature of the subject property since it was registered in Erlindas name. 1992. and to pay the overdue rentals. or sixteen days before the filing of the RTC case for annulment of the deed of absolute sale. the petitioner gave Erlinda a P200.500. he filed an ejectment case[16] against them with the Metropolitan Trial Court (MeTC).[9] On September 24. 1989. the title to the subject property was transferred to the petitioner by virtue of a Deed of Absolute Sale. the respondents filed a complaint with the RTC for the nullification of the deed of absolute sale. Pasig City. Eliseo. a Bureau of Internal Revenue employee. with the P200. mortgaged TCT No. for a stated consideration of P602. with Erlindas consent. On July 14. to surrender its possession to the petitioner.00 balance when Erlinda surrenders TCT No. Erlinda surrendered to the petitioner the clean TCT No. Branch 158. on the other hand.

whether the acquisition appears to have been made. became conjugal property when it was used as collateral for a housing loan that was paid through conjugal funds Eliseos monthly salary deductions.[33] First Issue: Paraphernal or Conjugal? As a general rule. it was acquired during their marriage and.[31] and. because (a) Erlinda did not deny her signature in the document. from the facts is manifestly mistaken.[24] the CA held that the subject property. Thus. Fortun.00 only of the total stated price of P602. as in the present case. therefore. the subject property. confirming the conversion of the loan application to a deed of sale.[34] . if the inference. but an equitable mortgage because (a) they remained in possession of the subject property even after the execution of the deed of absolute sale. 2002. They also submit that the transaction between the parties was not a sale. drawn by the CA. (2) whether the contract between the parties was a sale or an equitable mortgage. (b) they paid the 1993 real property taxes due on the subject property. 1992. and since the value of the house is less than the value of the lot.000. then Erlinda retained ownership of the subject property. and set aside the RTC decision. and (c) they received P200.000. contracted or registered in the name of one or both spouses. is presumed to be conjugal unless the contrary is proved. However. considered conjugal property. THE CA RULING The CA decided the appeal on June 25. respectively. the CA declared void the deed of absolute sale. THE PETITION The petitioner argues that the CA misapplied the second paragraph of Article 158 of the Civil Code and Calimlim-Canullas[28] because the respondents admitted in the complaint that it was the petitioner who gave the money used to cancel the GSIS mortgage on TCT No. originally Erlindas exclusive paraphernal property. (c) Erlinda executed a letter. and. THE ISSUE The issues in the present case boil down to (1) whether the subject property is paraphernal or conjugal. Applying the second paragraph of Article 158[23] of the Civil Code and CalimlimCanullas v. not a mortgage. It concluded that the NBI finding that Eliseos signatures in the special power of attorney and in the affidavit were forgeries was immaterial because Eliseos consent to the sale was not necessary. Hon.[30] (b) Erlinda agreed to sign a contract of lease over the subject property.[22] The respondents elevated the case to the CA via an ordinary appeal under Rule 41 of the Revised Rules of Court. When the CA denied[26] the subsequent motion for reconsideration.[27] the petitioner filed the present petition for review on certiorari under Rule 45 of the Revised Rules of Court.[32] THE CASE FOR THE RESPONDENTS The respondents submit that it is unnecessary to compare the respective values of the house and of the lot to determine ownership of the subject property. cannot be validly sold or mortgaged without Eliseos consent. dated April 30. Article 120[29] of the Family Code is the applicable rule. therefore. OUR RULING We deny the present Petition but for reasons other than those advanced by the CA. 1427.the deed of absolute sale bore the genuine signatures of Erlinda and the petitioner as vendor and vendee. This Court is not a trier of facts. He also argues that the contract between the parties was a sale. we can review the evidence to allow us to arrive at the correct factual conclusions based on the record. all property acquired during the marriage. pursuant to Article 124[25] of the Family Code.00.

held that the residential lot became conjugal when the house was built thereon through conjugal funds. As the respondents were married during the effectivity of the Civil Code.[38] The residential lot. have been superseded by those found in the Family Code (Articles 105 to 133). said property shall be retained in ownership by the owner-spouse. shall be excluded from the community property and be the exclusive property of each spouse.[39] Under the second paragraph of Article 158 of the Civil Code. Article 105 of the Family Code states: Thus. Under this provision. when the cost of the improvement and any resulting increase in value are more than the value of the property at the time of the improvement. the RTC and the CA apparently failed to consider the real nature of the contract between the parties. However. the written consent of Eliseo to the transaction was not necessary. otherwise. is Erlindas exclusive paraphernal property.[40] where we held that when the conjugal house is constructed on land belonging exclusively to the husband. From April 6. but the husband is entitled to reimbursement of the value of the land at the liquidation of the conjugal partnership. we refer to the provisions of the Family Code. properties acquired by gratuitous title by either spouse. which supersedes Article 158 of the Civil Code. likewise subject to reimbursement of the cost of the improvement. and not the Civil Code. provides the solution in determining the ownership of the improvements that are made on the separate property of the spouses. 1989. however.[43] Eliseo paid about P60. Second Issue: . in determining the nature of the subject property. 1992. applying the second paragraph of Article 158 of the Civil Code and CalimlimCanullas. Considering the P136. a land that originally belonged to one spouse becomes conjugal upon the construction of improvements thereon at the expense of the partnership. since the petitioner advanced the P176.In the present case.[44] not the entire amount of the GSIS housing loan plus interest.755. we find that Eliseo paid a portion only of the GSIS loan through monthly salary deductions. at the expense of the partnership or through the acts or efforts of either or both spouses.[35] Pursuant to Articles 92[36] and 109[37] of the Family Code.755. it is fairly reasonable to assume that the value of the residential lot is considerably more than the P60. We applied this provision in CalimlimCanullas. 1989[42] to April 30. Article 120 of the Family Code. subject to reimbursement of the value of the property of the owner-spouse at the time of the improvement.00 amount of the GSIS housing loan. the Civil Code provisions on conjugal partnership of gains. the land ipso facto becomes conjugal. the subject property remained the exclusive paraphernal property of Erlinda at the time she contracted with the petitioner. as provided in Article 256.[41] In the present case.76 amount paid by Eliseo through monthly salary deductions.27[45] paid by Erlinda to cancel the mortgage in 1992. The CA. The NBI finding that Eliseos signatures in the special power of attorney and affidavit were forgeries was immaterial. therefore. xxxx The provisions of this Chapter [on the Conjugal Partnership of Gains] shall also apply to conjugal partnerships of gains already established between spouses before the effectivity of this Code. clear evidence that Erlinda inherited the residential lot from her father has sufficiently rebutted this presumption of conjugal ownership. its provisions on conjugal partnership of gains (Articles 142 to 189) should have governed their property relations. Nonetheless. the entire property of one of the spouses shall belong to the conjugal partnership. Thus. with the enactment of the Family Code on August 3. including Article 158. except with respect to rights then already vested. during the marriage.76.445. The CA misapplied Article 158 of the Civil Code and Calimlim-Canullas We cannot subscribe to the CAs misplaced reliance on Article 158 of the Civil Code and Calimlim-Canullas.500. without prejudice to vested rights already acquired in accordance with the Civil Code or other laws.

1993. 1992.[49] Second. or other requisites demanded by a statute. the petitioner gave a P200. and.10. CA. respondents paid the real property taxes on July 8. 1993.000. despite the alleged sale on April 30. is sufficient to support the conclusion that a contract of sale is in fact an equitable mortgage. but refused to give the P402. Erlinda secured the payment of the principal debt owed to the petitioner with the subject property. a daily interest of P641. First. not the concurrence nor an overwhelming number of the enumerated circumstances.00 to the petitioner.660. (b) when the vendor remains in possession as lessee or otherwise. we can step in to temper the interest rates if they are unconscionable. we ordered the . may be presumed to be an equitable mortgage: (a) when the price of a sale with right to repurchase is unusually inadequate.Sale or Equitable Mortgage? Jurisprudence has defined an equitable mortgage "as one which although lacking in some formality. she owed P384. 1992 to April 30.[55] where we established the reciprocal obligations of the parties under an equitable mortgage. While parties are free to stipulate on the interest to be imposed on monetary obligations.00 per month for a P200.00. such payment is coupled with continuous possession of the property. as here.000.00 to Erlinda is undisputed. computed from April 30. it constitutes evidence of great weight that the person under whose name the realty taxes were declared has a valid and rightful claim over the land.000.00 balance when Erlinda failed to submit Eliseos signed affidavit of waiver of rights. The records show that the petitioner. prompted the latter to transfer the subject property to the petitioner.[50] payment of real property taxes is a usual burden attaching to ownership and when.[48] Contract is an equitable mortgage In the present case.[53] sans any evidence of how this amount was arrived at. plus legal interest of 12% per annum.00 loan is patently unconscionable. there are four (4) telling circumstances pointing to the existence of an equitable mortgage.[47] For the presumption of an equitable mortgage to arise under Article 1602 of the Civil Code. Third. (b) that their intention was to secure an existing debt by way of a mortgage. Thus.[52] Thus. two (2) requisites must concur: (a) that the parties entered into a contract denominated as a contract of sale. (c) when upon or after the expiration of the right to repurchase another instrument extending the period of redemption or granting a new period is executed. nevertheless reveals the intention of the parties to charge real property as security for a debt. Any of the circumstances laid out in Article 1602 of the Civil Code. (d) when the purchaser retains for himself a part of the purchase price.[51] Fourth. claimed in the Statement of Account sent by the petitioner. the respondents remained in possession as lessees of the subject property. sent Erlinda a Statement of Account showing that as of February 20. These instances apply to a contract purporting to be an absolute sale. (f) in any other case where it may be fairly inferred that the real intention of the parties is that the transaction shall secure the payment of a debt or the performance of any other obligation. the parties. 1992. 1993. and. Additionally. 1993. We cannot sustain the ballooned obligation of P384. This advance.000. That the petitioner advanced the sum of P200. was P641.00. there being no impossibility nor anything contrary to law in this intent.660. they must first return the amount of P200. effective May 1. (e) when the vendor binds himself to pay the taxes on the thing sold. or form or words.000. in fact. in fact.[54] In Lustan v."[46] Article 1602 of the Civil Code enumerates the instances when a contract. in fact. and the daily interest.10 or P19. executed a one-year contract of lease. regardless of its nomenclature. the parties clearly intended an equitable mortgage and not a contract of sale. starting February 21.00 advance to settle the GSIS housing loan. before the respondents can recover the subject property.233. the petitioner retained part of the purchase price.

The Deed of Absolute Sale dated April 30. and 2.00. with 12% legal interest from April 30. we hereby DENY the present petition. The assailed decision and resolution of the Court of Appeals in CA-G. by respondents within NINETY DAYS FROM THE FINALITY OF THIS DECISION. 1992 is hereby declared an equitable mortgage. The petitioner is obligated to RECONVEY to the respondents the property covered by Transfer Certificate of Title No. CV No.000. UPON THE PAYMENT OF P200.reconveyance of the property to the rightful owner therein upon the payment of the loan within ninety (90) days from the finality of the decision. in light of all the foregoing. Costs against the petitioner. 1992.R.[56] WHEREFORE. EN BANC . 57126 are AFFIRMED with the following MODIFICATIONS: 1. 7650 of the Register of Deeds of Mandaluyong City.

Plagata prepared[2] dated April 29. 2010 x ---------------------------------------------------------------------------------------.versus . No. did not give her consent to it. Roca. Plagata who then worked on the other requirements of the sale.: This case is about a husbands sale of conjugal real property. the Rocas). Promulgated: Respondents.. J. he went to see Rosario in one of his trips to Manila and had her sign an affidavit of consent. Plagata notarized Rosarios affidavit in Zamboanga City. Six years later in 1988. Rosario Gabriel Roca (Rosario).00 mentioned in their agreement. . Pilar R. 1990 Tarciano passed away. Eight years later in 1997. C. 1982 she sold it to her son. and Rose Marie R.000. A new title was issued in the name of the spouses[5] who immediately constructed a building on the lot. Carpio. Annabelle R. Her signature on the affidavit of consent had been forged. 1989 Tarciano executed a deed of absolute sale[4] in favor of the Fuentes spouses. They then paid him the additional P140.Leonardo-De Castro. within six months. and Mendoza.MANUEL O. Jr. loss of right to declare nullity of sale.. JOSON. Brion. JJ. FUENTES and G. Villarama.. Malcampo.J. On January 28. respondents Conrado G. And. Zamboanga City. The agreement required the Fuentes spouses to pay Tarciano a down payment of P60. Corona.00 for the transfer of the lots title to him. They thus prayed that . April 21. Roca (Tarciano) under a deed of absolute sale. If Tarciano was unable to comply with these conditions. and prescription. Trinidad (collectively.000. Present: Puno. the Fuentes spouses were to take possession of the lot and pay him an additional P140. Petitioners. Nachura. Del Castillo. to the sale.000. On January 11. Bersamin. the Fuentes spouses would become owners of the lot without any further formality and payment. filed an action for annulment of sale and reconveyance of the land against the Fuentes spouses before the Regional Trial Court (RTC) of Zamboanga City in Civil Case 4707. Atty. The Facts and the Case Sabina Tarroza owned a titled 358-square meter lot in Canelar. Rosario. The buyers claim valid consent. Tarciano T. Jr. followed by his wife Rosario who died nine months afterwards. According to the lawyer. depending on whether or not he succeeded in demolishing the house standing on it. CONRADO G. They later signed an agreement to sell that Atty. FUENTES. namely. CRISTOBAL and PILAR MALCAMPO. the children of Tarciano and Rosario. They arranged to meet at the office of Atty.000. Carpio Morales. Upon Tarcianos compliance with these conditions.00. Joson. Perez. Velasco. ROCA. John Paul M. Abad. represented by her son. together with Tarcianos sister. ANNABELLE R. Romulo D. Cristobal. The Rocas claimed that the sale to the spouses was void since Tarcianos wife. ROSE MARIE R.R.[3] As soon as Tarciano met the other conditions. Plagata whom they asked to prepare the documents of sale.00 or P160.[1] But Tarciano did not for the meantime have the registered title transferred to his name. On October 11. 1988. Tarciano was to clear the lot of structures and occupants and secure the consent of his estranged wife. Peralta. The parties left their signed agreement with Atty. Tarciano offered to sell the lot to petitioners Manuel and Leticia Fuentes (the Fuentes spouses). 178902 LETICIA L. which agreement expressly stated that it was to take effect in six months.x DECISION ABAD. employing a challenged affidavit of consent from an estranged wife.

Since Tarciano and Rosario were married in 1950.[13] Unsatisfied with the CA decision. Plagata. dismissing the case.[7] All the same. He admitted. 1989. however. the CA concluded that their property relations were governed by the Civil Code under which an action for annulment of sale on the ground of lack of spousal consent may be brought by the wife during the marriage within 10 years from the transaction. It ruled that the action had already prescribed since the ground cited by the Rocas for annulling the sale. Here. Comparing Rosarios standard signature on the affidavit with those on various documents she signed. the Rocas filed their action in 1997. The CA found sufficient evidence of forgery and did not give credence to Atty. 1989. Manila.[9] Moreover. the Rocas failed to present clear and convincing evidence of the fraud. although the Rocas presented a handwriting expert. the four-year prescriptive period for nullifying the sale on ground of fraud had already lapsed. on September 15. Considering. Consequently. the Fuentes spouses pointed out that the claim of forgery was personal to Rosario and she alone could invoke it. Plagatas testimony remained technically unrebutted.[14] The Issues Presented The case presents the following issues: 1. the Rocas may be deemed to have notice of the fraud from the date the deed of sale was registered with the Registry of Deeds and the new title was issued. Plagata who testified that he personally saw Rosario sign the affidavit at her residence in Paco. Since the Fuentes spouses were also builders in good faith. brought in 1997 fell within 10 years of the January 11. the Rocas expert testified that the signatures were not written by the same person. already prescribed under Article 1391 of the Civil Code four years after its discovery.[6] The spouses denied the Rocas allegations. that the sale between the Fuentes spouses and Tarciano was merely voidable. They presented Atty. The CA did not award damages in favor of the Rocas and deleted the award of attorneys fees to the Fuentes spouses. the action that the Rocas. She personally signed the affidavit in the presence of Atty. the wife whose consent was not had. 1988.[12] On appeal. the Court of Appeals (CA) reversed the RTC decision. 2005 the RTC rendered judgment. Its jurat said differently. Mere variance in the signatures of Rosario was not conclusive proof of forgery. that he notarized the document in Zamboanga City four months later on January 11. Also. her heirs. In this case. Plagatas testimony that he saw Rosario sign the document in Quezon City. almost nine years after the title was issued to the Fuentes spouses on January 18. the CA noted significant variance between them.[11] Finally. the CA held that its annulment entitled the spouses to reimbursement of what they paid him plus legal interest computed from the filing of the complaint until actual payment. the RTC noted that Atty. Besides.[10] The RTC ruled that.[8] On February 1. they were entitled under Article 448 of the Civil Code to payment of the value of the improvements they introduced on the lot. Making the same comparison. Both the Rocas and the Fuentes spouses presented handwriting experts at the trial. 1989 sale. Whether or not Rosarios signature on the document of consent to her husband Tarcianos sale of their conjugal land to the Fuentes spouses was forged. That Tarciano and Rosario had been living separately for 30 years since 1958 also reinforced the conclusion that her signature had been forged. The law does not require spousal consent to be on the deed of sale to be valid. Whether or not the Rocas action for the declaration of nullity of that sale to the spouses already prescribed.the property be reconveyed to them upon reimbursement of the price that the Fuentes spouses paid Tarciano. the Fuentes spouses came to this court by petition for review. Whether or not only Rosario. Atty. and 3. forgery or fraud. 2. the spouses expert concluded that they were. could bring the action to annul that sale. upon comparing the questioned signature with the specimen signatures. the trial court could not be bound by his opinion since the opposing expert witness contradicted the same. Plagatas defective notarization of the affidavit of consent did not invalidate the sale. . however. Neither does the irregularity vitiate Rosarios consent.

she supposedly signed it about four months earlier at her residence in Paco. the sale is not void but merely voidable. dooms such document as proof of Rosarios consent to the sale of the land. The Court agrees with the CAs observation that Rosarios signature strokes on the affidavit appears heavy. For. on the other hand. taken together with the marks of forgery in the signature. Plagata testified. And she resided so far away in Manila. only the value of the property that Tarciano fraudulently sold. 1989 when. if the signature were genuine. the Family Code took effect on August 3. Article 166[17] prohibited him from selling commonly owned real property without his wifes consent. reliable standards for comparison. Her specimen signatures. after the dissolution of the marriage. as Atty. While a defective notarization will merely strip the document of its public character and reduce it to a private instrument. Tarciano sold the conjugal property to the Fuentes spouses on January 11. Manila on September 15. Article 173 gave Rosario the right to have the sale annulled during the marriage within ten years from the date of the sale. if he sold the same without his wifes consent. when such consent is required. the law that applies to this case is the Family Code. The way the letters R and s were written is also remarkably different. When Tarciano married Rosario. 1988. 1988. Plagata admittedly falsified the jurat of the affidavit of consent. The CA found that Rosarios signature had been forged. that falsified jurat. or any act or contract of the husband which tends to defraud her or impair her interest in the conjugal partnership property. The Fuentes spouses presented no evidence that Rosario suffered from any illness or disease that accounted for the variance in her signature when she signed the affidavit of consent. deliberate. Although Tarciano and Rosario got married in 1950. a few months after the Family Code took effect on August 3. Significantly.[16] The CA gave no weight to Atty.The Courts Rulings First. during the marriage. It would have been quite tempting for Tarciano to just forge her signature and avoid the risk that she would not give her consent to the sale or demand a stiff price for it. may demand the value of property fraudulently alienated by the husband. 1988. What is more. Second. Its Chapter 4 on Conjugal Partnership of Gains expressly superseded Title VI. Rosario had been living separately from Tarciano for 30 years since 1958. Rosarios specimen signatures were made at about the time that she signed the supposed affidavit of consent. 1988 since this clashed with his declaration in the jurat that Rosario signed the affidavit in Zamboanga City on January 11. 1989. Plagatas testimony that he saw Rosario sign the document in Manila on September 15. are consistently of a lighter stroke and more fluid. Failing in that. ask the courts for the annulment of any contract of the husband entered into without her consent.[19] Thus: . therefore. That jurat declared that Rosario swore to the document and signed it in Zamboanga City on January 11. Thus: Art. They were. The sale is still void without an authentic consent. she or her heirs may demand. the Family Code provisions were also made to apply to already existing conjugal partnerships without prejudice to vested rights. not the Civil Code. Notably. That the Fuentes spouses honestly relied on the notarized affidavit as proof of Rosarios consent does not matter. and within ten years from the transaction questioned. The key issue in this case is whether or not Rosarios signature on the document of consent had been forged. Should the wife fail to exercise this right. and forced. Contrary to the ruling of the Court of Appeals.[18] Further. she or her heirs. as already stated. after dissolution of the marriage. But. The CA observed a marked difference between her signature on the affidavit of consent[15] and her specimen signatures. Still. Atty. 173. 1989. The wife may. While its Article 165 made Tarciano the sole administrator of the conjugal partnership. The variance is obvious even to the untrained eye. the Civil Code put in place the system of conjugal partnership of gains on their property relations. Book I of the Civil Code on Property Relations Between Husband and Wife. the fact that she gave her consent to her husbands sale of the conjugal land would render the other issues merely academic.

124. If. the disposition or encumbrance shall be void. She lost nothing since the sale without her written consent was void. as provided in Article 256. Rosario had agreed to sign the document of consent upon a false representation that the property would go to their children.Art. if there had been a victim of fraud in this case. 105. the applicable prescriptive period should be that which applies to fraudulent transactions. These powers do not include the powers of disposition or encumbrance which must have the authority of the court or the written consent of the other spouse. then she would have four years from the time she discovered the fraud within which to file an action to declare the sale void. . They had four years then from the time they learned that her signature had been forged within which to file an action to annul the sale and get back their money plus damages. Besides. four years from its discovery. Article 124 thus provides: Art. when Tarciano sold the conjugal lot to the Fuentes spouses on January 11. the law that governed the disposal of that lot was already the Family Code. (n) Consequently. Her consent was simply not obtained at all. namely. the Rocas ground for annulment is not forgery but the lack of written consent of their mother to the sale. brought in 1997 fell within 10 years of the January 11. an action to declare its inexistence is necessary to allow restitution of what has been given under it. it would be the Fuentes spouses in that they appeared to have agreed to buy the property upon an honest belief that Rosarios written consent to the sale was genuine. according to Article 1410 of the Civil Code does not prescribe. Thus: Art. Consequently. a void or inexistent contract has no force and effect from the very beginning. Article 124 of the Family Code does not provide a period within which the wife who gave no consent may assail her husbands sale of the real property. 1989. It simply provides that without the other spouses written consent or a court order allowing the sale. and it turned out that this was not the case. when any of its terms have been performed. the Rocas filed an action against the Fuentes spouses in 1997 for annulment of sale and reconveyance of the real property that Tarciano sold without their mothers (his wifes) written consent. x x x The provisions of this Chapter shall also apply to conjugal partnerships of gains already established between spouses before the effectivity of this Code. It cannot be validated either by ratification or prescription. In contrast to Article 173 of the Civil Code. The Fuentes spouses of course argue that the RTC nullified the sale to them based on fraud and that. The forgery is merely evidence of lack of consent. therefore. Rosario was not a victim of fraud or misrepresentation. [21] But. on the other hand. But that is not the case here. Here. their right of action already prescribed in 1993. the action that the Rocas. A void contract is equivalent to nothing and is absolutely wanting in civil effects. without prejudice to vested rights already acquired in accordance with the Civil Code or other laws. And this rule applies to contracts that are declared void by positive provision of law. 1989 sale. But. The action or defense for the declaration of the inexistence of a contract does not prescribe. Since notice of the sale may be deemed given to the Rocas when it was registered with the Registry of Deeds in 1989. In the absence of such authority or consent. not to strangers. although a void contract has no legal effects even if no action is taken to set it aside. the same would be void. Ultimately. 1410. The passage of time did not erode the right to bring such an action. Article 173 provides that the wife may bring an action for annulment of sale on the ground of lack of spousal consent during the marriage within 10 years from the transaction. It did not yet prescribe. x x x Under the provisions of the Civil Code governing contracts. even assuming that it is the Civil Code that applies to the transaction as the CA held. They never exercised the right. x x x In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the conjugal properties.[22] This action.[20] as in the case of a sale of conjugal property without the other spouses written consent. the other spouse may assume sole powers of administration. her heirs.

The Fuentes spouses point out that it was to Rosario. 1989. Plagata. It was only after all these had passed that the spouses entered the property and built on it. Annabelle R. among other things. chargeable against his estate. Atty. the P200. under Article 429 of the Civil Code. The Register of Deeds of Zamboanga City is DIRECTED to reinstate Transfer Certificate of Title 3533 in the name of Tarciano T. Respondents Gonzalo G. that the law gave the right to bring an action to declare void her husbands sale of conjugal land. and Pilar Malcampo are ORDERED to pay petitioner . But here. who is not aware that there exists in his title or mode of acquisition any flaw which invalidates it. the Register of Deeds of Zamboanga City issued a new title in the names of the Fuentes spouses. 2007 as follows: 1. as well as the Transfer Certificate of Title T-90. Rosario died in 1990. whom the parties mutually entrusted with closing and documenting the transaction.Third. He is deemed a possessor in good faith. to recover from Tarcianos heirs. Roca executed in favor of Manuel O. shall have the right to appropriate as his own the works. said Article 526 of the Civil Code. Roca.000. the Court DENIES the petition and AFFIRMS WITH MODIFICATION the decision of the Court of Appeals in CA-G. As stated above. the Fuentes spouses were under no obligation to pay for their stay on the property prior to its legal interruption by a final judgment against them. Fuentes. to exclude any person from its enjoyment and disposal.00 that they paid him. they paid the balance due him. They had no way of knowing that Rosario did not come to Zamboanga to give her consent. sown or planted in good faith.R. if the owner of the land does not choose to appropriate the building or trees after proper indemnity. In fact. And. Consequently. the land remained the property of Tarciano and Rosario despite that sale. sowing or planting. they are entitled under Article 448 to indemnity for the improvements they introduced into the property with a right of retention until the reimbursement is made. namely. 1989 that Tarciano T. he shall pay reasonable rent. Further. CV 00531 dated February 27. and the one who sowed. with legal interest until fully paid. In fairness to the Fuentes spouses. Indeed. the year after the sale. the court shall fix the terms thereof. married to Leticia L. they willingly made a 30 percent down payment on the selling price months earlier on the assurance that it was forthcoming. 3.[23] As lawful owners. the proper rent. 2. the Rocas had the right. that sale was void from the beginning.981 that the Register of Deeds of Zamboanga City issued in the names of the latter spouses pursuant to that deed of sale are DECLARED void. Does this mean that the right to have the sale declared void is forever lost? The answer is no. the Rocas. When the two died. (361a) The Rocas shall of course have the option. Joson. The Fuentes spouses had no reason to believe that the lawyer had violated his commission and his oath. the Rocas. As possessor in good faith. pursuant to Article 546 of the Civil Code. Rose Marie R.[24] What is more. The owner of the land on which anything has been built. 448.[25] of indemnifying the Fuentes spouses for the costs of the improvements or paying the increase in value which the property may have acquired by reason of such improvements. represented that he got Rosarios signature on the affidavit of consent. In such case. married to Rosario Gabriel. Roca. Cristobal. The deed of sale dated January 11. however. or to oblige the one who built or planted to pay the price of the land. after payment of the indemnity provided for in Articles 546 and 548. Thus: Art. the notarized document appears to have comforted the Fuentes spouses that everything was already in order when Tarciano executed a deed of absolute sale in their favor on January 11. WHEREFORE. Fuentes. whose consent was not obtained. the builder or planter cannot be obliged to buy the land if its value is considerably more than that of the building or trees. However. There is no evidence that they had a premonition that the requirement of consent presented some difficulty. they passed on the ownership of the property to their heirs. the Fuentes spouses appear to have acted in good faith in entering the land and building improvements on it. Further. The parties shall agree upon the terms of the lease and in case of disagreement. they should be entitled. acting on the documents submitted to it.

000. 88686. and 5.00 that the latter paid Tarciano T. Branch 96. with legal interest from January 11. at their option. No. 188289 August 20. NOVERAS. Annabelle R.spouses Manuel and Leticia Fuentes the P200. which affirmed in part the 8 December 2006 Decision2 of the Regional Trial Court (RTC) of Baler. 1989 until fully paid. DECISION PEREZ. Respondents Gonzalo G. chargeable against his estate. Respondent. Petitioner. and Pilar Malcampo are further ORDERED. with the spouses entitled to the right of retention of the land until the indemnity is made. Roca. Aurora. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.: Before the Court is a petition for review assailing the 9 May 2008 Decision1 of the Court of Appeals in CA-G. 4. to indemnify petitioner spouses Manuel and Leticia Fuentes with their expenses for introducing useful improvements on the subject land or pay the increase in value which it may have acquired by reason of those improvements. The RTC of Zamboanga City from which this case originated is DIRECTED to receive evidence and determine the amount of indemnity to which petitioner spouses Manuel and Leticia Fuentes are entitled. J.. Joson. NOVERAS. Rose Marie R. 2014 DAVID A. Roca.R . vs. LETICIA T. Cristobal. The factual antecedents are as follow: . CV No.R. SO ORDERED.

coconut plantation in San Joaquin Maria Aurora. Aurora P750. Due to business reverses. California $550.000.000.5 hectares located at Maria Aurora.00 3 3-has.00 A parcel of land with an area of 175 sq. They resided in California. Aurora P400. Atty. m.Leticia executed a Special Power of Attorney (SPA) authorizing David to sell the Sampaloc property for P2. Philippines.6 The . Noveras (Leticia) were married on 3 December 1988 in Quezon City.000. Aurora P175.770.000. Aurora P490. David was engaged in courier service business while Leticia worked as a nurse in San Francisco. Noveras.000. located at Laboy.00 USA PROPERTY FAIR MARKET VALUE House and Lot at 1155 Hanover Street. and 3) that David shall renounce and forfeit all his rights and interest in the conjugal and real properties situated in the Philippines.000.000 Bank of America Cash Deposit Life Insurance (Cash Value) $100. Upon learning that David had an extra-marital affair. located at 1085 Norma Street. Leticia filed a petition for divorce with the Superior Court of California. During the marriage.00. profit-sharing. Manila (Sampaloc property) P1. located at Sabang Baler.000. According to Leticia. David left the USA and returned to the Philippines in 2001. pension.00. Isaias Noveras. on 3 December 2003 stating that: 1) the P1. USA. Daly City. they acquired the following properties in the Philippines and in the USA: PHILIPPINES PROPERTY FAIR MARKET VALUE House and Lot with an area of 150 sq.790.00 from the sale of the Sampaloc property.00) Furniture and furnishings $3. County of San Mateo.00 A parcel of land with an area of 2. the couple paid a total of P1.David A.228.125.m.00 Agricultural land with an area of 20. When said property was about to be foreclosed.00 4 The Sampaloc property used to beowned by David’s parents. m.1Million proceeds from the sale of the Sampaloc property shall be paid to and collected by Leticia.000.00 Bank of America Checking Account $8. United States of America (USA) where they eventually acquired American citizenship. The California court granted the divorce on 24 June 2005 and judgment was duly entered on 29 June 2005.000 2000 Nissan Frontier 4x4 pickup truck $13. sometime in September 2003. annuities $56.742 sq.000. who was born on 4 November 1990 and JenaT. which is equivalent to half of the amount of the redemption price of the Sampaloc property. Dipaculao.00 Retirement. namely: Jerome T.5 David was able to collect P1. Noveras. California.00 (unpaid debt of $285. They then begot two children. The parties herein secured a loan from a bank and mortgaged the property. David abandoned his family and lived with Estrellita Martinez in Aurora province. 2) that David shall return and pay to Leticia P750. born on 2 May 1993.5 Million for the redemption of the same.693. Noveras (David) and Leticia T. In December 2002. leaving an unpaid balance of P410. Sampaloc.2 Million.000. Leticia claimed that David agreed toand executed a Joint Affidavit with Leticia in the presence of David’s father.000 Jewelries (ring and watch) $9.

Whether or not the attorney’s feesand litigation expenses of the parties were chargeable against their conjugal properties. be liquidated and that all expenses of liquidation. 4. She prayed for: 1) the power to administer all conjugal properties in the Philippines. Noveras only. Aurora simplified the issues as follow: 1.A. shall be remitted to them annually by the petitioner within the first half of January of each year. Whether or not respondent David A. U.a. One-half of the properties in the United States of America awarded to petitioner Leticia Noveras a.S. County of San Mateo. She relied on the 3 December 2003 Joint Affidavit and David’s failure to comply with his obligation under the same.8 In his Answer. 3.California court granted to Leticia the custody of her two children. if any. her two minor children with respondent David A. and the same can be included in the judicial separation prayed for. 2) David and his partner to cease and desist from selling the subject conjugal properties. 2.k. including interests and charges. the RTC rendered judgment as follows: 1.00 litigation expenses. Whether or not Leticia T. 3) the declaration that all conjugal properties be forfeited in favor of her children. The net assets of the absolute community of property ofthe parties in the Philippines are hereby ordered to be awarded to respondent David A. Whether or not the "Joint Affidavit" x x x executed by petitioner Leticia T.00 and P100. One-half of the properties awarded to respondent David A. starting January 2008.9 The RTC of Baler.10 On 8 December 2006. 4) David to remit half of the purchase price as share of Leticia from the sale of the Sampaloc property. 5. 2005. United States of America.000. How the absolute community properties should be distributed. County of San Mateo. Noveras as their presumptive legitimes and said legitimes must be annotated on the titles/documents covering the said properties. Noveras isentitled to reimbursement of onehalf of the P2. Noveras in the preceding paragraph are hereby given to Jerome and Jena. Manila and one-half of the P1. David stated that a judgment for the dissolution of their marriage was entered on 29 June 2005 by the Superior Court of California. Leticia Tacbiana in paragraph 2 are hereby given to Jerome and Jena. dissolving the marriage of the parties as of June 24. Noveras and respondent David A. Their share in the income from these properties. Corollary to the aboveis the issue of: Whether or not the two common children of the parties are entitled to support and presumptive legitimes.5 [M]illion used to redeem the property of Atty. The absolute community of property of the parties is hereby declared DISSOLVED. 4.000. his two minor children with petitioner LeticiaNoveras a. including attorney’s fees of both parties be charged against the conjugal partnership. Leticia Tacbiana as their presumptive legitimes and said legitimes must be annotated on the titles covering the said properties. Noveras committed acts of abandonment and marital infidelity which can result intothe forfeiture of the parties’ properties in favor of the petitioner and their two (2) children.Their share in the income from these properties shall be remitted to them annually by the respondent within the first half of January of each year. Isaias Noveras.a. Noveras will amount to a waiver or forfeiture of the latter’s property rights over their conjugal properties.7 On 8 August 2005. and 5) the payment ofP50. Leticia Tacbiana pursuant to the divorce decree issuedby the Superior Court of California. Aurora. Leticia filed a petition for Judicial Separation of Conjugal Property before the RTC of Baler. 6. .a. starting January 2008. The titles presently covering said properties shall be cancelled and new titles be issued in the name of the party to whom said properties are awarded. He demanded that the conjugal partnership properties. Whether or not the Court has jurisdiction over the properties in California.k. with the properties in the United States of America remaining in the sole ownership of petitioner Leticia Noveras a. 2. 3. which also include the USA properties. as well as all the couple’s properties in the USA.k.2 [M]illion sales proceeds of their property in Sampaloc.

Relying still on the principle of equity. The share of the respondent may be paid to him directly but the share of the two children shall be deposited with a local bank in Baler. Noveras.00 to respondent David A.000.00 as monthly allowance in addition to their income from their presumptive legitimes. education and other needs while they are in her custody in the USA. in a joint account tobe taken out in their names.000.00. the absolute community properties cannot beforfeited in favor of Leticia and her children.k. Jerome and Jena. the parties are divorced by virtue of the decree of dissolution of their marriage issued by the Superior Court of California. the laws that cover their legal and personalstatus are those of the USA. the parties’ marriage had already been dissolved. the trial court observed that Leticia failed to prove abandonment and infidelity with preponderant evidence. The litigation expenses and attorney’s fees incurred by the parties shall be shouldered by them individually. instead of an action for judicial separation of conjugal property. starting 2008. 4 and 6 of the assailedDecision dated December 8. in Civil Case No. County of San Mateo on 24June 2005. One-half of the properties awarded to petitioner Leticia Tacbiana (sic) in paragraph 2 shall pertain to her minor children. Then. the trial court ruled that in accordance with the doctrine of processual presumption. With respect to their marriage. support and custody of the children. 828 are hereby MODIFIED to read as follows: 2. 6. Jerome and Jena. with the passbook of the joint account to be submitted to the custody of the Clerk of Court of this Court within the same period. The trial court held that as the instant petition does not fall under the provisions of the law for the grant of judicial separation of properties. the instant appeal is PARTLY GRANTED. RTC of Baler. Such payment/deposit shall be made withinthe period of thirty (30) days after receipt of a copy of this Decision. Moreover. Philippine law should apply because the court cannot take judicial notice of the US law since the parties did not submit any proof of their national law. Numbers 2. The monthly allowance due from the respondent shall be increased in the future as the needs of the children require and his financial capacity can afford. the trial court first classified their property regime as absolute community of property because they did not execute any marriage settlement before the solemnization of their marriage pursuant to Article 75 of the Family Code. xxx 4. On appeal. The net assets of the absolute community of property of the parties in the Philippines are hereby divided equally between petitioner Leticia Noveras a. the trial court considered the petition filed by Leticia as one for liquidation of the absolute community of property regime with the determination of the legitimes. and 7. respondent David A. 2006 of Branch 96. Aurora Province. The trial court however ruled that Leticia is not entitled to the reimbursements she is praying for considering that she already acquired all of the properties in the USA. withdrawal from which shall only be made by them or by their representative duly authorized with a Special Power of Attorney. if any. For the support of their two (2) minor children.00 to the two children. Under their law. the waiver or renunciation made by David of his property rights in the Joint Affidavit is void. Noveras and P405. .000. Said passbook can be withdrawn from the Clerk of Court only by the children or their attorney-in-fact. Leticia Tacbiana (sic) and respondent David A. subject to the payment of the children’s presumptive legitimes. while petitioner Leticia Tacbiana shall take care of their food. Their share in the income therefrom.000. thus: WHEREFORE. the appellate court ordered both spouses to each pay their children the amount of P520.11 The trial court recognized that since the parties are US citizens. Noveras shall give them US$100. the Court of Appeals modified the trial court’s Decision by directing the equal division of the Philippine properties between the spouses. With respect to their property relations.a. as their presumptive legitimes which shall be annotated on the titles/documents covering the said properties. The trial court held that under Article 89 of the Family Code.5. shall be remitted to them by petitioner annually within the first half of January. the Paringit Spouses are hereby ordered to pay P5. the Court also adjudicated the Philippine properties to David. Aurora. Of the unpaid amount of P410. Moreover with respect to the common children’s presumptive legitime. clothing.00 on the purchase price of the Sampaloc property. Thus.

Vibal Building. Aurora. Quezon City.000. the record of public documents of a sovereign authority or tribunal may be proved by: (1) an official publication thereof or (2) a copy attested by the officer having the legal custody thereof. Such official publication or copy must beaccompanied. . if the record is not kept in the Philippines. and must be under the official seal of the attesting officer. David insists that the Court of Appeals should have recognized the California Judgment which awarded the Philippine properties to him because said judgment was part of the pleading presented and offered in evidence before the trial court.00 to their two children. The payment/deposit shall be made within a period of thirty (30) days from receipt ofa copy of this Decision and the corresponding passbook entrusted to the custody ofthe Clerk of Court a quowithin the same period. which shall read as follows: 8.13 we stated that: The starting point in any recognition of a foreign divorce judgment is the acknowledgment that our courts do not take judicial notice of foreign judgments and laws. Aurora. Leticiafiled a petition for judicial separation ofconjugal properties. The attestation must state. The recognition may be made in an action instituted specifically for the purpose or in another action where a party invokes the foreign decree as an integral aspect of his claim or defense. Sections 24 and 25. as a rule. With respect to their properties in the Philippines. in relation to Rule 39. a copy of the foreign judgment may be admitted in evidence and proven as a fact under Rule 132. and to the children. National Statistics Office. Leticia obtained a decree of divorce from the Superior Court of The requirements of presenting the foreign divorce decree and the national law of the foreigner must comply with our Rules of Evidence. the Office of the Registry of Deeds for the Province of Aurora. At the outset. or a specific part thereof. California in June 2005 wherein the court awarded all the properties in the USA to Leticia.14 The last paragraph shall read as follows: Send a copy of this Decision to the local civil registry of Baler. that the copy is a correct copy of the original. the basic facts are: David and Leticia are US citizens who own properties in the USA and in the Philippines. the Civil RegistrarGeneral. and authenticated by the seal of his office. which shall be deposited to a local bank of Baler. as their presumptive legitimes from the sale of the Sampaloc property inclusive of the receivables therefrom.12 In the present petition.xxx 6. for Philippine courts to recognize a foreign judgment relating to the status of a marriage. In summary and review. Tomas. Noveras and petitioner Leticia Tacbiana (sic) are each ordered to pay the amount ofP520. together with the alien’s applicable national law to show the effect of the judgment on the alien himself or herself. Respondent David A. withdrawable only by the children or their attorney-in-fact. asthe case may be.040. In Corpuz v. Specifically. A number 8 is hereby added. Noveras is hereby ordered to pay petitioner Leticia Tacbiana (sic) the amount of P1. David argues that allowing Leticia to share in the Philippine properties is tantamount to unjust enrichment in favor of Leticia considering that the latter was already granted all US properties by the California court. in substance. Respondent David A.00 representing her share in the proceeds from the sale of the Sampaloc property. Sto. The rest of the Decision is AFFIRMED. under a joint account in the latter’s names. Justice Herrera explained that." This means that the foreign judgment and its authenticity must beproven as facts under our rules on evidence. the trial court erred in recognizing the divorce decree which severed the bond of marriage between the parties.15 Under Section 24 of Rule 132. Jerome Noveras and Jena Noveras. Jerome and Jena. "no sovereign is bound to give effect within its dominion to a judgment rendered by a tribunal of another country. The certificate may be issued by any of the authorized Philippine embassy or consular officials stationed in the foreign country in which the record is kept. Section 48(b) of the Rules of Court. Times Street corner EDSA.000. with a certificate that the attesting officer has the legal custody thereof. the local civil registry of Quezon City.

Section 25 of the same Rule states that whenever a copy of a document or record is attested for the purpose of evidence. and (6) That at the time of the petition.67. as she even went several times to visit him there after the alleged abandonment. the attestation must state. In the cases provided for in Numbers (1). As a general rule. the spouses have been separated in fact for at least one year and reconciliation is highly improbable. (4) That the spouse of the petitioner has abandoned the latter or failed to comply with his or her obligations to the family as provided for in Article 101. The required certificates to prove its authenticity. only the divorce decree was presented in evidence. (5) That the spouse granted the power of administration in the marriage settlements has abused that power. The trial court ratiocinated: Moreover. or if hebe the clerk of a court having a seal. Any of the following shall be considered sufficient cause for judicial separation of property: (1) That the spouse of the petitioner has been sentenced to a penalty which carries with it civil interdiction. if there be any. Also. It may be noted that in Bayot v. as here. it follows that the parties are still legally married in the Philippines. to wit: Art. it appears that there is no seal from the office where the divorce decree was obtained. In the instant case. divorce is not recognized between Filipino citizens in the Philippines. (Emphasis supplied).16 we relaxed the requirement on certification where we held that "[petitioner therein] was clearly an American citizenwhen she secured the divorce and that divorce is recognized and allowed in any of the States of the Union. must be for a valid cause and the spouse is deemed to have abandoned the other when he/she has left the conjugal dwelling without intention of returning. any modification in the marriage settlements must be made before the celebration of marriage. An exception to this rule is allowed provided that the modification isjudicially approved and refers only to the instances provided in Articles 66.18 Leticia anchored the filing of the instant petition for judicial separation of property on paragraphs 4 and 6 of Article 135 of the Family Code. that the copy is a correct copy of the original. The attestation must be under the official seal of the attesting officer. 135 and 136 of the Family Code. sufficient. and (3). (2). or a specific part thereof. (2) That the spouse of the petitioner has been judicially declared an absentee. Philippines. the presentation of the final judgment against the guiltyor absent spouse shall be enough basis for the grant of the decree ofjudicial separation of property. under the seal of such court. The trial court thus erred in proceeding directly to liquidation. The trial court had categorically ruled that there was no abandonment in this case to necessitate judicial separation of properties under paragraph 4 of Article 135 of the Family Code. Absent a valid recognition of the divorce decree. as the case may be. under Article 101 of the Family Code quoted above." In this case however. 128. Based on the records. The intention of not returning is prima facie presumed if the allegedly [sic] abandoning spouse failed to give any information as to his or her whereabouts within the period of three months from such abandonment. Even if we apply the doctrine of processual presumption17 as the lower courts did with respect to the property regime of the parties. to begin with. The last visit of said respondent was in October 2004 when he and the petitioner discussed the filing by the latter of a petition for dissolution of marriage with the . in substance. (3) That loss of parental authority ofthe spouse of petitioner has been decreed by the court. as well as the pertinent California law on divorce were not presented. the recognition of divorce is entirely a different matter because. 135. the petitioner knows that the respondent has returned to and stayed at his hometown in Maria Aurora. Court of Appeals. abandonment. the respondent has been going back to the USA to visit her and their children until the relations between them worsened. the presentation of a copy of foreign divorce decree duly authenticatedby the foreign court issuing said decree is.

thus: Art. testified that she saw the name of Estrellita listed as the wife of David in the Consent for Operation form. (3) Whatever remains of the exclusive properties of the spouses shall thereafter be delivered to each of them. in the partition of the properties. (Emphasis supplied). in accordance with Article 51. Instead. the court shall decide. (1) An inventory shall be prepared. Children below the age of seven years are deemed to have chosen the mother.19 Under Article 102 of the same Code. as stated in the 4th paragraph of Article 99 ofthe Family Code. The grant of the judicial separation of the absolute community property automatically dissolves the absolute community regime. we shall adopt the . (5) The presumptive legitimes of the common children shall be delivered upon partition. Leticia heard from her friends that David has been cohabiting with Estrellita Martinez. Having established that Leticia and David had actually separated for at least one year. Such turn for the worse of their relationship and the filing of the saidpetition can also be considered as valid causes for the respondent to stay in the Philippines. taking into consideration the best interests of said children. No. liquidation follows the dissolution of the absolute community regime and the following procedure should apply: Separation in fact for one year as a ground to grant a judicial separation of property was not tackled in the trial court’s decision because. listing separately all the properties of the absolute community and the exclusive properties of each spouse. unless the court has decided otherwise. they had filed for divorce and it was granted by the California court in June 2005. Second. (2) and 63. who worked in the hospital where David was once confined. (2). No. In case there is no such majority.California court. The absolute community terminates: (1) Upon the death of either spouse.the said profits shall be the increase in value between the market value of the community property at the time of the celebration of the marriage and the market value at the time of its dissolution. it is undisputed that the spouses had been living separately since 2003 when David decided to go back to the Philippines to set up his own business. (2) The debts and obligations of the absolute community shall be paid out of its assets. the trial court erroneously treated the petition as liquidation of the absolute community of properties. Editha Apolonio. the spouses shall be solidarily liable for the unpaid balance with their separate properties in accordance with the provisions of the second paragraph of Article 94. (6) Unless otherwise agreed upon by the parties. In case of insufficiency of said assets. who represented herself as Estrellita Noveras. the conjugal dwelling and the lot on which it is situated shall be adjudicated tothe spouse with whom the majority of the common children choose to remain. At the risk of being repetitious. or (4) In case of judicial separation of property during the marriage under Articles 134 to 138. 102. while actual abandonment had not been proven. 99.20 Third and more significantly. we will not remand the case to the trial court. unless a different proportion or division was agreed upon in the marriage settlements. Upon dissolution of the absolute community regime. For purposes of computing the net profits subject to forfeiture in accordance with Articles 43. (2) When there is a decree of legal separation. (3) When the marriage is annulled or declared void. Art. the following procedure shall apply: The records of this case are replete with evidence that Leticia and David had indeed separated for more than a year and that reconciliation is highly improbable. (4) The net remainder of the properties of the absolute community shall constitute its net assets. the petition for judicial separation of absolute community of property should be granted. or unless there has been a voluntary waiver of such share provided in this Code. which shall be divided equally between husband and wife. First.

A. as well as the payment of their children’s presumptive legitimes. Likewise. SO ORDERED .000. absent a clear showing where their contributions came from. Thus. The assailed Decision of the Court of Appeals in CA G. We affirm the modification madeby the Court of Appeals with respect to the share of the spouses in the absolutecommunity properties in the Philippines. 7166 duly received by the Commission on Elections. may be charged thereto.00 as their presumptive legitimes therefrom. "(t)he legitime of legitimate children and descendants consists of one-half or the hereditary estate of the father and of the mother. David's allegation that he used part of the proceeds from the sale of the Sampaloc property for the benefit of the absolute community cannot be given full credence. Indeed.000.00 when he ran as municipal councilor cannot be allowed in the absence of receipts or at least the Statement of Contributions and Expenditures required under Section 14 of Republic Act No. In sum. xxxx Under the first paragraph of Article 888 of the Civil Code. Leticia is not entitled to reimbursement of half of the redemption money. Only the amount of P120.040.000. 88686 is AFFIRMED. Election expenses in the amount of P300.modifications made by the Court of Appeals on the trial court’s Decision with respect to liquidation. expenses incurred to settle the criminal case of his personal driver is not deductible as the same had not benefited the family.00 or in the respective amounts of P1.000. Paringit in the amount of P410. the same is presumed to have come from the community property. Consequently.S.000.00. Article 16 of the Civil Code clearly states that real property as well as personal property is subject to the law of the country where it is situated. David and Leticia should each pay them the amount of P520.000." The children arc therefore entitled to half of the share of each spouse in the net assets of the absolute community. Leticia and David shall share equally in the proceeds of the sale net of the amount of P120. as well as to their respective shares in the net proceeds from the sale of the Sampaloc property including the receivables from Sps.1âwphi1 While both claimed to have contributed to the redemption of the Noveras property. CV No. the petition is DENIED.00. liquidation shall only be limited to the Philippine properties. which the appellate court explained in this wise: Leticia and David shall likewise have an equal share in the proceeds of the Sampaloc property. Thus.21 WHEREFORE. which shall be annotated on the titles/documents covering the same.R. We agree with the appellate court that the Philippine courts did not acquire jurisdiction over the California properties of David and Leticia.00 incurred in going to and from the U.