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MUNOZ JR.

V CARLOS
We resolve the present petition for review on certiorari[1] filed by petitioner
Francisco Muoz, Jr. (petitioner) to challenge the decision[2] and the resolution[3] of the
Court of Appeals (CA) in CA-G.R. CV No. 57126.[4] The CA decision set aside the
decision[5] of the Regional Trial Court (RTC), Branch 166, Pasig City, in Civil Case No.
63665. The CA resolution denied the petitioners subsequent motion for
reconsideration.
FACTUAL BACKGROUND
The facts of the case, gathered from the records, are briefly summarized
below.
Subject of the present case is a seventy-seven (77)-square meter
residential house and lot located at 170 A. Bonifacio Street, Mandaluyong City (subject
property), covered by Transfer Certificate of Title (TCT) No. 7650 of the Registry of
Deeds of Mandaluyong City in the name of the petitioner.[6]
The residential lot in the subject property was previously covered by TCT
No. 1427, in the name of Erlinda Ramirez, married to Eliseo Carlos (respondents).[7]
On April 6, 1989, Eliseo, a Bureau of Internal Revenue employee,
mortgaged TCT No. 1427, with Erlindas consent, to the Government Service
Insurance System (GSIS) to secure a P136,500.00 housing loan, payable within
twenty (20) years, through monthly salary deductions of P1,687.66.[8] The respondents
then constructed a thirty-six (36)-square meter, two-story residential house on the lot.
On July 14, 1993, the title to the subject property was transferred to the
petitioner by virtue of a Deed of Absolute Sale, dated April 30, 1992, executed by
Erlinda, for herself and as attorney-in-fact of Eliseo, for a stated consideration
ofP602,000.00.[9]
On September 24, 1993, the respondents filed a complaint with the RTC
for the nullification of the deed of absolute sale, claiming that there was no sale but
only a mortgage transaction, and the documents transferring the title to the petitioners
name were falsified.

Erlindas parents; it was the subject of Civil Case No. 50141, a complaint for annulment
of sale, before the RTC, Branch 158, Pasig City, filed by the surviving heirs of Pedro
ampagreement, Amado agreed to transfer to the other compulsory heirs of Pedro,
including Erlinda, their rightful shares of the land.[21]
THE RTC RULING
In a Decision dated January 23, 1997, the RTC dismissed the complaint. It
found that the subject property was Erlindas exclusive paraphernal property that was
inherited from her father. It also upheld the sale to the petitioner, even without Eliseos
consent as the deed of absolute sale bore the genuine signatures of Erlinda and the
petitioner as vendor and vendee, respectively. It concluded that the NBI finding that
Eliseos signatures in the special power of attorney and in the affidavit were forgeries
was immaterial because Eliseos consent to the sale was not necessary.[22]
The respondents elevated the case to the CA via an ordinary appeal
under Rule 41 of the Revised Rules of Court.
THE CA RULING
The CA decided the appeal on June 25, 2002. Applying the second
paragraph of Article 158 [23] of the Civil Code and Calimlim-Canullas v. Hon. Fortun,
[24]
the CA held that the subject property, originally Erlindas exclusive paraphernal
property, became conjugal property when it was used as collateral for a housing loan
that was paid through conjugal funds Eliseos monthly salary deductions; the subject
property, therefore, cannot be validly sold or mortgaged without Eliseos consent,
pursuant to Article 124[25] of the Family Code. Thus, the CA declared void the deed of
absolute sale, and set aside the RTC decision.
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.
THE PETITION

The respondents alleged that in April 1992, the petitioner granted them
a P600,000.00 loan, to be secured by a first mortgage on TCT No. 1427; the petitioner
gave Erlinda a P200,000.00[10] advance to cancel the GSIS mortgage, and made her
sign a document purporting to be the mortgage contract; the petitioner promised to
give the P402,000.00 balance when Erlinda surrenders TCT No. 1427 with the GSIS
mortgage cancelled, and submits an affidavit signed by Eliseo stating that he waives
all his rights to the subject property; with the P200,000.00 advance, Erlinda paid
GSIS P176,445.27[11] to cancel the GSIS mortgage on TCT No. 1427;[12] in May 1992,
Erlinda surrendered to the petitioner the clean TCT No. 1427, but returned Eliseos
affidavit, unsigned; since Eliseos affidavit was unsigned, the petitioner refused to give
the P402,000.00 balance and to cancel the mortgage, and demanded that Erlinda
return the P200,000.00 advance; since Erlinda could not return theP200,000.00
advance because it had been used to pay the GSIS loan, the petitioner kept the title;
and in 1993, they discovered that TCT No. 7650 had been issued in the petitioners
name, cancelling TCT No.1427 in their name.

The petitioner 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. 1427; Article 120 [29] of the Family Code is the
applicable rule, and since the value of the house is less than the value of the lot, then
Erlinda retained ownership of the subject property. He also argues that the contract
between the parties was a sale, not a mortgage, because (a) Erlinda did not deny her
signature in the document;[30] (b) Erlinda agreed to sign a contract of lease over the
subject property;[31] and, (c) Erlinda executed a letter, dated April 30, 1992, confirming
the conversion of the loan application to a deed of sale.[32]

The petitioner countered that there was a valid contract of sale. He


alleged that the respondents sold the subject property to him after he refused their
offer to mortgage the subject property because they lacked paying capacity and were
unwilling to pay the incidental charges; the sale was with the implied promise to
repurchase within one year,[13] during which period (from May 1, 1992 to April 30,
1993), the respondents would lease the subject property for a monthly rental
of P500.00;[14]when the respondents failed to repurchase the subject property within
the one-year period despite notice, he caused the transfer of title in his name on July
14, 1993;[15] when the respondents failed to pay the monthly rentals despite demand,
he filed an ejectment case [16] against them with the Metropolitan Trial Court (MeTC),
Branch 60, Mandaluyong City, on September 8, 1993, or sixteen days before the filing
of the RTC case for annulment of the deed of absolute sale.

The respondents submit that it is unnecessary to compare the respective


values of the house and of the lot to determine ownership of the subject property; it
was acquired during their marriage and, therefore, considered conjugal property. They
also submit that the transaction between the parties was not a sale, but an equitable
mortgage because (a) they remained in possession of the subject property even after
the execution of the deed of absolute sale, (b) they paid the 1993 real property taxes
due on the subject property, and (c) they received P200,000.00 only of the total stated
price of P602,000.00.

During the pendency of the RTC case, or on March 29, 1995, the MeTC
decided the ejectment case. It ordered Erlinda and her family to vacate the subject
property, to surrender its possession to the petitioner, and to pay the overdue rentals.
[17]

THE CASE FOR THE RESPONDENTS

THE ISSUE
The issues in the present case boil down to (1) whether the subject
property is paraphernal or conjugal; and, (2) whether the contract between the parties
was a sale or an equitable mortgage.
OUR RULING
We deny the present Petition but for reasons other than those
advanced by the CA.

In the RTC, 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, 1992 and the Affidavit of
waiver of rights dated April 29, 1992,[20] showing that they were forgeries.

This Court is not a trier of facts. However, if the inference, drawn by the
CA, from the facts is manifestly mistaken, as in the present case, we can review the
evidence to allow us to arrive at the correct factual conclusions based on the record.[33]

The petitioner, on the other hand, introduced evidence on the paraphernal


nature of the subject property since it was registered in Erlindas name; the residential
lot was part of a large parcel of land owned by Pedro Ramirez and Fructuosa Urcla,

First Issue:

Paraphernal or Conjugal?

Second Issue:

As a general rule, all property acquired during the marriage, whether the acquisition
appears to have been made, contracted or registered in the name of one or both
spouses, is presumed to be conjugal unless the contrary is proved.[34]

Sale or Equitable Mortgage?

In the present case, clear evidence that Erlinda inherited the residential lot
from her father has sufficiently rebutted this presumption of conjugal ownership.
[35]
Pursuant to Articles 92[36] and 109[37] of the Family Code, properties acquired by
gratuitous title by either spouse, during the marriage, shall be excluded from the
community property and be the exclusive property of each spouse. [38] The residential
lot, therefore, is Erlindas exclusive paraphernal property.
The CA, however, held that the residential lot became conjugal when the
house was built thereon through conjugal funds, applying the second paragraph
of Article 158 of the Civil Code and Calimlim-Canullas.[39] Under the second paragraph
of Article 158 of the Civil Code, a land that originally belonged to one spouse becomes
conjugal upon the construction of improvements thereon at the expense of the
partnership. We applied this provision in Calimlim-Canullas,[40] where we held that
when the conjugal house is constructed on land belonging exclusively to the husband,
the land ipso facto becomes conjugal, but the husband is entitled to reimbursement of
the value of the land at the liquidation of the conjugal partnership.
The CA misapplied Article 158 of the
Civil Code and Calimlim-Canullas
We cannot subscribe to the CAs misplaced reliance on Article 158 of the
Civil Code and Calimlim-Canullas.
As the respondents were married during the effectivity of the Civil Code,
its provisions on conjugal partnership of gains (Articles 142 to 189) should have
governed their property relations. However, with the enactment of the Family Code on
August 3, 1989, the Civil Code provisions on conjugal partnership of gains, including
Article 158, have been superseded by those found in the Family Code (Articles 105 to
133). Article 105 of the Family Code states:

Jurisprudence has defined an equitable mortgage "as one which although


lacking in some formality, or form or words, or other requisites demanded by a statute,
nevertheless reveals the intention of the parties to charge real property as security for
a debt, there being no impossibility nor anything contrary to law in this intent."[46]
Article 1602 of the Civil Code enumerates the instances when a contract,
regardless of its nomenclature, may be presumed to be an equitable mortgage: (a)
when the price of a sale with right to repurchase is unusually inadequate; (b) when the
vendor remains in possession as lessee or otherwise; (c) when upon or after the
expiration of the right to repurchase another instrument extending the period of
redemption or granting a new period is executed; (d) when the purchaser retains for
himself a part of the purchase price; (e) when the vendor binds himself to pay
the taxes on the thing sold; and, (f) in any other case where it may be fairly
inferred that the real intention of the parties is that the transaction shall secure
the payment of a debt or the performance of any other obligation. These
instances apply to a contract purporting to be an absolute sale.[47]
For the presumption of an equitable mortgage to arise under Article 1602
of the Civil Code, two (2) requisites must concur: (a) that the parties entered into a
contract denominated as a contract of sale; and, (b) that their intention was to secure
an existing debt by way of a mortgage. Any of the circumstances laid out in Article
1602 of the Civil Code, not the concurrence nor an overwhelming number of the
enumerated circumstances, is sufficient to support the conclusion that a contract of
sale is in fact an equitable mortgage.[48]

Contract is an equitable mortgage


In the present case, there are four (4) telling circumstances pointing to the
existence of an equitable mortgage.

xxxx
The provisions of this Chapter [on the Conjugal
Partnership of Gains] shall also apply to conjugal
partnerships of gains already established between
spouses before the effectivity of this Code, without
prejudice to vested rights already acquired in accordance with
the Civil Code or other laws, as provided in Article 256.
Thus, in determining the nature of the subject property, we refer to the provisions of
the Family Code, and not the Civil Code, except with respect to rights then already
vested.
Article 120 of the Family Code, which supersedes Article 158 of the Civil
Code, provides the solution in determining the ownership of the improvements that are
made on the separate property of the spouses, at the expense of the partnership or
through the acts or efforts of either or both spouses. Under this provision, when the
cost of the improvement and any resulting increase in value are more than the value of
the property at the time of the improvement, the entire property of one of the spouses
shall belong to the conjugal partnership, subject to reimbursement of the value of the
property of the owner-spouse at the time of the improvement; otherwise, said property
shall be retained in ownership by the owner-spouse, likewise subject to reimbursement
of the cost of the improvement.[41]
In the present case, we find that Eliseo paid a portion only of the GSIS
loan through monthly salary deductions. From April 6, 1989[42] to April 30, 1992,
[43]
Eliseo paid about P60,755.76,[44] not the entire amount of the GSIS housing loan
plus interest, since the petitioner advanced the P176,445.27[45] paid by Erlinda to
cancel the mortgage in 1992. Considering the P136,500.00 amount of the GSIS
housing loan, it is fairly reasonable to assume that the value of the residential lot is
considerably more than the P60,755.76 amount paid by Eliseo through monthly salary
deductions.
Thus, the subject property remained the exclusive paraphernal property of
Erlinda at the time she contracted with the petitioner; the written consent of Eliseo to
the transaction was not necessary. The NBI finding that Eliseos signatures in the
special power of attorney and affidavit were forgeries was immaterial.
Nonetheless, the RTC and the CA apparently failed to consider the real
nature of the contract between the parties.

First, the respondents remained in possession as lessees of the subject


property; the parties, in fact, executed a one-year contract of lease, effective May 1,
1992 to April 30, 1993.[49]
Second, the petitioner retained part of the purchase price, the petitioner
gave a P200,000.00 advance to settle the GSIS housing loan, but refused to give
the P402,000.00 balance when Erlinda failed to submit Eliseos signed affidavit of
waiver of rights.
Third, respondents paid the real property taxes on July 8, 1993, despite
the alleged sale on April 30, 1992;[50] payment of real property taxes is a usual burden
attaching to ownership and when, as here, such payment is coupled with continuous
possession of the property, it constitutes evidence of great weight that the person
under whose name the realty taxes were declared has a valid and rightful claim over
the land.[51]
Fourth, Erlinda secured the payment of the principal debt owed to the
petitioner with the subject property. The records show that the petitioner, in fact, sent
Erlinda a Statement of Account showing that as of February 20, 1993, she
owedP384,660.00, and the daily interest, starting February 21, 1993, was P641.10.
[52]
Thus, the parties clearly intended an equitable mortgage and not a contract of sale.
That the petitioner advanced the sum of P200,000.00 to Erlinda is
undisputed. This advance, in fact, prompted the latter to transfer the subject property
to the petitioner. Thus, before the respondents can recover the subject property, they
must first return the amount of P200,000.00 to the petitioner, plus legal interest of 12%
per annum, computed from April 30, 1992.
We cannot sustain the ballooned obligation of P384,660.00, claimed in the
Statement of Account sent by the petitioner, [53] sans any evidence of how this amount
was arrived at. Additionally, a daily interest of P641.10 or P19,233.00 per month for
a P200,000.00 loan is patently unconscionable. While parties are free to stipulate on
the interest to be imposed on monetary obligations, we can step in to temper the
interest rates if they are unconscionable.[54]
In Lustan v. CA,[55] where we established the reciprocal obligations of the
parties under an equitable mortgage, we ordered the reconveyance of the property to
the rightful owner therein upon the payment of the loan within ninety (90) days from
the finality of the decision.[56]

WHEREFORE, in light of all the foregoing, we hereby DENY the present


petition. The assailed decision and resolution of the Court of Appeals in CA-G.R. CV
No. 57126 are AFFIRMED with the following MODIFICATIONS:
1. The Deed of Absolute Sale dated April 30, 1992 is hereby declared an
equitable mortgage; and
2. The petitioner is obligated to RECONVEY to the respondents the
property covered by Transfer Certificate of Title No. 7650 of the Register of Deeds of
Mandaluyong City, UPON THE PAYMENT OF P200,000.00, with 12% legal interest
from April 30, 1992, by respondents within NINETY DAYS FROM THE FINALITY OF
THIS DECISION.
Costs against the petitioner.
SO ORDERED.

PANA V HEIRS OF JUANITE


DECISION
ABAD, J.:
This case is about the propriety of levy and execution on conjugal properties where
one of the spouses has been found guilty of a crime and ordered to pay civil
indemnities to the victims' heirs.
The Facts and the Case
The prosecution accused petitioner Efren Pana (Efren), his wife Melecia, and others of
murder before the. Regional Trial Court (RTC) of Surigao City in Criminal Cases 4232
and 4233.1
On July 9, 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. The RTC ordered those found
guilty to pay each of the heirs of the victims, jointly and severally, P50,000.00 as civil
indemnity, P50,000.00 each as moral damages, and P150,000.00 actual damages.
On appeal to this Court, it affirmed on May 24, 2001 the conviction of both accused but
modified the penalty toreclusion perpetua. With respect to the monetary awards, the
Court also affirmed the award of civil indemnity and moral damages but deleted the
award for actual damages for lack of evidentiary basis. In its place, however, the Court
made an award of P15,000.00 each by way of temperate damages. In addition, the
Court awarded P50,000.00 exemplary damages per victim to be paid solidarily by
them.3 The decision became final and executory on October 1, 2001.4
Upon motion for execution by the heirs of the deceased, on March 12, 2002 the RTC
ordered the issuance of the writ,5 resulting in the levy of real properties registered in
the names of Efren and Melecia.6 Subsequently, a notice of levy7 and a notice of sale
on execution8 were issued.
On April 3, 2002, petitioner Efren and his wife Melecia filed a motion to quash the writ
of execution, claiming that the levied properties were conjugal assets, not paraphernal
assets of Melecia.9 On September 16, 2002 the RTC denied the motion.10 The
spouses moved for reconsideration but the RTC denied the same on March 6, 2003.11
Claiming that the RTC gravely abused its discretion in issuing the challenged orders,
Efren filed a petition forcertiorari before the Court of Appeals (CA). On January 29,
2004 the CA dismissed the petition for failure to sufficiently show that the RTC gravely
abused its discretion in issuing its assailed orders.12 It also denied Efrens motion for
reconsideration,13 prompting him to file the present petition for review on certiorari.
The Issue Presented
The sole issue presented in this case is whether or not the CA erred in holding that the
conjugal properties of spouses Efren and Melecia can be levied and executed upon for
the satisfaction of Melecias civil liability in the murder case.
Ruling of the Court
To determine whether the obligation of the wife arising from her criminal liability is
chargeable against the properties of the marriage, the Court has first to identify the
spouses property relations.
Efren claims that his marriage with Melecia falls under the regime of conjugal
partnership of gains, given that they were married prior to the enactment of the Family
Code and that they did not execute any prenuptial agreement.14Although the heirs of
the deceased victims do not dispute that it was the Civil Code, not the Family Code,
which governed the marriage, they insist that it was the system of absolute community
of property that applied to Efren and Melecia. The reasoning goes:
Admittedly, the spouses were married before the effectivity of the Family Code. But
that fact does not prevent the application of [A]rt. 94, last paragraph, of the Family
Code because their property regime is precisely governed by the law on absolute
community. This finds support in Art. 256 of the Family Code which states:
"This code shall have retroactive effect in so far as it does not prejudice or impair
vested or acquired rights in accordance with the Civil Code or other laws."

None of the spouses is dead. Therefore, no vested rights have been acquired by each
over the properties of the community. Hence, the liabilities imposed on the accusedspouse may properly be charged against the community as heretofore discussed.15
The RTC applied the same reasoning as above.16 Efren and Melecias property
relation was admittedly conjugal under the Civil Code but, since the transitory
provision of the Family Code gave its provisions retroactive effect if no vested or
acquired rights are impaired, that property relation between the couple was changed
when the Family Code took effect in 1988. The latter code now prescribes in Article 75
absolute community of property for all marriages unless the parties entered into a
prenuptial agreement. As it happens, Efren and Melecia had no prenuptial agreement.
The CA agreed with this position.17
Both the RTC and the CA are in error on this point. While it is true that the personal
stakes of each spouse in their conjugal assets are inchoate or unclear prior to the
liquidation of the conjugal partnership of gains and, therefore, none of them can be
said to have acquired vested rights in specific assets, it is evident that Article 256 of
the Family Code does not intend to reach back and automatically convert into absolute
community of property relation all conjugal partnerships of gains that existed before
1988 excepting only those with prenuptial agreements.
The Family Code itself provides in Article 76 that marriage settlements cannot be
modified except prior to marriage.
Art. 76. In order that any modification in the marriage settlements may be valid, it must
be made before the celebration of the marriage, subject to the provisions of Articles
66, 67, 128, 135 and 136.
Clearly, therefore, the conjugal partnership of gains that governed the marriage
between Efren and Melecia who were married prior to 1988 cannot be modified except
before the celebration of that marriage.
Post-marriage modification of such settlements can take place only where: (a) the
absolute community or conjugal partnership was dissolved and liquidated upon a
decree of legal separation;18 (b) the spouses who were legally separated reconciled
and agreed to revive their former property regime;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 the family;20 (d) there was judicial separation of
property under Article 135; (e) the spouses jointly filed a petition for the voluntary
dissolution of their absolute community or conjugal partnership of gains.21 None of
these circumstances exists in the case of Efren and Melecia.
What is more, under the conjugal partnership of gains established by Article 142 of the
Civil Code, the husband and the wife place only the fruits of their separate property
and incomes from their work or industry in the common fund. Thus:
Art. 142. By means of the conjugal partnership of gains the husband and wife place in
a common fund the fruits of their separate property and the income from their work or
industry, and divide equally, upon the dissolution of the marriage or of the partnership,
the net gains or benefits obtained indiscriminately by either spouse during the
marriage.
This means that they continue under such property regime to enjoy rights of ownership
over their separate properties. Consequently, to automatically change the marriage
settlements of couples who got married under the Civil Code into absolute community
of property in 1988 when the Family Code took effect would be to impair their acquired
or vested rights to such separate properties.
The RTC cannot take advantage of the spouses loose admission that absolute
community of property governed their property relation since the record shows that
they had been insistent that their property regime is one of conjugal partnership of
gains.22 No evidence of a prenuptial agreement between them has been presented.
What is clear is that Efren and Melecia were married when the Civil Code was still the
operative law on marriages. The presumption, absent any evidence to the contrary, is
that they were married under the regime of the conjugal partnership of gains. Article
119 of the Civil Code thus provides:
Art. 119. The future spouses may in the marriage settlements agree upon absolute or
relative community of property, or upon complete separation of property, or upon any
other regime. In the absence of marriage settlements, or when the same are void, the
system of relative community or conjugal partnership of gains as established in this
Code, shall govern the property relations between husband and wife.
Of course, the Family Code contains terms governing conjugal partnership of gains
that supersede the terms of the conjugal partnership of gains under the Civil Code.
Article 105 of the Family Code states:
"x x x x
The provisions of this Chapter [on the Conjugal Partnership of Gains] shall also apply
to conjugal partnerships of gains already established between spouses before the
effectivity of this Code, without prejudice to vested rights already acquired in
accordance with the Civil Code or other laws, as provided in Article 256." 23
Consequently, the Court must refer to the Family Code provisions in deciding whether
or not the conjugal properties of Efren and Melecia may be held to answer for the civil
liabilities imposed on Melecia in the murder case. Its Article 122 provides:

Art. 122. The payment of personal debts contracted by the husband or the wife before
or during the marriage shall not be charged to the conjugal properties partnership
except insofar as they redounded to the benefit of the family.
Neither shall the fines and pecuniary indemnities imposed upon them be charged to
the partnership.
However, the payment of personal debts contracted by either spouse before the
marriage, that of fines and indemnities imposed upon them, as well as the support of
illegitimate children of either spouse, may be enforced against the partnership assets
after the responsibilities enumerated in the preceding Article have been covered, if the
spouse who is bound should have no exclusive property or if it should be insufficient;
but at the time of the liquidation of the partnership, such spouse shall be charged for
what has been paid for the purpose above-mentioned.
Since Efren does not dispute the RTCs finding that Melecia has no exclusive property
of her own,24 the above applies. The civil indemnity that the decision in the murder
case imposed on her may be enforced against their conjugal assets after the
responsibilities enumerated in Article 121 of the Family Code have been
covered.25Those responsibilities are as follows:
Art. 121. The conjugal partnership shall be liable for:
(1) The support of the spouse, their common children, and the legitimate
children of either spouse; however, the support of illegitimate children
shall be governed by the provisions of this Code on Support;
(2) All debts and obligations contracted during the marriage by the
designated administrator-spouse for the benefit of the conjugal
partnership of gains, or by both spouses or by one of them with the
consent of the other;
(3) Debts and obligations contracted by either spouse without the consent
of the other to the extent that the family may have benefited;
(4) All taxes, liens, charges, and expenses, including major or minor
repairs upon the conjugal partnership property;
(5) All taxes and expenses for mere preservation made during the
marriage upon the separate property of either spouse;
(6) Expenses to enable either spouse to commence or complete a
professional, vocational, or other activity for self-improvement;
(7) Antenuptial debts of either spouse insofar as they have redounded to
the benefit of the family;
(8) The value of what is donated or promised by both spouses in favor of
their common legitimate children for the exclusive purpose of commencing
or completing a professional or vocational course or other activity for selfimprovement; and
(9) Expenses of litigation between the spouses unless the suit is found to
be groundless.
If the conjugal partnership is insufficient to cover the foregoing liabilities, the spouses
shall be solidarily liable for the unpaid balance with their separate properties.1wphi1
Contrary to Efrens contention, Article 121 above allows payment of the criminal
indemnities imposed on his wife, Melecia, out of the partnership assets even before
these are liquidated. Indeed, it states that such indemnities "may be enforced against
the partnership assets after the responsibilities enumerated in the preceding article
have been covered."[26] No prior liquidation of those assets is required. This is not
altogether unfair since Article 122 states that "at the time of liquidation of the
partnership, such [offending] spouse shall be charged for what has been paid for the
purposes above-mentioned."
WHEREFORE, the Court AFFIRMS with MODIFICATION the Resolutions of the Court
of Appeals in CA-G.R. SP 77198 dated January 29, 2004 and May 14, 2004. The
Regional Trial Court of Surigao City, Branch 30, shall first ascertain that, in enforcing
the writ of execution on the conjugal properties of spouses Efren and Melecia Pana for
the satisfaction of the indemnities imposed by final judgment on the latter accused in
Criminal Cases 4232 and 4233, the responsibilities enumerated in Article 121 of the
Family Code have been covered.
SO ORDERED.

AGUETE V PNB

DECISION
CARPIO, J.:
The Case

G.R. No. 170166 is a petition for review1 assailing the


Decision2 promulgated on 17 October 2005 by the
Court of Appeals (appellate court) in CA-G.R. CV No.
76845. The appellate court granted the appeal filed by
the Philippine National Bank Laoag Branch (PNB).
The appellate court reversed the 29 June 2001
Decision of Branch 15 of the Regional Trial Court of
Laoag City (trial court) in Civil Case No. 7803.
The trial court declared the Deed of Real Estate
Mortgage executed by spouses Jose A. Ros3 (Ros)
and Estrella Aguete (Aguete) (collectively, petitioners),
as well as the subsequent foreclosure proceedings,
void. Aside from payment of attorneys fees, the trial
court also ordered PNB to vacate the subject property
to give way to petitioners possession.
The Facts
The appellate court narrated the facts as follows:
On January 13, 1983, spouses Jose A. Ros and
Estrella Aguete filed a complaint for the annulment of
the Real Estate Mortgage and all legal proceedings
taken thereunder against PNB, Laoag Branch before
the Court of First Instance, Ilocos Norte docketed as
Civil Case No. 7803.
The complaint was later amended and was raffled to
the Regional Trial Court, Branch 15, Laoag City.
The averments in the complaint disclosed that
plaintiff-appellee Joe A. Ros obtained a loan
of P115,000.00 from PNB Laoag Branch on October
14, 1974 and as security for the loan, plaintiffappellee Ros executed a real estate mortgage
involving a parcel of land Lot No. 9161 of the
Cadastral Survey of Laoag, with all the improvements
thereon described under Transfer Certificate of Title
No. T-9646.
Upon maturity, the loan remained outstanding. As a
result, PNB instituted extrajudicial foreclosure
proceedings on the mortgaged property. After the
extrajudicial sale thereof, a Certificate of Sale was
issued in favor of PNB, Laoag as the highest bidder.
After the lapse of one (1) year without the property
being redeemed, the property was consolidated and
registered in the name of PNB, Laoag Branch on
August 10, 1978.
Claiming that she (plaintiff-appellee Estrella Aguete)
has no knowledge of the loan obtained by her
husband nor she consented to the mortgage instituted

on the conjugal property a complaint was filed to


annul the proceedings pertaining to the mortgage,
sale and consolidation of the property interposing
the defense that her signatures affixed on the
documents were forged and that the loan did not
redound to the benefit of the family.
1avvphi1

In its answer, PNB prays for the dismissal of the


complaint for lack of cause of action, and insists that it
was plaintiffs-appellees own acts [of]
omission/connivance that bar them from recovering
the subject property on the ground of estoppel,
laches, abandonment and prescription.4]
The Trial Courts Ruling
On 29 June 2001, the trial court rendered its
Decision5 in favor of petitioners. The trial court
declared that Aguete did not sign the loan documents,
did not appear before the Notary Public to
acknowledge the execution of the loan documents,
did not receive the loan proceeds from PNB, and was
not aware of the loan until PNB notified her in 14
August 1978 that she and her family should vacate
the mortgaged property because of the expiration of
the redemption period. Under the Civil Code, the
effective law at the time of the transaction, Ros could
not encumber any real property of the conjugal
partnership without Aguetes consent. Aguete may,
during their marriage and within ten years from the
transaction questioned, ask the courts for the
annulment of the contract her husband entered into
without her consent, especially in the present case
where her consent is required. The trial court,
however, ruled that its decision is without prejudice to
the right of action of PNB to recover the amount of the
loan and its interests from Ros.
The dispositive portion reads:
WHEREFORE, premises considered, judgment is
hereby rendered:
1. DECLARING the Deed of Real Estate
Mortgage (Exhibit "C") and the subsequent
foreclosure proceedings conducted thereon
NULL and VOID;
2. ORDERING the Register of Deeds of the
City of Laoag to cancel TCT No. T-15276 in
the name of defendant PNB and revert the
same in the name of plaintiffs spouses Joe
Ros and Estrella Aguete;

3. ORDERING defendant to vacate and


turnover the possession of the premises of the
property in suit to the plaintiffs; and
4. ORDERING defendant to pay plaintiffs
attorneys fee and litigation expenses in the
sum of TEN THOUSAND (P10,000.00)
PESOS.
No pronouncement as to costs.
SO ORDERED.6]
PNB filed its Notice of Appeal7 of the trial courts
decision on 13 September 2001 and paid the
corresponding fees. Petitioners filed on the same date
a motion for execution pending appeal,8 which PNB
opposed.9 In their comment to the opposition10 filed on
10 October 2001, petitioners stated that at the hearing
of the motion on 3 October 2001, PNBs lay
representative had no objection to the execution of
judgment pending appeal. Petitioners claimed that the
house on the subject lot is dilapidated, a danger to life
and limb, and should be demolished. Petitioners
added that they obliged themselves to make the
house habitable at a cost of not less P50,000.00. The
repair cost would accrue to PNBs benefit should the
appellate court reverse the trial court. PNB continued
to oppose petitioners motion.11
In an Order12 dated 8 May 2002, the trial court found
petitioners motion for execution pending appeal
improper because petitioners have made it clear that
they were willing to wait for the appellate courts
decision. However, as a court of justice and equity,
the trial court allowed petitioners to occupy the
subject property with the condition that petitioners
would voluntarily vacate the premises and waive
recovery of improvements introduced should PNB
prevail on appeal.
The Appellate Courts Ruling
On 17 October 2005, the appellate court rendered its
Decision13 and granted PNBs appeal. The appellate
court reversed the trial courts decision, and
dismissed petitioners complaint.
The appellate court stated that the trial court
concluded forgery without adequate proof; thus it was
improper for the trial court to rely solely on Aguetes
testimony that her signatures on the loan documents
were forged. The appellate court declared that Aguete

affixed her signatures on the documents knowingly


and with her full consent.
Assuming arguendo that Aguete did not give her
consent to Ros loan, the appellate court ruled that the
conjugal partnership is still liable because the loan
proceeds redounded to the benefit of the family. The
records of the case reveal that the loan was used for
the expansion of the familys business. Therefore, the
debt obtained is chargeable against the conjugal
partnership.
Petitioners filed the present petition for review before
this Court on 9 December 2005.

(2) That which is obtained by the industry, or


work or as salary of the spouses, or of either
of them;
(3) The fruits, rents or interest received or due
during the marriage, coming from the common
property or from the exclusive property of
each spouse.
Art. 160. All property of the marriage is presumed to
belong to the conjugal partnership, unless it be
proved that it pertains exclusively to the husband or to
the wife.
Art. 161. The conjugal partnership shall be liable for:

The Issues
Petitioners assigned the following errors:
I. The Honorable Court of Appeals erred in not giving
weight to the findings and conclusions of the trial
court, and in reversing and setting aside such findings
and conclusions without stating specific contrary
evidence;
II. The Honorable Court of Appeals erred in declaring
the real estate mortgage valid;
III. The Honorable Court of Appeals erred in declaring,
without basis, that the loan contracted by husband
Joe A. Ros with respondent Philippine National Bank
Laoag redounded to the benefit of his family, aside
from the fact that such had not been raised by
respondent in its appeal.14]

(1) All debts and obligations contracted by the


husband for the benefit of the conjugal
partnership, and those contracted by the wife,
also for the same purpose, in the cases where
she may legally bind the partnership;
(2) Arrears or income due, during the
marriage, from obligations which constitute a
charge upon property of either spouse or of
the partnership;
(3) Minor repairs or for mere preservation
made during the marriage upon the separate
property of either the husband or the wife;
major repairs shall not be charged to the
partnership;
(4) Major or minor repairs upon the conjugal
partnership property;

The Courts Ruling


The petition has no merit. We affirm the ruling of the
appellate court.
The Civil Code was the applicable law at the time of
the mortgage. The subject property is thus considered
part of the conjugal partnership of gains. The
pertinent articles of the Civil Code provide:
Art. 153. The following are conjugal partnership
property:
(1) That which is acquired by onerous title
during the marriage at the expense of the
common fund, whether the acquisition be for
the partnership, or for only one of the
spouses;

(5) The maintenance of the family and the


education of the children of both husband and
wife, and of legitimate children of one of the
spouses;
(6) Expenses to permit the spouses to
complete a professional, vocational or other
course.
Art. 166. Unless the wife has been declared a non
compos mentis or a spendthrift, or is under civil
interdiction or is confined in a leprosarium, the
husband cannot alienate or encumber any real
property of the conjugal partnership without the wifes
consent. If she refuses unreasonably to give her
consent, the court may compel her to grant the same.

Art. 173. The wife may, during the marriage, and


within ten years from the transaction questioned, ask
the courts for the annulment of any contract of the
husband entered into without her consent, when such
consent is required, or any act or contract of the
husband which tends to defraud her or impair her
interest in the conjugal partnership property. Should
the wife fail to exercise this right, she or her heirs after
the dissolution of the marriage may demand the value
of the property fraudulently alienated by the husband.
There is no doubt that the subject property was
acquired during Ros and Aguetes marriage. Ros and
Aguete were married on 16 January 1954, while the
subject property was acquired in 1968.15 There is also
no doubt that Ros encumbered the subject property
when he mortgaged it for P115,000.00 on 23 October
1974.16 PNB Laoag does not doubt that Aguete, as
evidenced by her signature, consented to Ros
mortgage to PNB of the subject property. On the other
hand, Aguete denies ever having consented to the
loan and also denies affixing her signature to the
mortgage and loan documents.
The husband cannot alienate or encumber any
conjugal real property without the consent, express or
implied, of the wife. Should the husband do so, then
the contract is voidable.17 Article 173 of the Civil Code
allows Aguete to question Ros encumbrance of the
subject property. However, the same article does not
guarantee that the courts will declare the annulment
of the contract. Annulment will be declared only upon
a finding that the wife did not give her consent. In the
present case, we follow the conclusion of the
appellate court and rule that Aguete gave her consent
to Ros encumbrance of the subject property.
The documents disavowed by Aguete are
acknowledged before a notary public, hence they are
public documents. Every instrument duly
acknowledged and certified as provided by law may
be presented in evidence without further proof, the
certificate of acknowledgment being prima
facie evidence of the execution of the instrument or
document involved.18 The execution of a document
that has been ratified before a notary public cannot be
disproved by the mere denial of the alleged
signer.19 PNB was correct when it stated that
petitioners omission to present other positive
evidence to substantiate their claim of forgery was
fatal to petitioners cause.20Petitioners did not present
any corroborating witness, such as a handwriting
expert, who could authoritatively declare that Aguetes
signatures were really forged.

A notarized document carries the evidentiary weight


conferred upon it with respect to its due execution,
and it has in its favor the presumption of regularity
which may only be rebutted by evidence so clear,
strong and convincing as to exclude all controversy as
to the falsity of the certificate. Absent such, the
presumption must be upheld. The burden of proof to
overcome the presumption of due execution of a
notarial document lies on the one contesting the
same. Furthermore, an allegation of forgery must be
proved by clear and convincing evidence, and
whoever alleges it has the burden of proving the
same.21]
Ros himself cannot bring action against PNB, for no
one can come before the courts with unclean
hands. In their memorandum before the trial court,
petitioners themselves admitted that Ros forged
Aguetes signatures.
1avvphi1

Joe A. Ros in legal effect admitted in the complaint


that the signatures of his wife in the questioned
documents are forged, incriminating himself to
criminal prosecution. If he were alive today, he would
be prosecuted for forgery. This strengthens the
testimony of his wife that her signatures on the
questioned documents are not hers.
In filing the complaint, it must have been a remorse of
conscience for having wronged his family; in forging
the signature of his wife on the questioned
documents; in squandering the P115,000.00 loan
from the bank for himself, resulting in the foreclosure
of the conjugal property; eviction of his family
therefrom; and, exposure to public contempt,
embarassment and ridicule.22]
The application for loan shows that the loan would be
used exclusively "for additional working [capital] of
buy & sell of garlic & virginia tobacco."23 In her
testimony, Aguete confirmed that Ros engaged in
such business, but claimed to be unaware whether it
prospered. Aguete was also aware of loans
contracted by Ros, but did not know where he
"wasted the money."24 Debts contracted by the
husband for and in the exercise of the industry or
profession by which he contributes to the support of
the family cannot be deemed to be his exclusive and
private debts.25
If the husband himself is the principal obligor in the
contract, i.e., he directly received the money and
services to be used in or for his own business or his
own profession, that contract falls within the term "x x

x x obligations for the benefit of the conjugal


partnership." Here, no actual benefit may be proved. It
is enough that the benefit to the family is apparent at
the signing of the contract. From the very nature of
the contract of loan or services, the family stands to
benefit from the loan facility or services to be
rendered to the business or profession of the
husband. It is immaterial, if in the end, his business or
profession fails or does not succeed. Simply stated,
where the husband contracts obligations on behalf of
the family business, the law presumes, and rightly so,
that such obligation will redound to the benefit of the
conjugal partnership.26]
For this reason, we rule that Ros loan from PNB
redounded to the benefit of the conjugal partnership.
Hence, the debt is chargeable to the conjugal
partnership.
WHEREFORE, we DENY the petition. The Decision
of the Court of Appeals in CA-G.R. CV No. 76845
promulgated on 17 October 2005 is AFFIRMED.
Costs against petitioners.
SO ORDERED.
HEIRS OF HERNANDEZ V MINGOA

DECISION
LEONARDO-DE CASTRO, J.:
This is a petition for review
on certiorari of
the Decision[2] dated
September 7, 2000 and Resolution[3] dated
December 29, 2000, both of the Court of
Appeals (CA), in CA-G.R. CV No.
54896. The CA Decision reversed and set
aside the decision of the Regional Trial
Court (RTC) of Quezon City (Branch 92),
which ruled in favor of herein petitioners in
the action for reconveyance filed by the
latter in said court against the
respondents. The CA Resolution denied the
petitioners motion for reconsideration.

The subject matter of the action is a


parcel of land with an area of 520.50 square
meters situated in Diliman, Quezon City,
described as Lot 15, Block 89 of the
subdivision plan Psd-68807, covered by
Transfer Certificate of Title (TCT) No.
107534[4] issued on May 23, 1966 and
registered in the name of Domingo B.
Hernandez, Sr. married to Sergia V.
Hernandez. Later on, said TCT No. 107534
was cancelled and in lieu thereof, TCT No.
290121[5] was issued in favor of Melanie
Mingoa.
These are the factual antecedents of
this case:
On
February
11,
1994,
a
[6]
complaint was filed with the RTC of
Quezon City by herein petitioners, heirs of
Domingo Hernandez, Sr., namely, spouse
Sergia Hernandez and their surviving
children Domingo, Jr. and Maria Leonora
Wilma, against the respondents herein,
Dolores Camisura, Melanie Mingoa, Atty.
Plaridel Mingoa, Sr. and all persons
claiming rights under the latter, and the
Quezon City Register of Deeds. The case
was docketed as Civil Case No. 094-19276.
In their complaint, the petitioners
asked for (a) the annulment and/or
declaration of nullity of TCT No. 290121
including all its derivative titles, the
Irrevocable Special Power of Attorney
(SPA) dated February 14, 1963 in favor of
Dolores Camisura,[7] the SPA dated May 9,
1964 in favor of Plaridel Mingoa, Sr.,[8] and
the Deed of Absolute Sale of Real
Estate[9] dated July 9, 1978 executed by

Plaridel Mingoa, Sr. in favor of Melanie


Mingoa for being products of forgery and
falsification; and (b) the reconveyance
and/or issuance to them (petitioners) by the
Quezon City Register of Deeds of the
certificate of title covering the subject
property.
Respondents filed a Motion to
Dismiss[10] the complaint interposing the
following grounds: the claim or demand has
been paid, waived, abandoned or otherwise
extinguished; lack of cause of action; lack of
jurisdiction over the person of the
defendants or over the subject or nature of
the suit; and prescription. The following
were attached to said motion: a Deed of
Transfer of Rights[11] dated February 14,
1963 from Domingo Hernandez, Sr. to
Camisura, the Irrevocable SPA[12] executed
by the former in the latters favor, and a
Deed of Sale of Right in a Residential Land
and Improvements Therein[13] dated May 9,
1964 executed by Camisura in favor of
Plaridel Mingoa, Sr.
In its Order[14] dated September 1,
1994, the trial court denied respondents
motion to dismiss.
Respondents
filed
a
petition
for certiorari and prohibition with the CA
assailing the aforementioned Order of denial
by the RTC. Their initial petition was
dismissed for being insufficient in
form. Respondents then re-filed their
petition, which was docketed as CA-G.R. SP
No. 36868. In a decision[15] dated May 26,
1995, respondents re-filed petition was
denied due course by the CA. Having been
filed beyond the reglementary period,

respondents
subsequent
motion
for
reconsideration was simply noted by the CA
in its Resolution of July 7, 1995. On the
basis of a technicality, this Court, in a
Resolution dated September 27, 1995,
dismissed respondents' appeal which was
docketed as G.R. No. 121020. Per Entry of
Judgment,[16] said Resolution became final
and executory on January 2, 1996.
Meanwhile, respondents filed their
Answer[17] in the main case therein denying
the allegations of the complaint and averring
as defenses the same grounds upon which
they anchored their earlier motion to
dismiss.
The parties having failed to amicably
settle during the scheduled pre-trial
conference, the case proceeded to trial.
The evidence respectively presented
by the parties is summarized as follows:[18]
x x x [It] appears that in
the early part of 1958, Domingo
Hernandez, Sr. (who was then a
Central Bank employee) and his
spouse Sergia V. Hernandez
were awarded a piece of real
property by the Philippine
Homesite
and
Housing
Corporation (PHHC) by way of
salary deduction. On October
18, 1963, the [petitioners] then
having paid in full the entire
amount of P6,888.96, a Deed of
Absolute Sale of the property
was executed by the PHHC in
their favor. TCT No. 107534,
covering the property was issued
to the [petitioners] on May 23,
1966.It bears an annotation of
the retention period of the

property by the awardee (i.e.,


restriction of any unauthorized
sale to third persons within a
certain period). Tax payments
due on the property were
religiously paid (until 1955) by
the [petitioners] as evidenced by
receipts under the [petitioners]
name.
Hernandez, Sr. died intestate in
April 1983 and it was only after
his burial that his heirs found
out that TCT No. 107534 was
already cancelled a year before
(in 1982), and in lieu thereof,
TCT No. 290121 was issued to
the [respondents]. Upon diligent
inquiry, [petitioners] came to
know that the cancellation of
TCT (No. 107534) in favor of
the [respondents] xxx TCT (No.
290121) was based upon three
sets of documents, namely, (1)
Irrevocable Power of Attorney;
(2) Irrevocable Special Power of
Attorney; and (3) Deed of
Absolute Sale.
[Petitioners] also allege that
because of financial difficulties,
they were only able to file a
complaint on February 11, 1995
after consulting with several
lawyers.
xxxx
[Respondents] xxx on the
other hand do not deny that
Hernandez, Sr. was indeed
awarded a piece of real property
by the PHHC. According to the
[respondents] xxx, Hernandez,
Sr. was awarded by the PHHC
the Right to Purchase the

property in question; however,


the late Hernandez, Sr. failed to
pay all the installments due on
the said property. Thus, afraid
that he would forfeit his right to
purchase the property awarded
to him, Hernandez, Sr. sold to
Dolores Camisura his rights for
the sum of P6,500.00 on
February 14, 1963, through a
deed of transfer of rights,
seemingly a printed form from
the PHHC. Simultaneous to this,
Hernandez, Sr. and his spouse
executed an irrevocable special
power of attorney, appointing
Dolores Camisura as their
attorney-in-fact with express
power to sign, execute and
acknowledge any contract of
disposition,
alienation
and
conveyance of her right over the
aforesaid parcel of land.
Apparently, this special power
of attorney was executed for the
purpose of securing her right to
transfer the property to a third
person considering that there
was a prohibition to dispose of
the property by the original
purchaser within one (1) year
from full payment. Else wise
stated, the irrevocable power of
attorney was necessary in order
to enable the buyer, Dolores
Camisura, to sell the lot to
another,
Plaridel
Mingoa,
without the need of requiring
Hernandez, to sign a deed of
conveyance.
On May 9, 1964, Dolores
Camisura sold her right over the
said property to Plaridel Mingoa
for P7,000.00. Camisura then

executed a similar irrevocable


power of attorney and a deed of
sale of right in a residential land
and improvements therein in
favor of Plaridel Mingoa. Upon
such payment and on the
strength of the said irrevocable
power of attorney, Plaridel
Mingoa took possession of the
said property and began paying
all the installments due on the
property to PHHC. Plaridel
Mingoa further secured TCT
No. 107534 (issued in the name
of Domingo Hernandez, Sr.) on
May, 1966. On July 9, 1978,
Plaridel Mingoa sold to his
eldest child, Melanie Mingoa,
the property in question for
P18,000.00. TCT No. 107534
was thus cancelled and TCT No.
290121 was issued in the name
of Melanie Mingoa. It is further
claimed that since 1966 until
1982,
Plaridel
Mingoa
religiously paid all the taxes due
on the said property; and that
from 1983 up to the present,
Melanie Mingoa paid all the
property taxes due thereon aside
from having actual possession of
the said property. (words in
brackets ours)

On May 9, 1996, the RTC rendered a


decision[19] in favor of the petitioners, with
the following dispositive portion:
WHEREFORE, premises
considered, judgment is hereby
rendered in favor of the
plaintiffs as follows:

1) TCT No. 290121 and


all its derivative titles are hereby
declared null and void;
2) Ordering the Register
of Deeds of Quezon City to
cancel TCT No. 290121 issued
in the name of defendant
Melanie
Mingoa
and
corresponding owners duplicate
certificate and all its derivative
title[s];
3) Ordering
defendant
Melanie Mingoa and all
derivative owners to surrender
owners duplicate copies of
transfer certificate of title to the
Register of Deeds of Quezon
City for cancellation upon
finality of this decision;
4)
Ordering
the
defendants except the Register
of Deeds of Quezon City to turn
over to the plaintiffs the
peaceful possession of the
subject property; and
5) Ordering
the
defendants except the Register
of Deeds of Quezon City to
jointly and severally (sic) pay
the plaintiffs the sum of
P10,000.00 as attorneys [fees]
and to pay the costs of suit.
SO ORDERED.

In ruling in favor of petitioners, the


trial court reasoned as follows:[20]
The two (2) parties in the
case at bar gave out conflicting
versions as to who paid for the
subject property. The plaintiffs

claim that they were the ones


who paid the entire amount out
of the conjugal funds while it is
the contention of the defendant
Mingoa that the former were not
able to pay. The defendant
alleged that the right to purchase
was sold to him and he was able
to pay the whole amount. The
Court is of the opinion that
petitioners version is more
credible taken together with the
presence of the irrevocable
power of attorney which both
parties admitted. In light of the
version of the defendants, it is
highly improbable that a Power
of Attorney would be constituted
by the plaintiffs authorizing the
former to sell the subject
property. This is because for all
intents and purposes, the land is
already the defendants for if we
are to follow their claim, they
paid for the full amount of the
same. It can be safely concluded
then that the Power of Attorney
was unnecessary because the
defendants, as buyers, can
compel the plaintiff-sellers to
execute the transfer of the said
property after the period of
prohibition has lapsed. The
defendants, as owners, will have
the right to do whatever they
want with the land even without
an Irrevocable Power of
Attorney. Since the presence of
the Irrevocable Power of
Attorney is established, it is now
the task of this Court to
determine the validity of the sale
made by virtue of the said Power
of Attorney. As what was said
earlier, the Court subscribes to
the points raised by the

plaintiffs. It was proved during


trial that the signature of the wife
was falsified. Therefore, it is as
if the wife never authorized the
agent to sell her share of the
subject land, it being conjugal
property. It follows that the sale
of half of the land is
invalid. However, it must be
pointed out that the signature of
the deceased husband was never
contested and is therefore
deemed admitted. We now come
to the half which belongs to the
deceased husband. The Law on
Sales expressly prohibits the
agent from purchasing the
property of the principal without
the latters consent (Article 1491
of the Civil Code). It was
established from the records that
defendant Plaridel Mingoa sold
the subject land to his daughter
Melanie. It is now for the Court
to
decide
whether
this
transaction is valid. x x x
Considering that the sale took
place in July 1978, it follows
from
simple
mathematical
computation that Melanie was
then a minor (20 years of age)
when she allegedly bought the
property from her father. Since
Melanies father is the sub-agent
of the deceased principal, he is
prohibited
by
law
from
purchasing the land without the
latters consent. This being the
case, the sale is invalid for it
appears that Plaridel Mingoa
sold the land to himself. It
should be noted that the
defendants could have easily
presented
Melanies
birth
certificate, it being at their
disposal, but they chose not

to. Because of this, this Court is


of the belief that the presumption
that
evidence
willfully
suppressed would be adverse if
produced arises.

The trial court denied respondents


motion for reconsideration of the
aforementioned decision in its Order[21] of
August 22, 1996.
Aggrieved, the respondents appealed
to the CA, where their case was docketed
as CA-G.R. CV No. 54896. Holding that the
petitioners were barred by prescription
and laches to take any action against the
respondents, the CA, in its herein
assailedDecision[22] dated September 7,
2000, reversed and set aside the appealed
decision, thereby dismissing the complaint
filed by the petitioners before the trial
court. In full, the disposition reads:
WHEREFORE, in view
of the foregoing, the Decision of
the RTC Branch 92, Quezon
City, in Civil Case No. Q-9419276, entitled, Heirs of
Domingo Hernandez, Sr. vs.
Dolores Camisura, et. al., is
hereby REVERSED AND SET
ASIDE. A new one is hereby
entered,
DISMISSING
the
complaint in Civil Case No. Q94-19276 entitled, Heirs of
Domingo Hernandez, Sr. vs.
Dolores Camisura, et. al., filed
by the plaintiffs-appellees before
the RTC Branch 92, Quezon
City for lack of merit.
SO ORDERED.

Petitioners subsequent motion for


reconsideration was denied by the CA in its
impugned Resolution[23] dated December
29, 2000.
Hence, petitioners are now before this
Court via the present recourse. The ten (10)
assigned errors set forth in the petition all
boil down to the essential issue of whether
the title of the subject property in the name
of respondent Melanie Mingoa may still be
reconveyed to the petitioners. As we see it,
the resolution thereof hinges on these two
pivotal questions: (1) whether there was a
valid alienation involving the subject
property; and (2) whether the action
impugning the validity of such alienation
has prescribed and/or was barred by laches.
The Court shall deal first with the
procedural issues raised by the respondents
in their Comment.[24]
We held in Vera-Cruz v. Calderon[25] that:
As a general rule, only questions
of law may be raised in a petition
for review on certiorari to the
Supreme Court. Although it has
long been settled that findings of
fact are conclusive upon this
Court, there are exceptional
circumstances which would
require us to review findings of
fact of the Court of Appeals, to
wit:
(1)
the
conclusion is a
finding grounded
entirely
on
speculation,

surmise
and
conjectures; (2) the
inference made is
manifestly
mistaken; (3) there
is grave abuse of
discretion; (4) the
judgment is based
on misapprehension
of facts; (5) the
findings of fact are
conflicting; (6) the
Court of Appeals
went beyond the
issues of the case
and its findings are
contrary to the
admissions of both
appellant
and
appellees; (7) the
findings of fact of
the
Court
of
Appeals
are
contrary to those
of the trial court;
(8) said findings of
fact are conclusions
without citation of
specific evidence
on which they are
based; (9) the facts
set forth in the
decision as well as
in the petitioners
main and reply
briefs
are
not
disputed by the
respondents; (10)
the finding of fact
of the Court of
Appeals is premised
on the supposed
absence of evidence
and is contradicted
by evidence on

record. (emphasis
ours)

The petition before us raises factual


issues which are not proper in a petition for
review under Rule 45 of the Rules of
Court. However, we find that one of the
exceptional circumstances qualifying a
factual review by the Court exists, that is,
the factual findings of the CA are at variance
with those of the trial court. We shall then
give due course to the instant petition and
review the factual findings of the CA.
Even if only petitioner Domingo Hernandez,
Jr.
executed
the
[26]
Verification/Certification against forumshopping, this will not deter us from
proceeding with the judicial determination
of the issues in this petition. As we
ratiocinated in Heirs of Olarte v. Office of
the President:[27]
The general rule is that the
certificate
of
non-forum
shopping must be signed by all
the plaintiffs in a case and the
signature of only one of them is
insufficient. However, the Court
has also stressed that the rules on
forum shopping were designed to
promote and facilitate the orderly
administration of justice and thus
should not be interpreted with
such absolute literalness as to
subvert its own ultimate and
legitimate objective. The rule of
substantial compliance may be
availed of with respect to the
contents of the certification. This
is because the requirement of
strict compliance with the

provisions
regarding
the
certification
of
non-forum
shopping merely underscores its
mandatory nature in that the
certification cannot be altogether
dispensed
with
or
its
requirements
completely
disregarded. Thus,
under
justifiable circumstances, the
Court has relaxed the rule
requiring the submission of such
certification considering that
although it is obligatory, it is not
jurisdictional.
In HLC
Construction
and
Development Corporation v.
Emily
Homes
Subdivision
Homeowners Association, it was
held that the signature of only
one of the petitioners in the
certification
against
forum
shopping substantially complied
with rules because all the
petitioners share a common
interest and invoke a common
cause of action or defense.
The same leniency was applied
by the Court in Cavile v. Heirs of
Cavile,
because
the
lone
petitioner who executed the
certification
of
non-forum
shopping was a relative and coowner of the other petitioners
with whom he shares a common
interest. x x x
xxx
In the instant case, petitioners
share a common interest and
defense inasmuch as they
collectively claim a right not to
be dispossessed of the subject lot
by virtue of their and their
deceased parents construction of
a family home and occupation
thereof for more than 10 years.

The commonality of their stance


to defend their alleged right over
the controverted lot thus gave
petitioners xxx authority to
inform the Court of Appeals in
behalf of the other petitioners
that they have not commenced
any action or claim involving the
same issues in another court or
tribunal, and that there is no
other pending action or claim in
another court or tribunal
involving the same issues. x x x
Here, all the petitioners are immediate
relatives who share a common interest in the
land sought to be reconveyed and a common
cause of action raising the same arguments
in support thereof. There was sufficient
basis, therefore, for Domingo Hernandez, Jr.
to speak for and in behalf of his copetitioners when he certified that they had
not filed any action or claim in another court
or tribunal involving the same issues. Thus,
the
Verification/Certification
that
Hernandez,
Jr.
executed
constitutes
substantial compliance under the Rules.

Anent the contention that the petition


erroneously impleaded the CA as respondent
in contravention of Section 4(a)[28] of Rule
45 of the 1997 Rules of Civil Procedure, we
shall apply our ruling in Simon v. Canlas,
[29]
wherein we held that:
x x x [The] Court agrees that the
correct procedure, as mandated
by Section 4, Rule 45 of the
1997 Rules of Civil Procedure, is
not to implead the lower court
which rendered the assailed
decision. However, impleading
the lower court as respondent in
the petition for review on

certiorari does not automatically


mean the dismissal of the appeal
but merely authorizes the
dismissal
of
the
petition. Besides, formal defects
in
petitions
are
not
uncommon. The
Court
has
encountered previous petitions
for review on certiorari that
erroneously impleaded the CA.In
those cases, the Court merely
called the petitioners attention to
the defects and proceeded to
resolve the case on their merits.
The Court finds no reason
why it should not afford the
same liberal treatment in this
case. While unquestionably, the
Court has the discretion to
dismiss the appeal for being
defective, sound policy dictates
that it is far better to dispose of
cases on the merits, rather than
on technicality as the latter
approach may result in injustice.
This is in accordance with
Section 6, Rule 1 of the 1997
Rules of Civil Procedure which
encourages a reading of the
procedural requirements in a
manner that will help secure and
not defeat justice.

We now come to the substantive


issues.
As correctly found by the
appellate court, the following facts are
undisputed:[30]
1. Domingo Hernandez, Sr. was
awarded a piece of real property
in 1958 by the PHHC as part of
the
governments
housing

program at the time. Title over


the said property was issued in
1966 in the name of Hernandez,
Sr., after full payment for the
property was received by the
PHHC.
2. Neither
[petitioners]
nor
Hernandez, Sr., took possession
of the said property. On the other
hand, the [respondents] took
possession of the said property
in 1966 and are in actual and
physical possession thereof up to
the present, and have made
considerable
improvements
thereon, including a residential
house where they presently
reside.
3. The Owners Duplicate Copy of
the title over the property given
by the PHHC to Hernandez, Sr.
was in the possession of Plaridel
Mingoa, the latter being able to
facilitate the cancellation of the
said title and [the issuance of] a
new TCT xxx in the name of
Melanie Mingoa.
4. The realty taxes have been paid
by [respondents], albeit in the
name of Hernandez, Sr., but all
official receipts of tax payments
are kept by the [respondents].
5. From 1966 (the time when the
[respondents] were able to
possess the property) to 1983
(the time when the [petitioners]
had knowledge that the TCT in
the name of Hernandez, Sr. had
already been cancelled by the
Registry of Deeds of Quezon
City) covers almost a span of 17
years; and from 1983 to 1995

(the time when the Heirs filed


the original action) is a period of
another 12 years.

The SPA[31] in favor of Dolores


Camisura pertinently states that the latter is
the lawful attorney-in-fact of Domingo B.
Hernandez, Sr., married to Sergia
Hernandez, to do and perform, among
others, the following acts and deeds:
1. To
sign,
execute
and
acknowledge all such contracts,
deeds or other instruments which
may be required by the Peoples
Homesite
and
Housing
Corporation with respect to the
purchase of that certain parcel of
land known and designated as
Lot No. 15 Block E-89 of the
Malaya Avenue Subdivision,
situated in Quezon City and
containing an area of 520 square
meters, more or less, which I
have
acquired
thru
the
CENTRAL BANK
STAFF
HOUSING CORPORATION;
2. To
sign,
execute
and
acknowledge all such contracts
or other instruments which may
deem necessary or be required to
sign, execute and acknowledge
for the purpose of selling,
transferring,
conveying,
disposing
of
or
alienating whatever rights I may
have over that parcel of land
mentioned above;
x x x.

[32]

The Deed of Transfer of Rights,


also executed by Hernandez, Sr. in

Camisuras favor, expressly states that the


former, in consideration of the amount
of P6,500.00, transfers his rights over the
subject property to the latter. Notably, such
deed was simultaneously executed with the
SPA on February 14, 1963.
From the foregoing, the Court cannot
but conclude that the SPA executed by
Hernandez, Sr. in respondent Camisura's
favor was, in reality, an alienation involving
the subject property. We particularly note
that Hernandez, Sr., aside from executing
said SPA, likewise sold his rights and
interests over the property awarded by the
PHHC to Camisura. The CA committed no
error when it ruled:[33]
x x x Appreciating the case in its
entirety, the purported SPA
appear to be merely a grant of
authority to Camisura (and then
to Plaridel Mingoa) to sell and
dispose of the subject property as
well as a grant of right to
purchase the said property; but in
essence, such SPA are disguised
deeds of sale of the property
executed in circumventing the
retention period restriction over
the said property. Verily, the
parties knew that the land in
question could not be alienated
in favor of any third person
within one (1) year without the
approval of the PHHC.

Having ruled that the SPA in favor of


Camisura was a contract of sale, the next
question is whether or not such sale was
valid.

To constitute a valid contract, the


Civil Code requires the concurrence of the
following elements: (1) cause, (2) object,
and (3) consent.
The consent of Domingo Hernandez, Sr. to
the contract is undisputed, thus, the sale of
his share in the conjugal property was
valid. With regard to the consent of his wife,
Sergia Hernandez, to the sale involving their
conjugal property, the trial court found that
it was lacking because said wifes signature
on the SPA was falsified. Notably, even the
CA observed that the forgery was so blatant
as to be remarkably noticeable to the naked
eye of an ordinary person. Having compared
the questioned signature on the SPA[34] with
those of the documents[35] bearing the
sample standard signature of Sergia
Hernandez, we affirm both lower courts'
findings regarding the forgery.
However, Sergias lack of consent to
the sale did not render the transfer of her
share invalid.
Petitioners contend that such lack of consent
on the part of Sergia Hernandez rendered the
SPAs and the deed of sale fictitious, hence
null and void in accordance with Article
1409[36] of the Civil Code. Petitioners
likewise contend that an action for the
declaration of the non-existence of a
contract under Article 1410[37] does not
prescribe.
We find, after meticulous review of the
facts, that Articles 1409 and 1410 are not
applicable to the matter now before us.

It bears stressing that the subject matter


herein involves conjugal property. Said
property was awarded to Domingo
Hernandez, Sr. in 1958. The assailed SPAs
were executed in 1963 and 1964. Title in the
name of Domingo Hernandez, Sr. covering
the subject property was issued on May 23,
1966. The sale of the property to Melanie
Mingoa and the issuance of a new title in her
name happened in 1978. Since all these
events occurred before the Family Code
took effect in 1988, the provisions of the
New
Civil
Code
govern
these
transactions. We quote the applicable
provisions, to wit:
Art. 165. The husband is the
administrator of the conjugal
partnership.
Art. 166. Unless the wife
has been declared a non compos
mentis or a spendthrift, or is
under civil interdiction or is
confined in a leprosarium, the
husband cannot alienate or
encumber any real property of
the conjugal partnership without
the wifes consent. If she refuses
unreasonably to give her
consent, the court may compel
her to grant the same. x x x.
Art.
173. The
wife
may, during the marriage, and
within ten years from the
transaction questioned, ask the
courts for the annulment of any
contract of the husband entered
into without her consent, when
such consent is required, or any
act or contract of the husband
which tends to defraud her or

impair her interest in the


conjugal
partnership
property. Should the wife fail to
exercise this right, she or her
heirs, after the dissolution of the
marriage, may demand the value
of
property
fraudulently
alienated by the husband.
(Emphasis ours.)

Notwithstanding the foregoing, petitioners


argue that the disposition of conjugal
property made by a husband without the
wifes consent is null and void and the right
to file an action thereon is imprescriptible, in
accordance with Garcia v. CA[38] andBucoy
v. Paulino.[39].
Concededly, in the aforementioned cases
of Garcia and Bucoy, the contracts involving
the sale of conjugal property by the husband
without the wife's consent were declared
null and void by this Court. But even
in Bucoy, we significantly ruled, in reference
to Article 173, that:
The
plain
meaning
attached to the plain language of
the law is that the contract, in its
entirety, executed by the
husband without the wifes
consent, may be annulled by
the wife.[40] (emphasis ours)

In succeeding cases, we held that


alienation and/or encumbrance of conjugal
property by the husband without the wifes
consent is not null and void but merely
voidable.
In Sps. Alfredo v. Sps. Borras,[41] we
held that:

The Family Code, which took


effect on 3 August 1988,
provides that any alienation or
encumbrance made by the
husband
of
the
conjugal
partnership property without the
consent of the wife is
void. However, when the sale is
made before the effectivity of the
Family Code, the applicable law
is the Civil Code.
Article 173 of the Civil
Code
provides
that
the
disposition of conjugal property
without the wife's consent is not
void but merely voidable.

We likewise made the same


holding in Pelayo v. Perez :[42]
xxx [Under] Article 173, in
relation to Article 166, both of
the New Civil Code, which was
still in effect on January 11, 1988
when the deed in question was
executed, the lack of marital
consent to the disposition of
conjugal property does not make
the contract void ab initio but
merely voidable.
In Vera-Cruz v. Calderon,[43] the Court
noted the state of jurisprudence and
elucidated on the matter, thus:
In the recent case of Heirs
of Ignacia Aguilar-Reyes v.
Spouses Mijares, we reiterated
the rule that the husband cannot
alienate or encumber any
conjugal real property without
the consent, express or implied,

of the wife, otherwise, the


contract is voidable. To wit:
Indeed,
in
several cases the
Court has ruled that
such alienation or
encumbrance
by
the husband is
void. The
better
view, however, is to
consider
the
transaction
as
merely
voidable
and not void. This
is consistent with
Article 173 of the
Civil
Code
pursuant to which
the wife could,
during
the
marriage
and
within 10 years
from
the
questioned
transaction, seek
its annulment.
xxx
Likewise, in the case
of Heirs of Christina Ayuste v.
Court of Appeals, we declared
that:
There is no
ambiguity in the
wording of the
law. A sale of real
property of the
conjugal
partnership made
by the husband
without the consent
of his wife is
voidable. The

action
for
annulment must be
brought during the
marriage
and
within ten years
from the questioned
transaction by the
wife. Where
the
law speaks in clear
and
categorical
language, there is
no
room
for
interpretation there
is room only for
application.
x x x (Emphasis ours.)
Here, the husbands first act of disposition of
the subject property occurred in 1963 when
he executed the SPA and the Deed of
Transfer of Rights in favor of Dolores
Camisura. Thus, the right of action of the
petitioners accrued in 1963, as Article 173 of
the Civil Code provides that the wife may
file for annulment of a contract entered into
by the husband without her consent within
ten (10) years from the transaction
questioned. Petitioners filed the action for
reconveyance in 1995. Even if we were to
consider that their right of action arose when
they learned of the cancellation of TCT No.
107534 and the issuance of TCT No. 290121
in Melanie Mingoas name in 1993, still,
twelve (12) years have lapsed since such
discovery, and they filed the petition beyond
the period allowed by law. Moreover, when
Sergia Hernandez, together with her
children, filed the action for reconveyance,
the conjugal partnership of property with
Hernandez, Sr. had already been terminated
by virtue of the latter's death on April 16,

1983. Clearly, therefore, petitioners action


has prescribed.
And this is as it should be, for in the
same Vera-Cruz case, we further held that:[44]
xxx [Under] Article 173
of the New Civil Code, an action
for the annulment of any
contract entered into by the
husband without the wifes
consent must be filed (1) during
the marriage; and (2) within ten
years from the transaction
questioned. Where any one of
these two conditions is lacking,
the action will be considered as
having been filed out of time.
In the case at bar, while
respondent filed her complaint
for annulment of the deed of sale
on July 8, 1994, i.e., within the
ten-year period counted from the
execution of the deed of sale of
the property on June 3, 1986, the
marriage between her and
Avelino had already been
dissolved by the death of the
latter on November 20, 1993. In
other words, her marriage to
Avelino was no longer subsisting
at the time she filed her
complaint. Therefore, the civil
case had already been barred by
prescription. (Emphasis ours.)

Thus, the failure of Sergia Hernandez


to file with the courts an action for
annulment of the contract during the
marriage and within ten (10) years from the
transaction necessarily barred her from
questioning the sale of the subject property
to third persons.

As we held in Vda. De Ramones v.


Agbayani:[45]
In Villaranda v. Villaranda, et
al., this Court, through Mr.
Justice Artemio V. Panganiban,
ruled that without the wifes
consent, the husbands alienation
or encumbrance of conjugal
property prior to the effectivity
of the Family Code is not void,
but
merely
voidable. However, the
wifes
failure to file with the courts
an action for annulment of the
contract during the marriage
and within ten (10) years from
the transaction shall render
the sale valid. x x x (emphasis
ours)

More than having merely prescribed,


petitioners action has likewise become stale,
as it is barred by laches.
In Isabela Colleges v. Heirs of NievesTolentino,[46] this Court held:
Laches means the failure or
neglect for an unreasonable and
unexplained length of time to do
that which, by observance of due
diligence, could or should have
been
done
earlier. It
is
negligence or omission to assert
a right within a reasonable time,
warranting the presumption that
the party entitled to assert his
right either has abandoned or
declined to assert it. Laches thus
operates as a bar in equity.

xxx
The time-honored rule anchored
on public policy is that relief
will be denied to a litigant whose
claim or demand has become
stale, or who has acquiesced for
an unreasonable length of time,
or who has not been vigilant or
who has slept on his rights either
by
negligence,
folly
or
inattention. In other words,
public policy requires, for peace
of society, the discouragement of
claims grown stale for nonassertion; thus laches is an
impediment to the assertion or
enforcement of a right which has
become,
under
the
circumstances, inequitable or
unfair to permit.

Pertinently, in De la Calzada-Cierras
v. CA,[47] we ruled that a complaint to
recover the title and possession of the lot
filed 12 years after the registration of the
sale is considered neglect for an
unreasonably long time to assert a right to
the property.
Here, petitioners' unreasonably long period
of inaction in asserting their purported rights
over the subject property weighs heavily
against them. We quote with approval the
findings of the CA that:[48]
It was earlier shown that there
existed a period of 17 years
during which time Hernandez,
Sr. xxx never even questioned
the
defendants-appellants
possession of the property; also
there was another interval of 12
years after discovering that the
TCT of the property in the name

of Hernandez, Sr. before the


Heirs of Hernandez instituted an
action for the reconveyance of
the title of the property.
xxx
The fact that the Mingoa's were
able to take actual possession of
the subject property for such a
long period without any form of
cognizable
protest
from
Hernandez, Sr. and the plaintiffsappellees strongly calls for the
application of the doctrine of
laches. It is common practice in
the real estate industry, an ocular
inspection of the premises
involved is a safeguard to the
cautious and prudent purchaser
usually takes, and should he find
out that the land he intends to
buy is occupied by anybody else
other than the seller who is not
in actual possession, it could
then be incumbent upon the
purchaser to verify the extent of
the
occupant's
possessory
rights. The plaintiffs-appellees
asseverate that the award was
made in favor of Hernandez, Sr.
in 1958; full payment made in
1963; and title issued in 1966. It
would thus be contrary to
ordinary human conduct (and
prudence dictates otherwise) for
any awardee of real property not
to visit and inspect even once,
the property awarded to him and
find out if there are any
transgressors in his property.
Furthermore, Hernandez, Sr.'s
inaction during his lifetime lends
more credence to the defendantsappellants assertion that the said
property was indeed sold by

Hernandez, Sr. by way of the


SPAs, albeit without the consent
of his wife. xxx
In addition, the reasons of
poverty
and
poor
health
submitted by the plaintiffsappellees could not justify the 12
years of delay in filing a
complaint
against
the
defendants-appellants. The
records are bereft of any
evidence to support the idea that
the plaintiffs-appellees diligently
asserted their rights over the said
property after having knowledge
of the cancellation of the TCT
issued
in
Hernandez
name. Moreover
the
Court
seriously doubts the plausibility
of this contention since what the
plaintiffs-appellees are trying to
impress on this Court's mind is
that they did not know anything
at all except only shortly before
the death of Hernandez. To
accept that not even the wife
knew of the transactions made
by Hernandez, Sr. nor anything
about the actual possession of
the defendants-appellants for
such a long period is to Us
absurd if not fantastic.

In sum, the rights and interests of the


spouses Hernandez over the subject property
were validly transferred to respondent
Dolores Camisura. Since the sale of the
conjugal property by Hernandez, Sr. was
without the consent of his wife, Sergia, the
same is voidable; thus, binding unless
annulled. Considering that Sergia failed to
exercise her right to ask for the annulment of
the sale within the prescribed period, she is
now barred from questioning the validity

thereof. And more so, she is precluded from


assailing the validity of the subsequent
transfers from Camisura to Plaridel Mingoa
and from the latter to Melanie
Mingoa. Therefore, title to the subject
property cannot anymore be reconveyed to
the petitioners by reason of prescription
andlaches. The issues of prescription
and laches having been resolved, it is no
longer necessary to discuss the other issues
raised in this petition.
WHEREFORE, the instant petition
is DENIED and the assailed Decision dated
September 7, 2000 and Resolution dated
December 29, 2000 of the Court of Appeals
are hereby AFFIRMED.
Costs against the petitioners.
SO ORDERED.
MANALO V CAMAISA

DECISION
KAPUNAN, J.:

The issue raised in this case is


whether or not the husband may validly
dispose of a conjugal property without the
wifes written consent.
The present controversy had its
beginning
when
petitioner Thelma
A. Jader-Manalo allegedly came across
an advertisement placed by respondents,
the
Spouses
Norma
Fernandez
C. Camaisa and Edilberto Camaisa, in the
Classified Ads Section of the newspaper
BULLETIN TODAY in its April, 1992 issue,

for the sale of their ten-door apartment


in Makati, as well as that in Taytay, Rizal.
As narrated by petitioner in her
complaint filed with the Regional Trial
Court of Makati, Metro Manila, she was
interested in buying the two properties so
she negotiated for the purchase through a
real estate broker, Mr. Proceso Ereno,
authorized by respondent spouses.
Petitioner made a visual inspection of
the said lots with the real estate broker
and was shown the tax declarations, real
property tax payment receipts, location
plans, and vicinity maps relating to the
properties. Thereafter, petitioner met with
the vendors who turned out to be
respondent spouses. She made a definite
offer
to
buy the
properties
to
respondent Edilberto Camaisa with
the
knowledge and conformity of his wife,
respondent
Norma Camaisa in
the
presence of the real estate broker. After
some
bargaining,
petitioner
and Edilberto agreed upon the purchase
price
of P1,500,000.00
for
the Taytay property
and P2,100,000.00
for the Makati property to be paid on
installment
basis
with downpayments of P100,000.00
and P200,000.00, respectively, on April
15, 1992. The balance thereof was to be
paid as follows :
[1]

[2]

[3]

[4]

[5]

Taytay Property Makati Property


6th month P200,000.00 P300,000.00
12th month 700,000.00 1,600,000.00
18th month 500,000.00
This agreement was handwritten by
petitioner and signed by Edilberto. When
[6]

petitioner pointed out the conjugal nature


of the properties, Edilberto assured her of
his wifes conformity and consent to the
sale. The formal typewritten Contracts to
Sell were thereafter prepared by
petitioner. The following day, petitioner,
the real estate broker and Edilberto met in
the latters office for the formal signing of
the typewritten Contracts to Sell.
After Edilberto signed
the
contracts, petitioner delivered to him two
checks, namely, UCPB Check No. 62807
dated April 15, 1992 for P200,000.00 and
UCPB Check No. 62808 also dated April
15, 1992 for P100,000.00 in the presence
of the real estate broker and an employee
in Edilbertos office. The contracts were
given to Edilberto for the formal affixing of
his wifes signature.
[7]

[8]

[9]

The following day, petitioner received


a call from respondent Norma, requesting
a meeting to clarify some provisions of
the contracts. To accommodate her
queries, petitioner, accompanied by her
lawyer, met with Edilberto and Norma and
the
real
estate
broker
at
Cafe Rizal in Makati. During
the
meeting, handwritten notations were
made on the contracts to sell, so they
arranged to incorporate the notations and
to meet again for the formal signing of the
contracts.
[10]

[11]

[12]

When petitioner met again with


respondent spouses and the real estate
broker at Edilbertos office for the formal
affixing of Normas signature, she was
surprised when respondent spouses
informed her that they were backing out
of the agreement because they needed
spot cash for the full amount of the
consideration. Petitioner
reminded
[13]

respondent spouses that the contracts to


sell had already been duly perfected and
Normas refusal to sign the same would
unduly prejudice petitioner. Still, Norma
refused to sign the contracts prompting
petitioner to file a complaint for specific
performance and damages against
respondent spouses before the Regional
Trial Court of Makati, Branch 136 on April
29, 1992, to compel respondent
Norma Camaisa to sign the contracts to
sell.
A Motion to Dismiss was filed by
respondents which was denied by the trial
court in its Resolution of July 21, 1992.
[14]

[15]

Respondents then filed their Answer


with Compulsory Counter-claim, alleging
that it was an agreement between herein
petitioner
and
respondent Edilberto Camaisa that
the
sale of the subject properties was still
subject to the approval and conformity of
his wife
Norma Camaisa. Thereafter,
when Norma refused to give her consent
to the sale, her refusal was duly
communicated by Edilberto to petitioner.
The checks issued by petitioner were
returned to her by Edilberto and she
accepted the same without any objection.
Respondent
further
claimed that
the acceptance of the checks returned to
petitioner signified her assent to the
cancellation of the sale of the subject
properties. Respondent Norma denied
that she ever participated in the
negotiations for the sale of the subject
properties and that she gave her consent
and conformity to the same.
[16]

[17]

[18]

[19]

[20]

On October 20, 1992, respondent


Norma F. Camaisa filed a Motion for

Summary Judgment asserting that there


is no genuine issue as to any material fact
on the basis of the pleadings and
admission of the parties considering that
the wifes written consent was not
obtained in the contract to sell, the
subject conjugal properties belonging to
respondents; hence, the contract was null
and void.
[21]

On April 14, 1993, the trial court


rendered a summary judgment dismissing
the complaint on the ground that under
Art. 124 of the Family Code, the court
cannot intervene to authorize the
transaction in the absence of the consent
of the wife since said wife who refused to
give consent had not been shown to be
incapacitated. The dispositive portion of
the trial courts decision reads:
WHEREFORE, considering these premises,
judgment is hereby rendered:
1. Dismissing the complaint and ordering the
cancellation of the Notice of Lis Pendens by
reason of its filing on TCT Nos. (464860) S8724 and (464861) S-8725 of the Registry of
Deeds at Makati and on TCT Nos. 295976 and
295971 of the Registry of Rizal.
2. Ordering plaintiff Thelma A. Jader to pay
defendant spouses Norma
and Edilberto Camaisa, FIFTY THOUSAND
(P50,000.00) as Moral Damages and FIFTY
THOUSAND (P50,000.00) as Attorneys Fees.
Costs against plaintiff.[22]
Petitioner, thus, elevated the case to
the Court of Appeals. On November 29,
2000, the Court of Appeals affirmed the
dismissal by the trial court but deleted the

award
of P50,000.00
as
damages
and P50,000.00 as attorneys fees.
The Court of Appeals explained that
the properties subject of the contracts
were conjugal properties and as such, the
consent of both spouses is necessary to
give effect to the sale. Since private
respondent Norma Camaisa refused to
sign the contracts, the sale was never
perfected. In fact, the downpayment was
returned by respondent spouses and was
accepted by petitioner. The Court of
Appeals also stressed that the authority of
the court to allow sale or encumbrance of
a conjugal property without the consent of
the other spouse is applicable only in
cases where the said spouse is
incapacitated or otherwise unable to
participate in the administration of the
conjugal property.
Hence,
the
present
assigning the following errors:

recourse

THE HONORABLE COURT OF


APPEALS GRIEVIOUSLY ERRED IN
RENDERING SUMMARY JUDGMENT
IN DISMISSING THE COMPLAINT
ENTIRELY AND ORDERING THE
CANCELLATION OF NOTICE OF LIS
PENDENS ON THE TITLES OF THE
SUBJECT REAL PROPERTIES;
THE HONORABLE COURT OF
APPEALS GRIEVIOUSLY ERRED IN
FAILING TO CONSIDER THAT THE
SALE OF REAL PROPERTIES BY
RESPONDENTS TO PETITIONER
HAVE ALREADY BEEN PERFECTED,
FOR AFTER THE LATTER PAID
P300,000.00 DOWNPAYMENT,
RESPONDENT MRS. CAMAISA

NEVER OBJECTED TO
STIPULATIONS WITH RESPECT TO
PRICE, OBJECT AND TERMS OF
PAYMENT IN THE CONTRACT TO
SELL ALREADY SIGNED BY THE
PETITIONER, RESPONDENT MR.
CAMAISA AND WITNESSES
MARKED AS ANNEX G IN THE
COMPLAINT EXCEPT, FOR MINOR
PROVISIONS ALREADY IMPLIED BY
LAW, LIKE EJECTMENT OF
TENANTS, SUBDIVISION OF TITLE
AND RESCISSION IN CASE OF
NONPAYMENT, WHICH PETITIONER
READILY AGREED AND ACCEDED
TO THEIR INCLUSION;
THE HONORABLE COURT OF
APPEALS GRIEVIOUSLY ERRED
WHEN IT FAILED TO CONSIDER
THAT CONTRACT OF SALE IS
CONSENSUAL AND IT IS
PERFECTED BY THE MERE
CONSENT OF THE PARTIES AND THE
APPLICABLE PROVISIONS ARE
ARTICLES 1157, 1356, 1357, 1358,
1403, 1405 AND 1475 OF THE CIVIL
CODE OF THE PHILIPPINES AND
GOVERNED BY THE STATUTE OF
FRAUD.[23]
The Court does not find error in the
decisions of both the trial court and the
Court of Appeals.
Petitioner alleges that the trial court
erred when it entered a summary
judgment in favor of respondent
spouses there being a genuine issue of
fact. Petitioner maintains that the issue of
whether the contracts to sell between
petitioner and respondent spouses was

perfected is a question of
necessitating a trial on the merits.

fact

The Court does not agree. A summary


judgment is one granted by the court
upon motion by a party for an expeditious
settlement of a case, there appearing
from
the
pleadings,
depositions,
admissions and affidavits that there are
no important questions or issues of fact
involved, and that therefore the moving
party is entitled to judgment as a matter of
law. A perusal of the pleadings
submitted by both parties show that there
is no genuine controversy as to the facts
involved therein.
[24]

Both parties admit that there were


negotiations for the sale of four parcels of
land between petitioner and respondent
spouses;
that petitioner
and
respondent Edilberto Camaisa came
to
an agreement as to the price and the
terms
of
payment,
and
a downpaymentwas paid by petitioner to
the latter; and that respondent Norma
refused to sign the contracts to sell. The
issue thus posed for resolution in the trial
court was whether or not the contracts to
sell between petitioner and respondent
spouses were already perfected such that
the latter could no longer back out of the
agreement.
The law requires that the disposition
of a conjugal property by the husband as
administrator in appropriate cases
requires the written consent of the wife,
otherwise, the disposition is void. Thus,
Article 124 of the Family Code provides:
Art. 124. The administration and enjoyment of
the conjugal partnership property shall belong

to both spouses jointly. In case of


disagreement, the husbands decision shall
prevail, subject to recourse to the court by the
wife for a proper remedy, which must be
availed of within five years from the date of
the contract implementing such decision.
In the event that one spouse is incapacitated or
otherwise unable to participate in the
administration of the conjugal properties, the
other spouse may assume sole powers of
administration. These powers do not include
the powers of disposition or encumbrance
which must have the authority of the court or
the written consent of the other spouse. In the
absence of such authority or consent the
disposition or encumbrance shall be
void. However, the transaction shall be
construed as a continuing offer on the part of
the consenting spouse and the third person,
and may be perfected as a binding contract
upon the acceptance by the other spouse or
authorization by the court before the offer is
withdrawn by either or
both offerors. (Underscoring ours.)
The properties subject of the contracts
in this case were conjugal; hence, for the
contracts to sell to be effective, the
consent of both husband and wife must
concur.
Respondent
Norma Camaisa admittedly did not give
her written consent to the sale. Even
granting that respondent Norma actively
participated in negotiating for the sale of
the subject properties, which she denied,
her written consent to the sale is required
by law for its validity. Significantly,
petitioner herself admits that Norma
refused to sign the contracts to sell.
Respondent Norma may have been

aware of the negotiations for the sale of


their conjugal properties. However, being
merely aware of a transaction is not
consent.

SO ORDERED.
FERRER V FERRER

[25]

Finally, petitioner argues that since


respondent Norma unjustly refuses to
affix her signatures to the contracts to
sell, court authorization under Article 124
of the Family Code is warranted.
The argument is bereft of merit.
Petitioner is correct insofar as she alleges
that if the written consent of the other
spouse cannot be obtained or is being
withheld, the matter may be brought to
court which will give such authority if the
same is warranted by the circumstances.
However, it should be stressed that court
authorization under Art. 124 is only
resorted to in cases where the spouse
who does not give consent is
incapacitated. In this case, petitioner
failed to allege and prove that respondent
Norma was incapacitated to give her
consent to the contracts. In the absence
of such showing of the wifes incapacity,
court authorization cannot be sought.
[26]

Under the foregoing facts, the motion


for summary judgment was proper
considering that there was no genuine
issue as to any material fact. The only
issue to be resolved by the trial court was
whether the contract to sell involving
conjugal properties was valid without the
written consent of the wife.
WHEREFORE, the petition is hereby
DENIED and the decision of the Court of
Appeals dated November 29, 2000 in CAG.R. CV No. 43421 AFFIRMED.

DECISION
CHICO-NAZARIO, J.:
Before this Court is an Appeal
by Certiorari which assails the Decision[1] of
the Court of Appeals dated 16 August
2004 in CA-G.R. SP No. 78525, reversing
and setting aside the Order [2] dated 16
December 2002 of the Regional Trial Court
(RTC),Mandaluyong City, Branch 212 in
Civil Case No. MC02-1780. The Court of
Appeals ordered the dismissal of the
Complaint[3] filed by petitioner Josefa
Bautista Ferrer against respondents Sps.
Manuel M. Ferrer and Virginia Ferrer, and
Sps. Ismael M. Ferrer and Flora Ferrer in the
aforesaid Civil Case No. MC02-1780.
In her Complaint for payment of
conjugal improvements, sum of money, and
accounting with prayer for injunction and
damages, petitioner alleged that she is the
widow of Alfredo Ferrer (Alfredo), a halfbrother of respondents Manuel M. Ferrer
(Manuel)
and
Ismael
M.
Ferrer
(Ismael). Before her marriage to Alfredo, the
latter acquired a piece of lot, covered by
Transfer Certificate of Title (TCT) No.
67927.[4] He applied for a loan with the
Social Security System (SSS) to build
improvements
thereon,
including
a
residential house and a two-door apartment
building. However, it was during their
marriage that payment of the loan was made
using the couples conjugal funds. From their

conjugal funds, petitioner posited, they


constructed
a
warehouse
on
the
lot. Moreover, petitioner averred that
respondent Manuel occupied one door of the
apartment building, as well as the
warehouse; however, in September 1991, he
stopped paying rentals thereon, alleging that
he had acquired ownership over the property
by virtue of a Deed of Sale executed by
Alfredo in favor of respondents, Manuel and
Ismael and their spouses. TCT No. 67927
was cancelled, and TCT. No. 2728 was
issued and registered in the names of
respondents.
It is petitioners contention that on 2
October 1989, when her husband was
already bedridden, respondents Ismael and
Flora Ferrer made him sign a document,
purported to be his last will and
testament. The document, however, was a
Deed of Sale covering Alfredos lot and the
improvements thereon. Learning of this
development, Alfredo filed with the RTC of
Pasig, a Complaint for Annulment of the
said sale against respondents, docketed as
Civil Case No. 61327.[5] On 22 June 1993,
the RTC dismissed the same.[6] The RTC
found that the terms and conditions of the
Deed of Sale are not contrary to law, morals,
good customs, and public policy, and should
be complied with by the parties in good
faith, there being no compelling reason
under the law to do otherwise. The dismissal
was
affirmed
by
the
Court
of
Appeals. Subsequently, on 7 November
1994, this Court, in G.R. No. L-117067,
finding no reversible error committed by the
appellate court in affirming the dismissal of

the RTC, affirmed the Decision of the Court


of Appeals.[7]
Further, in support of her Complaint,
petitioner alluded to a portion of the
Decision dated 22 June 1993 of the RTC in
Civil Case No. 61327, which stated, to wit:
In determining which property is
the principal and which is the
accessory, the property of greater
value shall be considered the
principal. In this case, the lot is
the
principal
and
the
improvements
the
accessories. Since Article 120 of
the Family Code provides the
rule that the ownership of
accessory follows the ownership
of the principal, then the subject
lot with all its improvements
became an exclusive and capital
property of Alfredo with an
obligation to reimburse the
conjugal partnership of the cost
of improvements at the time of
liquidation of [the] conjugal
partnership. Clearly, Alfredo has
all the rights to sell the subject
property by himself without need
of Josefas consent.[8]

According to petitioner, the ruling of


the RTC shows that, when Alfredo died
on 29 September 1999, or at the time of the
liquidation of the conjugal partnership, she
had the right to be reimbursed for the cost of
the improvements on Alfredos lot.She
alleged that the cost of the improvements
amounted to P500,000.00; hence, one-half
thereof should be reimbursed and paid by
respondents as they are now the registered

owners of Alfredos lot. She averred that


respondents cannot claim lack of knowledge
about the fact that the improvements were
constructed using conjugal funds as they had
occupied one of the apartment buildings on
Alfredos lot, and even paid rentals to
petitioner. In addition, petitioner prayed that
respondents be ordered to render an
accounting from September, 1991, on the
income of the boarding house constructed
thereon which they had appropriated for
themselves, and to remit one-half thereof as
her share. Finally, petitioner sought from
respondents moral and exemplary damages,
litigation and incidental expenses.
For their part, respondents filed a
Motion to Dismiss,[9] contending that
petitioner had no cause of action against
them, and that the cause of action was
barred by prior judgment.
On 16 December 2002, the RTC
rendered an Order,[10] denying the Motion to
Dismiss. According to the RTC, no
pronouncement as to the improvements
constructed on Alfredos lot has been made
in Civil Case No. 61327, and the payment of
petitioners share in the conjugal partnership
constitutes a separate cause of action. A
subsequent
Order[11] dated 17
January
2003 was issued by the RTC, denying
respondents Motion for Reconsideration.
Aggrieved, respondents elevated the
case to the Court of Appeals by way of a
Petition for Certiorari, alleging grave abuse
of discretion amounting to lack or excess of
jurisdiction on the RTC in denying the
dismissal.

On 16 August 2004, the Court of Appeals


rendered a Decision granting the Petition. It
held that petitioners Complaint failed to
state a cause of action. The appellate court
rationalized as follows:
[W]e believe that the instant
complaint is not the proper
action for the respondent to
enforce
her
right
of
reimbursement of the cost of the
improvement[s] on the subject
property. As correctly pointed
out by the petitioners, the same
should be made and directed in
the settlement of estate of her
deceased husband Alfredo Ferrer
pursuant to Article 129[12] of the
Family Code. Such being the
case, it appears that the
complaint herein fails to state a
cause of action against the
petitioners, the latter not being
the proper parties against whom
the
subject
action
for
reimbursement must be directed
to. A complaint states a cause of
action where it contains three
essential elements of a cause of
action, namely: (1) the legal
right of the plaintiff; (2) the
correlative obligation of the
defendant, and (3) the act or
omission of the defendant in
violation of said legal right. If
these elements are absent, the
complaint becomes vulnerable to
a motion to dismiss on the
ground of failure to state a cause
of action. Albeit the respondent
herein has the legal right to be
reimbursed of the cost of the
improvements of the subject
property, it is not the petitioners

but the estate of her deceased


husband
which
has
the
obligation to pay the same. The
complaint herein is therefore
dismissible for failure to state a
cause of action against the
petitioners. Needless to say, the
respondent is not without any
further recourse as she may file
her claim against the estate of
her deceased husband.
In light of the foregoing, we find
that the public respondent
committed grave abuse of
discretion in denying the
petitioners motion to dismiss for
failure to state a cause of action.
[13]

Aggrieved, petitioner filed a Motion


for Reconsideration thereon. However,
on 17 December 2004, the Court of Appeals
rendered a Resolution[14] denying the
motion.
Hence, the present recourse.
Petitioner submits the following
grounds for the allowance of the instant
Petition, to wit:
A.
THE
HONORABLE
COURT OF APPEALS ERRED
IN
RULING
THAT
PETITIONERS COMPLAINT
FAILS TO STATE A CAUSE
OF ACTION AGAINST THE
RESPONDENTS,
THE
LATTER NOT BEING THE
PROPER PARTIES AGAINST
WHOM
THE
SUBJECT
ACTION
FOR

REIMBURSEMENT MUST BE
DIRECTED TO.
B. THE HONORABLE COURT
OF APPEALS ERRED IN
RULING THAT THE PUBLIC
RESPONDENT,
HON.
RIZALINA T. CAPCO-UMALI,
COMMITTED GRAVE ABUSE
OF
DISCRETION
IN
DENYING
THE
[RESPONDENTS]
MOTION
TO DISMISS FOR FAILURE
TO STATE A CAUSE OF
ACTION.[15]

Both arguments raise the sole issue of


whether the Court of Appeals erred in
dismissing petitioners Complaint for failure
to state a cause of action.
Section 1(g) Rule 16[16] of the 1997 Rules of
Civil Procedure makes it clear that failure to
make a sufficient allegation of a cause of
action in the complaint warrants the
dismissal thereof. Section 2, Rule 2 of the
1997 Rules of Civil Procedure defines a
cause of action as the act or omission by
which a party violates the right of another. It
is the delict or the wrongful act or omission
committed by the defendant in violation of
the primary right of the plaintiff.[17]
A cause of action has the following
essential elements, viz:
(1) A right in favor of the plaintiff by
whatever means and under
whatever law it arises or is
created;

(2) An obligation on the part of the


named defendant to respect
or not to violate such right;
and

(3) Act or omission on the part


of
such
defendant
in violation of the right
of the
plaintiff
or
constituting a breach of
the obligation of the
defendant to the plaintiff
for which the latter may
maintain an action for
recovery of damages or
other appropriate relief.[18]

A complaint states a cause of action


only when it has the three indispensable
elements.[19]
In the determination of the presence
of these elements, inquiry is confined to the
four corners of the complaint. Only the
statements in the Complaint may be
properly considered.[20] The absence of any
of these elements makes a complaint
vulnerable to a Motion to Dismiss on the
ground of a failure to state a cause of action.
[21]

After a reading of the allegations


contained in petitioners Complaint, we are
convinced that the same failed to state a
cause of action.
In the case at bar, petitioner asserts a
legal right in her favor by relying on the
Decision of the RTC in Civil Case No.
61327. It can be recalled that the aforesaid
case is an action for Annulment filed by
Alfredo and petitioner against the

respondents to seek annulment of the Deed


of Sale, executed by Alfredo in respondents
favor and covering the herein subject
premises. The Complaint was dismissed by
the RTC, and subsequently affirmed by the
Court of Appeals and by this Court in G.R.
No. L-117067.
According to petitioner, while the
RTC in Civil Case No. 61327 recognized
that the improvements constructed on
Alfredos lots were deemed as Alfredos
exclusive and capital property, the court also
held that petitioner, as Alfredos spouse, has
the right to claim reimbursement from the
estate of Alfredo. It is argued by petitioner
that her husband had no other property, and
his only property had been sold to the
respondents; hence, she has the legal right to
claim for reimbursement from the
respondents who are now the owners of the
lot and the improvements thereon. In fine,
petitioner asseverates that the Complaint
cannot be dismissed on the ground of failure
to state a cause of action because the
respondents have the correlative obligation
to pay the value of the improvements.
Petitioner was not able to show that
there is an obligation on the part of the
respondents to respect or not to violate her
right. While we could concede that Civil
Case No. 61327 made a reference to the
right of the spouse as contemplated in
Article 120[22] of the Family Code to be
reimbursed for the cost of the
improvements, the obligation to reimburse
rests on the spouse upon whom ownership
of the entire property is vested. There is no
obligation on the part of the purchaser of the

property, in case the property is sold by the


owner-spouse.
Indeed, Article 120 provides the
solution in determining the ownership of the
improvements that are made on the separate
property of the spouses at the expense of the
partnership or through the acts or efforts of
either or both spouses. Thus, when the cost
of the improvement and any resulting
increase in value are more than the value of
the property at the time of the improvement,
the entire property of one of the spouses
shall belong to the conjugal partnership,
subject to reimbursement of the value of the
property of the owner-spouse at the time of
the improvement; otherwise, said property
shall be retained in ownership by the ownerspouse, likewise subject to reimbursement of
the cost of the improvement. The subject
property was precisely declared as the
exclusive property of Alfredo on the basis of
Article 120 of the Family Code.
What is incontrovertible is that the
respondents,
despite
the
allegations
contained in the Complaint that they are the
buyers of the subject premises, are not
petitioners spouse nor can they ever be
deemed as the owner-spouse upon whom the
obligation to reimburse petitioner for her
costs rested. It is the owner-spouse who has
the obligation to reimburse the conjugal
partnership or the spouse who expended the
acts or efforts, as the case may
be. Otherwise stated, respondents do not
have the obligation to respect petitioners
right to be reimbursed.

On this matter, we do not find an act or


omission on the part of respondents in
violation of petitioners rights. The right of
the respondents to acquire as buyers the
subject premises from Alfredo under the
assailed Deed of Sale in Civil Case No.
61327 had been laid to rest. This is because
the validity of the Deed of Sale had already
been determined and upheld with
finality. The same had been similarly
admitted by petitioner in her Complaint. It
can be said, thus, that respondents act of
acquiring the subject property by sale was
not in violation of petitioners rights. The
same can also be said of the respondents
objection to reimburse petitioner. Simply, no
correlative obligation exists on the part of
the respondents to reimburse
the
petitioner. Corollary thereto, neither can it
be said that their refusal to reimburse
constituted a violation of petitioners
rights. As has been shown in the foregoing,
no obligation by the respondents under the
law exists. Petitioners Complaint failed to
state a cause of action against the
respondents, and for this reason, the Court
of Appeals was not in error in dismissing the
same.
WHEREFORE, the
Petition
is DENIED. The Decision dated 16 August
2004 and the Resolution dated 17 December
2004 of the Court of Appeals in CA G.R. SP.
No.
78525
are AFFIRMED. Costs de
oficio.
SO ORDERED.

MULLER V MULLER

DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari 1 assails the
February 26, 2001 Decision 2 of the Court of Appeals
in CA-G.R. CV No. 59321 affirming with modification
the August 12, 1996 Decision 3 of the Regional Trial
Court of Quezon City, Branch 86 in Civil Case No. Q94-21862, which terminated the regime of absolute
community of property between petitioner and
respondent, as well as the Resolution 4 dated August
13, 2001 denying the motion for reconsideration.
The facts are as follows:
Petitioner Elena Buenaventura Muller and respondent
Helmut Muller were married in Hamburg, Germany on
September 22, 1989. The couple resided in Germany
at a house owned by respondents parents but
decided to move and reside permanently in the
Philippines in 1992. By this time, respondent had
inherited the house in Germany from his parents
which he sold and used the proceeds for the
purchase of a parcel of land in Antipolo, Rizal at the
cost of P528,000.00 and the construction of a house
amounting to P2,300,000.00. The Antipolo property
was registered in the name of petitioner under
Transfer Certificate of Title No. 219438 5 of the
Register of Deeds of Marikina, Metro Manila.
Due to incompatibilities and respondents alleged
womanizing, drinking, and maltreatment, the spouses
eventually separated. On September 26, 1994,
respondent filed a petition 6 for separation of
properties before the Regional Trial Court of Quezon
City.
On August 12, 1996, the trial court rendered a
decision which terminated the regime of absolute
community of property between the petitioner and
respondent. It also decreed the separation of
properties between them and ordered the equal
partition of personal properties located within the
country, excluding those acquired by gratuitous title
during the marriage. With regard to the Antipolo
property, the court held that it was acquired using
paraphernal funds of the respondent. However, it
ruled that respondent cannot recover his funds
because the property was purchased in violation of
Section 7, Article XII of the Constitution. Thus
However, pursuant to Article 92 of the Family Code,
properties acquired by gratuitous title by either

spouse during the marriage shall be excluded from


the community property. The real property, therefore,
inherited by petitioner in Germany is excluded from
the absolute community of property of the herein
spouses. Necessarily, the proceeds of the sale of said
real property as well as the personal properties
purchased thereby, belong exclusively to the
petitioner. However, the part of that inheritance used
by the petitioner for acquiring the house and lot in this
country cannot be recovered by the petitioner, its
acquisition being a violation of Section 7, Article XII of
the Constitution which provides that "save in cases of
hereditary succession, no private lands shall be
transferred or conveyed except to individuals,
corporations or associations qualified to acquire or
hold lands of the public domain." The law will leave
the parties in the situation where they are in without
prejudice to a voluntary partition by the parties of the
said real property. x x x
xxxx
As regards the property covered by Transfer
Certificate of Title No. 219438 of the Registry of
Deeds of Marikina, Metro Manila, situated in Antipolo,
Rizal and the improvements thereon, the Court shall
not make any pronouncement on constitutional
grounds. 7
Respondent appealed to the Court of Appeals which
rendered the assailed decision modifying the trial
courts Decision. It held that respondent merely
prayed for reimbursement for the purchase of the
Antipolo property, and not acquisition or transfer of
ownership to him. It also considered petitioners
ownership over the property in trust for the
respondent. As regards the house, the Court of
Appeals ruled that there is nothing in the Constitution
which prohibits respondent from acquiring the same.
The dispositive portion of the assailed decision reads:
WHEREFORE, in view of the foregoing, the Decision
of the lower court dated August 12, 1996 is hereby
MODIFIED. Respondent Elena Buenaventura Muller
is hereby ordered to REIMBURSE the petitioner the
amount of P528,000.00 for the acquisition of the land
and the amount of P2,300,000.00 for the construction
of the house situated in Atnipolo, Rizal, deducting
therefrom the amount respondent spent for the
preservation, maintenance and development of the
aforesaid real property including the depreciation cost
of the house or in the alternative to SELL the house
and lot in the event respondent does not have the
means to reimburse the petitioner out of her own

money and from the proceeds thereof, reimburse the


petitioner of the cost of the land and the house
deducting the expenses for its maintenance and
preservation spent by the respondent. Should there
be profit, the same shall be divided in proportion to
the equity each has over the property. The case is
REMANDED to the lower court for reception of
evidence as to the amount claimed by the
respondents for the preservation and maintenance of
the property.

petitioner; that the funds were given to petitioner in


trust; and that equity demands that respondent should
be reimbursed of his personal funds.
The issue for resolution is whether respondent is
entitled to reimbursement of the funds used for the
acquisition of the Antipolo property.
The petition has merit.
Section 7, Article XII of the 1987 Constitution states:

SO ORDERED. 8
Hence, the instant petition for review raising the
following issues:

Save in cases of hereditary succession, no private


lands shall be transferred or conveyed except to
individuals, corporations, or associations qualified to
acquire or hold lands of the public domain.

I
THE HONORABLE COURT OF APPEALS GRAVELY
ERRED IN HOLDING THAT THE RESPONDENT
HEREIN IS ENTITLED TO REIMBURSEMENT OF
THE AMOUNT USED TO PURCHASE THE LAND AS
WELL AS THE COSTS FOR THE CONSTRUCTION
OF THE HOUSE, FOR IN SO RULING, IT
INDIRECTLY ALLOWED AN ACT DONE WHICH
OTHERWISE COULD NOT BE DIRECTLY x x x
DONE, WITHOUT DOING VIOLENCE TO THE
CONSTITUTIONAL PROSCRIPTION THAT AN
ALIEN IS PROHIBITED FROM ACQUIRING
OWNERSHIP OF REAL PROPERTIES LOCATED IN
THE PHILIPPINES.
II
THE COURT OF APPEALS GRAVELY ERRED IN
SUSTAINING RESPONDENTS CAUSE OF ACTION
WHICH IS ACTUALLY A DESPERATE ATTEMPT TO
OBTAIN OWNERSHIP OVER THE LOT IN
QUESTION, CLOTHED UNDER THE GUISE OF
CLAIMING REIMBURSEMENT.
Petitioner contends that respondent, being an alien, is
disqualified to own private lands in the Philippines;
that respondent was aware of the constitutional
prohibition but circumvented the same; and that
respondents purpose for filing an action for
separation of property is to obtain exclusive
possession, control and disposition of the Antipolo
property.
Respondent claims that he is not praying for transfer
of ownership of the Antipolo property but merely
reimbursement; that the funds paid by him for the said
property were in consideration of his marriage to

Aliens, whether individuals or corporations, are


disqualified from acquiring lands of the public domain.
Hence, they are also disqualified from acquiring
private lands. 9 The primary purpose of the
constitutional provision is the conservation of the
national patrimony. In the case of Krivenko v. Register
of Deeds, 10 the Court held:
Under section 1 of Article XIII of the Constitution,
"natural resources, with the exception of public
agricultural land, shall not be alienated," and with
respect to public agricultural lands, their alienation is
limited to Filipino citizens. But this constitutional
purpose conserving agricultural resources in the
hands of Filipino citizens may easily be defeated by
the Filipino citizens themselves who may alienate
their agricultural lands in favor of aliens. It is partly to
prevent this result that section 5 is included in Article
XIII, and it reads as follows:
"Sec. 5. Save in cases of hereditary succession, no
private agricultural land will be transferred or assigned
except to individuals, corporations, or associations
qualified to acquire or hold lands of the public domain
in the Philippines."
This constitutional provision closes the only remaining
avenue through which agricultural resources may leak
into aliens hands. It would certainly be futile to
prohibit the alienation of public agricultural lands to
aliens if, after all, they may be freely so alienated
upon their becoming private agricultural lands in the
hands of Filipino citizens. x x x
xxxx

If the term "private agricultural lands" is to be


construed as not including residential lots or lands not
strictly agricultural, the result would be that "aliens
may freely acquire and possess not only residential
lots and houses for themselves but entire
subdivisions, and whole towns and cities," and that
"they may validly buy and hold in their names lands of
any area for building homes, factories, industrial
plants, fisheries, hatcheries, schools, health and
vacation resorts, markets, golf courses, playgrounds,
airfields, and a host of other uses and purposes that
are not, in appellants words, strictly agricultural."
(Solicitor Generals Brief, p. 6.) That this is obnoxious
to the conservative spirit of the Constitution is beyond
question.
Respondent was aware of the constitutional
prohibition and expressly admitted his knowledge
thereof to this Court. 11 He declared that he had the
Antipolo property titled in the name of petitioner
because of the said prohibition. 12 His attempt at
subsequently asserting or claiming a right on the said
property cannot be sustained.
The Court of Appeals erred in holding that an implied
trust was created and resulted by operation of law in
view of petitioners marriage to respondent. Save for
the exception provided in cases of hereditary
succession, respondents disqualification from owning
lands in the Philippines is absolute. Not even an
ownership in trust is allowed. Besides, where the
purchase is made in violation of an existing statute
and in evasion of its express provision, no trust can
result in favor of the party who is guilty of the
fraud. 13 To hold otherwise would allow circumvention
of the constitutional prohibition.
Invoking the principle that a court is not only a court of
law but also a court of equity, is likewise misplaced. It
has been held that equity as a rule will follow the law
and will not permit that to be done indirectly which,
because of public policy, cannot be done
directly. 14 He who seeks equity must do equity, and
he who comes into equity must come with clean
hands. The latter is a frequently stated maxim which
is also expressed in the principle that he who has
done inequity shall not have equity. It signifies that a
litigant may be denied relief by a court of equity on the
ground that his conduct has been inequitable, unfair
and dishonest, or fraudulent, or deceitful as to the
controversy in issue. 15
Thus, in the instant case, respondent cannot seek
reimbursement on the ground of equity where it is

clear that he willingly and knowingly bought the


property despite the constitutional prohibition.
Further, the distinction made between transfer of
ownership as opposed to recovery of funds is a futile
exercise on respondents part. To allow
reimbursement would in effect permit respondent to
enjoy the fruits of a property which he is not allowed
to own. Thus, it is likewise proscribed by law. As
expressly held in Cheesman v. Intermediate Appellate
Court: 16
Finally, the fundamental law prohibits the sale to
aliens of residential land. Section 14, Article XIV of the
1973 Constitution ordains that, "Save in cases of
hereditary succession, no private land shall be
transferred or conveyed except to individuals,
corporations, or associations qualified to acquire or
hold lands of the public domain." Petitioner Thomas
Cheesman was, of course, charged with knowledge of
this prohibition. Thus, assuming that it was his
intention that the lot in question be purchased by him
and his wife, he acquired no right whatever over the
property by virtue of that purchase; and in attempting
to acquire a right or interest in land, vicariously and
clandestinely, he knowingly violated the Constitution;
the sale as to him was null and void. In any event, he
had and has no capacity or personality to question the
subsequent sale of the same property by his wife on
the theory that in so doing he is merely exercising the
prerogative of a husband in respect of conjugal
property. To sustain such a theory would permit
indirect controversion of the constitutional prohibition.
If the property were to be declared conjugal, this
would accord to the alien husband a not insubstantial
interest and right over land, as he would then have a
decisive vote as to its transfer or disposition. This is a
right that the Constitution does not permit him to
have.
As already observed, the finding that his wife had
used her own money to purchase the property cannot,
and will not, at this stage of the proceedings be
reviewed and overturned. But even if it were a fact
that said wife had used conjugal funds to make the
acquisition, the considerations just set out to militate,
on high constitutional grounds, against his recovering
and holding the property so acquired, or any part
thereof. And whether in such an event, he may
recover from his wife any share of the money used for
the purchase or charge her with unauthorized
disposition or expenditure of conjugal funds is not
now inquired into; that would be, in the premises, a
purely academic exercise. (Emphasis added)

WHEREFORE, in view of the foregoing, the instant


petition is GRANTED. The Decision dated February
26, 2001 of the Court of Appeals in CA-G.R. CV No.
59321 ordering petitioner Elena Buenaventura Muller
to reimburse respondent Helmut Muller the amount of
P528,000 for the acquisition of the land and the
amount of P2,300,000 for the construction of the
house in Antipolo City, and the Resolution dated
August 13, 2001 denying reconsideration thereof, are
REVERSED and SET ASIDE. The August 12, 1996
Decision of the Regional Trial Court of Quezon City,
Branch 86 in Civil Case No. Q-94-21862 terminating
the regime of absolute community between the
petitioner and respondent, decreeing a separation of
property between them and ordering the partition of
the personal properties located in the Philippines
equally, is REINSTATED.
SO ORDERED.

BEUMER V BEUMER

DECISION PERLAS-BERNABE, J: Before the


Court is a Petition for Review on Certiorari 1
under Rule 45 of the Rules of CoLlli assailing
the October 8, 2009 Decision1 and January
24, 20 II Resolution3 of the court of Appeals
(CA) in CA-G.R. CV No. 01940, which affirmed
the February 28, 2007 Decision4 of the
Regional Trial Court (RTC) of Negros Oriental,
Branch 34 in Civil Case No. I 2884. The
foregoing rulings dissolved the conjugal
partnership of gains of Will em Rollo. pp. 1125. Penned by Acting Executive Justice
Franchito N. Diamante, with Associate
Justices Edgarclo L. Delos Santos and Samuel
II. Gaerlan, concurring. lcl. at 26-38. Penned
by Associate Justice Edgardo L. Delos Santos,
with Associate Justices Agnes Reyes-Carpio
and Eduardo B. Peralta, Jr., concurring. I d. at
45-46. Penned by Judge Rosendo B. Banda!,
Jr. ld. at 80-86. Decision 2 G.R. No. 195670
Beumer (petitioner) and Avelina Amores
(respondent) and distributed the properties
forming part of the said property regime. The
Factual Antecedents Petitioner, a Dutch
National, and respondent, a Filipina, married
in March 29, 1980. After several years, the
RTC of Negros Oriental, Branch 32, declared
the nullity of their marriage in the Decision5
dated November 10, 2000 on the basis of the
formers psychological incapacity as
contemplated in Article 36 of the Family
Code. Consequently, petitioner filed a
Petition for Dissolution of Conjugal

Partnership6 dated December 14, 2000


praying for the distribution of the following
described properties claimed to have been
acquired during the subsistence of their
marriage, to wit: By Purchase: a. Lot 1, Block
3 of the consolidated survey of Lots 2144 &
2147 of the Dumaguete Cadastre, covered
by Transfer Certificate of Title (TCT) No.
22846, containing an area of 252 square
meters (sq.m.), including a residential house
constructed thereon. b. Lot 2142 of the
Dumaguete Cadastre, covered by TCT No.
21974, containing an area of 806 sq.m.,
including a residential house constructed
thereon. c. Lot 5845 of the Dumaguete
Cadastre, covered by TCT No. 21306,
containing an area of 756 sq.m. d. Lot 4,
Block 4 of the consolidated survey of Lots
2144 & 2147 of the Dumaguete Cadastre,
covered by TCT No. 21307, containing an
area of 45 sq.m. 5 See Annex E of the
Petition. Penned by Judge Eleuterio E. Chiu
(Civil Case No. 11754). Id. at 53- 62. 6 Annex
E of the Petition. Id. at 47-52. Decision 3
G.R. No. 195670 By way of inheritance: e. 1/7
of Lot 2055-A of the Dumaguete Cadastre,
covered by TCT No. 23567, containing an
area of 2,635 sq.m. (the area that appertains
to the conjugal partnership is 376.45 sq.m.).
f. 1/15 of Lot 2055-I of the Dumaguete
Cadastre, covered by TCT No. 23575,
containing an area of 360 sq.m. (the area
that appertains to the conjugal partnership is
24 sq.m.).7 In defense,8 respondent averred
that, with the exception of their two (2)
residential houses on Lots 1 and 2142, she
and petitioner did not acquire any conjugal
properties during their marriage, the truth
being that she used her own personal money
to purchase Lots 1, 2142, 5845 and 4 out of
her personal funds and Lots 2055-A and
2055-I by way of inheritance.9 She submitted
a joint affidavit executed by her and
petitioner attesting to the fact that she
purchased Lot 2142 and the improvements
thereon using her own money.10
Accordingly, respondent sought the dismissal
of the petition for dissolution as well as
payment for attorneys fees and litigation
expenses.11 During trial, petitioner testified
that while Lots 1, 2142, 5845 and 4 were
registered in the name of respondent, these
properties were acquired with the money he
received from the Dutch government as his
disability benefit12 since respondent did not
have sufficient income to pay for their

acquisition. He also claimed that the joint


affidavit they submitted before the Register
of Deeds of Dumaguete City was contrary to
Article 89 of the Family Code, hence, invalid.
13 7 Id. at 48-49a. 8 See attached as Annex
E of the Petitioner. Respondents Answer.
Id. at 76-79. 9 Id. at 76. 10 Id. at 79. 11 Id. at
77. 12 Id. at 81. 13 Id. at 82. Decision 4 G.R.
No. 195670 For her part, respondent
maintained that the money used for the
purchase of the lots came exclusively from
her personal funds, in particular, her
earnings from selling jewelry as well as
products from Avon, Triumph and
Tupperware.14 She further asserted that
after she filed for annulment of their
marriage in 1996, petitioner transferred to
their second house and brought along with
him certain personal properties, consisting of
drills, a welding machine, grinders, clamps,
etc. She alleged that these tools and
equipment have a total cost of
P500,000.00.15 The RTC Ruling On February
28, 2007, the RTC of Negros Oriental, Branch
34 rendered its Decision, dissolving the
parties conjugal partnership, awarding all
the parcels of land to respondent as her
paraphernal properties; the tools and
equipment in favor of petitioner as his
exclusive properties; the two (2) houses
standing on Lots 1 and 2142 as co-owned by
the parties, the dispositive of which reads:
WHEREFORE, judgment is hereby rendered
granting the dissolution of the conjugal
partnership of gains between petitioner
Willem Beumer and [respondent] Avelina
Amores considering the fact that their
marriage was previously annulled by Branch
32 of this Court. The parcels of land covered
by Transfer Certificate of Titles Nos. 22846,
21974, 21306, 21307, 23567 and 23575 are
hereby declared paraphernal properties of
respondent Avelina Amores due to the fact
that while these real properties were
acquired by onerous title during their marital
union, Willem Beumer, being a foreigner, is
not allowed by law to acquire any private
land in the Philippines, except through
inheritance. The personal properties, i.e.,
tools and equipment mentioned in the
complaint which were brought out by Willem
from the conjugal dwelling are hereby
declared to be exclusively owned by the
petitioner. The two houses standing on the
lots covered by Transfer Certificate of Title
Nos. 21974 and 22846 are hereby declared

to be coowned by the petitioner and the


respondent since these were acquired 14 Id.
15 Id. Decision 5 G.R. No. 195670 during
their marital union and since there is no
prohibition on foreigners from owning
buildings and residential units. Petitioner and
respondent are, thereby, directed to subject
this court for approval their project of
partition on the two house[s]
aforementioned. The Court finds no sufficient
justification to award the counterclaim of
respondent for attorneys fees considering
the well settled doctrine that there should be
no premium on the right to litigate. The
prayer for moral damages are likewise
denied for lack of merit. No pronouncement
as to costs. SO ORDERED.16 It ruled that,
regardless of the source of funds for the
acquisition of Lots 1, 2142, 5845 and 4,
petitioner could not have acquired any right
whatsoever over these properties as
petitioner still attempted to acquire them
notwithstanding his knowledge of the
constitutional prohibition against foreign
ownership of private lands.17 This was made
evident by the sworn statements petitioner
executed purporting to show that the subject
parcels of land were purchased from the
exclusive funds of his wife, the herein
respondent.18 Petitioners plea for
reimbursement for the amount he had paid
to purchase the foregoing properties on the
basis of equity was likewise denied for not
having come to court with clean hands. The
CA Ruling Petitioner elevated the matter to
the CA, contesting only the RTCs award of
Lots 1, 2142, 5845 and 4 in favor of
respondent. He insisted that the money used
to purchase the foregoing properties came
from his own capital funds and that they
were registered in the name of hisformer
wife only 16 Id. at 85-86. 17 Id. at 84, citing
Cheesman v. Intermediate Appellate Court,
G.R. No. 74833, January 21, 1991, 193 SCRA
93, 103. 18 Id. Decision 6 G.R. No. 195670
because of the constitutional prohibition
against foreign ownership. Thus, he prayed
for reimbursement of one-half (1/2) of the
value of what he had paid in the purchase of
the said properties, waiving the other half in
favor of his estranged ex-wife.19 On October
8, 2009, the CA promulgated a Decision20
affirming in toto the judgment rendered by
the RTC of Negros Oriental, Branch 34. The
CA stressed the fact that petitioner was
well-aware of the constitutional prohibition

for aliens to acquire lands in the


Philippines.21 Hence, he cannot invoke
equity to support his claim for
reimbursement. Consequently, petitioner
filed the instant Petition for Review on
Certiorari assailing the CA Decision due to
the following error: UNDER THE FACTS
ESTABLISHED, THE COURT ERRED IN NOT
SUSTAINING THE PETITIONERS ATTEMPT AT
SUBSEQUENTLY ASSERTING OR CLAIMING A
RIGHT OF HALF OR WHOLE OF THE
PURCHASE PRICE USED IN THE PURCHASE OF
THE REAL PROPERTIES SUBJECT OF THIS
CASE.22 (Emphasis supplied) The Ruling of
the Court The petition lacks merit. The issue
to be resolved is not of first impression. In In
Re: Petition For Separation of Property-Elena
Buenaventura Muller v. Helmut Muller23 19
Id. at 91. 20 Id. at 26-38. 21 Id. at 33. 22 Id.
at 17. 23 G.R. No. 149615, August 29, 2006,
500 SCRA 65. Decision 7 G.R. No. 195670 the
Court had already denied a claim for
reimbursement of the value of purchased
parcels of Philippine land instituted by a
foreigner Helmut Muller, against his former
Filipina spouse, Elena Buenaventura Muller. It
held that Helmut Muller cannot seek
reimbursement on the ground of equity
where it is clear that he willingly and
knowingly bought the property despite the
prohibition against foreign ownership of
Philippine land24 enshrined under Section 7,
Article XII of the 1987 Philippine Constitution
which reads: Section 7. Save in cases of
hereditary succession, no private lands shall
be transferred or conveyed except to
individuals, corporations, or associations
qualified to acquire or hold lands of the
public domain. Undeniably, petitioner openly
admitted that he is well aware of the
[above-cited] constitutional prohibition25
and even asseverated that, because of such
prohibition, he and respondent registered the
subject properties in the latters name.26
Clearly, petitioners actuations showed his
palpable intent to skirt the constitutional
prohibition. On the basis of such admission,
the Court finds no reason why it should not
apply the Muller ruling and accordingly, deny
petitioners claim for reimbursement. As also
explained in Muller, the time-honored
principle is that he who seeks equity must do
equity, and he who comes into equity must
come with clean hands. Conversely stated,
he who has done inequity shall not be
accorded equity. Thus, a litigant may be

denied relief by a court of equity on the


ground that his conduct has been
inequitable, unfair and dishonest, or
fraudulent, or deceitful. 27 24 Id. at 72. 25
Rollo, p. 17. 26 Id. at 18. 27 Supra note 23 at
73, citing University of the Philippines v.
Catungal, Jr., 338 Phil. 728, 734-744 (1997).
Decision 8 G.R. No. 195670 In this case,
petitioners statements regarding the real
source of the funds used to purchase the
subject parcels of land dilute the veracity of
his claims: While admitting to have
previously executed a joint affidavit that
respondents personal funds were used to
purchase Lot 1,28 he likewise claimed that
his personal disability funds were used to
acquire the same. Evidently, these
inconsistencies show his untruthfulness.
Thus, as petitioner has come before the
Court with unclean hands, he is now
precluded from seeking any equitable refuge.
In any event, the Court cannot, even on the
grounds of equity, grant reimbursement to
petitioner given that he acquired no right
whatsoever over the subject properties by
virtue of its unconstitutional purchase. It is
wellestablished that equity as a rule will
follow the law and will not permit that to be
done indirectly which, because of public
policy, cannot be done directly.29 Surely, a
contract that violates the Constitution and
the law is null and void, vests no rights,
creates no obligations and produces no legal
effect at all.30 Corollary thereto, under
Article 1412 of the Civil Code,31 petitioner
cannot have the subject properties deeded
to him or allow him to recover the money he
had spent for the purchase thereof. The law
will not aid either party to an illegal contract
or agreement; it leaves the parties where it
finds them.32 Indeed, one cannot salvage
any rights from an unconstitutional
transaction knowingly entered into. 28 Id. at
82. 29 Frenzel v. Catito, G.R. No. 143958, July
11, 2003, 406 SCRA 55, 70. 30 Id. at 69-70,
citing Chavez s. Presidential Commission on
Good Government, 307 SCRA 394 (1998). 31
Re: Art. 1412. If the act in which the unlawful
or forbidden cause consists does not
constitute a criminal offense, the following
rules shall be observed: (1) When the fault is
on the part of both contracting parties,
neither may recover what he has given by
virtue of the contract, or demand the
performance of the other's undertaking x x x
x 32 Id., citing Rellosa v. Hun, 93 Phil. 827

(1953). Decision 9 G.R. No. 195670 Neither


owned by the parties subject to partition.
can the Court grant petitioners claim for
Needless to state, the purpose of the
reimbursement on the basis of unjust
prohibition is to conserve the national
enrichment.33 As held in Frenzel v. Catito, a
patrimoni6 and it is this policy which the
case also involving a foreigner seeking
Court is duty-bound to protect. WHEREFORE,
monetary reimbursement for money spent
the petition is DENIED. Accordingly, the
on purchase of Philippine land, the provision
assailed October 8, 2009 Decision and
on unjust enrichment does not apply if the
January 24, 201 I Resolution of the Court of
action is proscribed by the Constitution, to
Appeals in CA-G.R. CV No. 01940 are
wit: Futile, too, is petitioner's reliance on
AFFIRMED.
Article 22 of the New Civil Code which reads:
Art. 22. Every person who through an act of
NOVERAS V NOVERAS
performance by another, or any other
means, acquires or comes into possession of
DECISION
something at the expense of the latter
without just or legal ground, shall return the
same to him. The provision is expressed in
PEREZ, J.:
the maxim: "MEMO CUM ALTERIUS DETER
DETREMENTO PROTEST" (No person should
Before the Court is a petition for review assailing the 9
May 2008 Decision of the Court of Appeals in CAunjustly enrich himself at the expense of
G.R .. CV No. 88686, which affirmed in part the 8
another). An action for recovery of what has
December 2006 Decision of the Regional Trial Court
been paid without just cause has been
(RTC) of Baler, Aurora, Branch 96.
designated as an accion in rem verso. This
provision does not apply if, as in this case,
The factual antecedents are as follow:
the action is proscribed by the Constitution
or by the application of the pari delicto
David A. Noveras (David) and Leticia T. Noveras
doctrine. It may be unfair and unjust to bar
(Leticia) were married on 3 December 1988 in
the petitioner from filing an accion in rem
Quezon City, Philippines. They resided in California,
verso over the subject properties, or from
United States of America (USA) where they eventually
recovering the money he paid for the said
acquired American citizenship. They then begot two
properties, but, as Lord Mansfield stated in
children, namely: Jerome T.
the early case of Holman v. Johnson: "The
objection that a contract is immoral or illegal
Noveras, who was born on 4 November 1990 and
as between the plaintiff and the defendant,
JenaT. Noveras, born on 2 May 1993. David was
sounds at all times very ill in the mouth of
engaged in courier service business while Leticia
the defendant. It is not for his sake, however,
worked as a nurse in San Francisco, California.
that the objection is ever allowed; but it is
founded in general principles of policy, which
During the marriage, they acquired the following
the defendant has the advantage of,
properties in the Philippines and in the USA:
contrary to the real justice, as between him
and the plaintiff."34 (Citations omitted) Nor
PHILIPPINES
would the denial of his claim amount to an
injustice based on his foreign citizenship.35
PROPERTY
FAIR MARKET VALUE
Precisely, it is the Constitution itself which
P1,693,12
demarcates the rights of citizens and nonHouse and Lot with an area of 150 sq. m.
citizens in owning Philippine land. To be sure,
the constitutional ban against foreigners located at 1085 Norma Street, Sampaloc,
Manila (Sampaloc property)
applies only to ownership of Philippine land
and not to the improvements built thereon,
such as the two (2) houses standing on Lots
P400,00
1 and 2142 which were properly declared to
be 33 Rollo, p. 20. 34 Supra note 29 at 74,Agricultural land with an area of 20,742 sq.
m. located at Laboy, Dipaculao, Aurora
citing I. Tolentino, Civil Code of the
Philippines (1990 ), p. 85 and Marissey v.
Bologna, 123 So. 2d 537 (1960). 35 Rollo, pp.
19-21. Decision 10 G.R. No. 195670 co1

rcel of land with an area of 2.5 hectares


ted at Maria Aurora, Aurora

rcel of land with an area of 175 sq.m.


ted at Sabang Baler, Aurora

s. coconut plantation in San Joaquin


a Aurora, Aurora
USA
PROPERTY

se and Lot at 1155 Hanover Street, Daly


California

iture and furnishings

Due to business reverses, David left the USA and


P490,000.00
returned to the Philippines in 2001. In December
2002,Leticia executed a Special Power of Attorney
(SPA) authorizing David to sell the Sampaloc property
for P2.2 Million. According to Leticia, sometime in
September 2003, David abandoned his family and
P175,000.00
lived with Estrellita Martinez in Aurora province.
Leticia claimed that David agreed toand executed a
Joint Affidavit with Leticia in the presence of Davids
father, Atty. Isaias Noveras, on 3 December 2003
stating that: 1) the P1.1Million proceeds from the sale
P750,000.00
of the Sampaloc property shall be paid to and
collected by Leticia; 2) that David shall return and pay
to LeticiaP750,000.00, which is equivalent to half of
the amount of the redemption price of the Sampaloc
property; and 3) that David shall renounce and forfeit
all his rights and interest in the conjugal and real
FAIR MARKET VALUEproperties situated in the Philippines. David was able
to collect P1,790,000.00 from the sale of the
Sampaloc property, leaving an unpaid balance
of P410,000.00.
5

Upon learning that David had an extra-marital affair,


Leticia filed a petition for divorce with the Superior
$550,000.00
Court of California, County of San Mateo, USA. The
(unpaid debt of $285,000.00)
California court granted the divorce on 24 June 2005
and judgment was duly entered on 29 June
2005. The California court granted to Leticia the
custody of her two children, as well as all the couples
properties in the USA.
6

elries (ring and watch)

On 8 August 2005, Leticia filed a petition for Judicial


Separation of Conjugal Property before the RTC of
Baler, Aurora. She relied on the 3 December 2003
$13,770.00
Joint Affidavit and Davids failure to comply with his
obligation under the same. She prayed for: 1) the
power to administer all conjugal properties in the
Philippines; 2) David and his partner to cease and
desist from selling the subject conjugal properties; 3)
the declaration that all conjugal properties be forfeited
in favor of her children; 4) David to remit half of the
purchase price as share of Leticia from the sale of the
Sampaloc property; and 5) the payment ofP50,000.00
and P100,000.00 litigation expenses.

0 Nissan Frontier 4x4 pickup truck

k of America Checking Account

k of America Cash Deposit

Insurance (Cash Value)

rement, pension, profit-sharing, annuities

In his Answer, David stated that a judgment for the


$100,000.00
dissolution of their marriage was entered on 29 June
2005 by the Superior Court of California, County of
San Mateo. He demanded that the conjugal
partnership properties, which also include the USA
$56,228.00
properties, be liquidated and that all expenses of
liquidation, including attorneys fees of both parties be
charged against the conjugal partnership.
9

The Sampaloc property used to beowned by Davids


parents. The parties herein secured a loan from a
bank and mortgaged the property. When said property
was about to be foreclosed, the couple paid a total
of P1.5 Million for the redemption of the same.

The RTC of Baler, Aurora simplified the issues as


follow:

1. Whether or not respondent David A.


Noveras committed acts of abandonment and
marital infidelity which can result intothe
forfeiture of the parties properties in favor of
the petitioner and their two (2) children.
2. Whether or not the Court has jurisdiction
over the properties in California, U.S.A. and
the same can be included in the judicial
separation prayed for.
3. Whether or not the "Joint Affidavit" x x x
executed by petitioner Leticia T. Noveras and
respondent David A. Noveras will amount to a
waiver or forfeiture of the latters property
rights over their conjugal properties.
4. Whether or not Leticia T. Noveras isentitled
to reimbursement of onehalf of the P2.2
[M]illion sales proceeds of their property in
Sampaloc, Manila and one-half of the P1.5
[M]illion used to redeem the property of Atty.
Isaias Noveras, including interests and
charges.
5. How the absolute community properties
should be distributed.
6. Whether or not the attorneys feesand
litigation expenses of the parties were
chargeable against their conjugal properties.
Corollary to the aboveis the issue of:
Whether or not the two common children of the
parties are entitled to support and presumptive
legitimes.
10

On 8 December 2006, the RTC rendered judgment as


follows:
1. The absolute community of property of the
parties is hereby declared DISSOLVED;
2. The net assets of the absolute community
of property ofthe parties in the Philippines are
hereby ordered to be awarded to respondent
David A. Noveras only, with the properties in
the United States of America remaining in the
sole ownership of petitioner Leticia Noveras
a.k.a. Leticia Tacbiana pursuant to the divorce
decree issuedby the Superior Court of
California, County of San Mateo, United
States of America, dissolving the marriage of
the parties as of June 24, 2005. The titles
presently covering said properties shall be
cancelled and new titles be issued in the

name of the party to whom said properties are


awarded;
3. One-half of the properties awarded to
respondent David A. Noveras in the preceding
paragraph are hereby given to Jerome and
Jena, his two minor children with petitioner
LeticiaNoveras a.k.a. Leticia Tacbiana as their
presumptive legitimes and said legitimes must
be annotated on the titles covering the said
properties.Their share in the income from
these properties shall be remitted to them
annually by the respondent within the first half
of January of each year, starting January
2008;
4. One-half of the properties in the United
States of America awarded to petitioner
Leticia Noveras a.k.a. Leticia Tacbiana in
paragraph 2 are hereby given to Jerome and
Jena, her two minor children with respondent
David A. Noveras as their presumptive
legitimes and said legitimes must be
annotated on the titles/documents covering
the said properties. Their share in the income
from these properties, if any, shall be remitted
to them annually by the petitioner within the
first half of January of each year, starting
January 2008;
5. For the support of their two (2) minor
children, Jerome and Jena, respondent David
A. Noveras shall give them US$100.00 as
monthly allowance in addition to their income
from their presumptive legitimes, while
petitioner Leticia Tacbiana shall take care of
their food, clothing, education and other
needs while they are in her custody in the
USA. The monthly allowance due from the
respondent shall be increased in the future as
the needs of the children require and his
financial capacity can afford;
6. Of the unpaid amount of P410,000.00 on
the purchase price of the Sampaloc property,
the Paringit Spouses are hereby ordered to
pay P5,000.00 to respondent David A.
Noveras and P405,000.00 to the two children.
The share of the respondent may be paid to
him directly but the share of the two children
shall be deposited with a local bank in Baler,
Aurora, in a joint account tobe taken out in
their names, withdrawal from which shall only
be made by them or by their representative
duly authorized with a Special Power of
Attorney. Such payment/deposit shall be
made withinthe period of thirty (30) days after
receipt of a copy of this Decision, with the

passbook of the joint account to be submitted


to the custody of the Clerk of Court of this
Court within the same period. Said passbook
can be withdrawn from the Clerk of Court only
by the children or their attorney-in-fact; and
7. The litigation expenses and attorneys fees
incurred by the parties shall be shouldered by
them individually.

each pay their children the amount of P520,000.00,


thus:
WHEREFORE, the instant appeal is PARTLY
GRANTED. Numbers 2, 4 and 6 of the
assailedDecision dated December 8, 2006 of Branch
96, RTC of Baler, Aurora Province, in Civil Case No.
828 are hereby MODIFIED to read as follows:

11

The trial court recognized that since the parties are


US citizens, the laws that cover their legal and
personalstatus are those of the USA. With respect to
their marriage, the parties are divorced by virtue of
the decree of dissolution of their marriage issued by
the Superior Court of California, County of San Mateo
on 24June 2005. Under their law, the parties
marriage had already been dissolved. Thus, the trial
court considered the petition filed by Leticia as one for
liquidation of the absolute community of property
regime with the determination of the legitimes,
support and custody of the children, instead of an
action for judicial separation of conjugal property.
With respect to their property relations, the trial court
first classified their property regime as absolute
community of property because they did not execute
any marriage settlement before the solemnization of
their marriage pursuant to Article 75 of the Family
Code. Then, the trial court ruled that in accordance
with the doctrine of processual presumption,
Philippine law should apply because the court cannot
take judicial notice of the US law since the parties did
not submit any proof of their national law. The trial
court held that as the instant petition does not fall
under the provisions of the law for the grant of judicial
separation of properties, the absolute community
properties cannot beforfeited in favor of Leticia and
her children. Moreover, the trial court observed that
Leticia failed to prove abandonment and infidelity with
preponderant evidence.
The trial court however ruled that Leticia is not entitled
to the reimbursements she is praying for considering
that she already acquired all of the properties in the
USA. Relying still on the principle of equity, the Court
also adjudicated the Philippine properties to David,
subject to the payment of the childrens presumptive
legitimes. The trial court held that under Article 89 of
the Family Code, the waiver or renunciation made by
David of his property rights in the Joint Affidavit is
void.
On appeal, the Court of Appeals modified the trial
courts Decision by directing the equal division of the
Philippine properties between the spouses. Moreover
with respect to the common childrens presumptive
legitime, the appellate court ordered both spouses to

2. The net assets of the absolute community


of property of the parties in the Philippines are
hereby divided equally between petitioner
Leticia Noveras a.k.a. Leticia Tacbiana (sic)
and respondent David A. Noveras;
xxx
4. One-half of the properties awarded to
petitioner Leticia Tacbiana (sic) in paragraph 2
shall pertain to her minor children, Jerome
and Jena, as their presumptive legitimes
which shall be annotated on the
titles/documents covering the said properties.
Their share in the income therefrom, if any,
shall be remitted to them by petitioner
annually within the first half of January,
starting 2008;
xxx
6. Respondent David A. Noveras and
petitioner Leticia Tacbiana (sic) are each
ordered to pay the amount ofP520,000.00 to
their two children, Jerome and Jena, as their
presumptive legitimes from the sale of the
Sampaloc property inclusive of the
receivables therefrom, which shall be
deposited to a local bank of Baler, Aurora,
under a joint account in the latters names.
The payment/deposit shall be made within a
period of thirty (30) days from receipt ofa copy
of this Decision and the corresponding
passbook entrusted to the custody ofthe Clerk
of Court a quowithin the same period,
withdrawable only by the children or their
attorney-in-fact.
A number 8 is hereby added, which shall read
as follows:
8. Respondent David A. Noveras is hereby
ordered to pay petitioner Leticia Tacbiana (sic)
the amount ofP1,040,000.00 representing her
share in the proceeds from the sale of the
Sampaloc property.
The last paragraph shall read as follows:

Send a copy of this Decision to the local civil registry


of Baler, Aurora; the local civil registry of Quezon City;
the Civil RegistrarGeneral, National Statistics Office,
Vibal Building, Times Street corner EDSA, Quezon
City; the Office of the Registry of Deeds for the
Province of Aurora; and to the children, Jerome
Noveras and Jena Noveras.
The rest of the Decision is AFFIRMED.

12

In the present petition, David insists that the Court of


Appeals should have recognized the California
Judgment which awarded the Philippine properties to
him because said judgment was part of the pleading
presented and offered in evidence before the trial
court. David argues that allowing Leticia to share in
the Philippine properties is tantamount to unjust
enrichment in favor of Leticia considering that the
latter was already granted all US properties by the
California court.
In summary and review, the basic facts are: David
and Leticia are US citizens who own properties in the
USA and in the Philippines. Leticia obtained a decree
of divorce from the Superior Court of California in
June 2005 wherein the court awarded all the
properties in the USA to Leticia. With respect to their
properties in the Philippines, Leticiafiled a petition for
judicial separation ofconjugal properties.
At the outset, the trial court erred in recognizing the
divorce decree which severed the bond of marriage
between the parties. In Corpuz v. Sto. Tomas, we
stated that:
13

in relation to Rule 39, Section 48(b) of the Rules of


Court.
15

Under Section 24 of Rule 132, the record of public


documents of a sovereign authority or tribunal may be
proved by: (1) an official publication thereof or (2) a
copy attested by the officer having the legal custody
thereof. Such official publication or copy must
beaccompanied, if the record is not kept in the
Philippines, with a certificate that the attesting officer
has the legal custody thereof. The certificate may be
issued by any of the authorized Philippine embassy or
consular officials stationed in the foreign country in
which the record is kept, and authenticated by the
seal of his office. The attestation must state, in
substance, that the copy is a correct copy of the
original, or a specific part thereof, asthe case may be,
and must be under the official seal of the attesting
officer.
Section 25 of the same Rule states that whenever a
copy of a document or record is attested for the
purpose of evidence, the attestation must state, in
substance, that the copy is a correct copy of the
original, or a specific part thereof, as the case may
be. The attestation must be under the official seal of
the attesting officer, if there be any, or if hebe the clerk
of a court having a seal, under the seal of such court.
Based on the records, only the divorce decree was
presented in evidence. The required certificates to
prove its authenticity, as well as the pertinent
California law on divorce were not presented.
It may be noted that in Bayot v. Court of Appeals, we
relaxed the requirement on certification where we
held that "[petitioner therein] was clearly an American
citizenwhen she secured the divorce and that divorce
is recognized and allowed in any of the States of the
Union, the presentation of a copy of foreign divorce
decree duly authenticatedby the foreign court issuing
said decree is, as here, sufficient." In this case
however, it appears that there is no seal from the
office where the divorce decree was obtained.
16

The starting point in any recognition of a foreign


divorce judgment is the acknowledgment that our
courts do not take judicial notice of foreign judgments
and laws. Justice Herrera explained that, as a rule,
"no sovereign is bound to give effect within its
dominion to a judgment rendered by a tribunal of
another country." This means that the foreign
judgment and its authenticity must beproven as facts
under our rules on evidence, together with the aliens
applicable national law to show the effect of the
judgment on the alien himself or herself. The
recognition may be made in an action instituted
specifically for the purpose or in another action where
a party invokes the foreign decree as an integral
aspect of his claim or defense.
14

The requirements of presenting the foreign divorce


decree and the national law of the foreigner must
comply with our Rules of Evidence. Specifically, for
Philippine courts to recognize a foreign judgment
relating to the status of a marriage, a copy of the
foreign judgment may be admitted in evidence and
proven as a fact under Rule 132, Sections 24 and 25,

Even if we apply the doctrine of processual


presumption as the lower courts did with respect to
the property regime of the parties, the recognition of
divorce is entirely a different matter because, to begin
with, divorce is not recognized between Filipino
citizens in the Philippines. Absent a valid recognition
of the divorce decree, it follows that the parties are
still legally married in the Philippines. The trial court
thus erred in proceeding directly to liquidation.
17

As a general rule, any modification in the marriage


settlements must be made before the celebration of
marriage. An exception to this rule is allowed provided

that the modification isjudicially approved and refers


only to the instances provided in Articles 66,67, 128,
135 and 136 of the Family Code.
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, to wit:
Art. 135. Any of the following shall be considered
sufficient cause for judicial separation of property:
(1) That the spouse of the petitioner has been
sentenced to a penalty which carries with it
civil interdiction;
(2) That the spouse of the petitioner has been
judicially declared an absentee;
(3) That loss of parental authority ofthe
spouse of petitioner has been decreed by the
court;
(4) That the spouse of the petitioner has
abandoned the latter or failed to comply with
his or her obligations to the family as provided
for in Article 101;
(5) That the spouse granted the power of
administration in the marriage settlements has
abused that power; and
(6) That at the time of the petition, the
spouses have been separated in fact for at
least one year and reconciliation is highly
improbable.

In the instant case, the petitioner knows that the


respondent has returned to and stayed at his
hometown in Maria Aurora, Philippines, as she even
went several times to visit him there after the alleged
abandonment. Also, the respondent has been going
back to the USA to visit her and their children until the
relations between them worsened. The last visit of
said respondent was in October 2004 when he and
the petitioner discussed the filing by the latter of a
petition for dissolution of marriage with the California
court. Such turn for the worse of their relationship and
the filing of the saidpetition can also be considered as
valid causes for the respondent to stay in the
Philippines.
19

Separation in fact for one year as a ground to grant a


judicial separation of property was not tackled in the
trial courts decision because, the trial court
erroneously treated the petition as liquidation of the
absolute community of properties.
The records of this case are replete with evidence
that Leticia and David had indeed separated for more
than a year and that reconciliation is highly
improbable. First, while actual abandonment had not
been proven, it is undisputed that the spouses had
been living separately since 2003 when David
decided to go back to the Philippines to set up his
own business. Second, Leticia heard from her friends
that David has been cohabiting with Estrellita
Martinez, who represented herself as Estrellita
Noveras. Editha Apolonio, who worked in the hospital
where David was once confined, testified that she
saw the name of Estrellita listed as the wife of David
in the Consent for Operation form. Third and more
significantly, they had filed for divorce and it was
granted by the California court in June 2005.
20

In the cases provided for in Numbers (1), (2), and (3),


the presentation of the final judgment against the
guiltyor absent spouse shall be enough basis for the
grant of the decree ofjudicial separation of property.
(Emphasis supplied).

Having established that Leticia and David had actually


separated for at least one year, the petition for judicial
separation of absolute community of property should
be granted.

The trial court had categorically ruled that there was


no abandonment in this case to necessitate judicial
separation of properties under paragraph 4 of Article
135 of the Family Code. The trial court ratiocinated:

The grant of the judicial separation of the absolute


community property automatically dissolves the
absolute community regime, as stated in the 4th
paragraph of Article 99 ofthe Family Code, thus:

Moreover, abandonment, under Article 101 of the


Family Code quoted above, must be for a valid cause
and the spouse is deemed to have abandoned the
other when he/she has left the conjugal dwelling
without intention of returning. The intention of not
returning is prima facie presumed if the allegedly [sic]
abandoning spouse failed to give any information as
to his or her whereabouts within the period of three
months from such abandonment.

Art. 99. The absolute community terminates:


(1) Upon the death of either spouse;
(2) When there is a decree of legal separation;
(3) When the marriage is annulled or declared
void; or

(4) In case of judicial separation of property


during the marriage under Articles 134 to 138.
(Emphasis supplied).
Under Article 102 of the same Code, liquidation
follows the dissolution of the absolute community
regime and the following procedure should apply:
Art. 102. Upon dissolution of the absolute community
regime, the following procedure shall apply:
(1) An inventory shall be prepared, listing
separately all the properties of the absolute
community and the exclusive properties of
each spouse.
(2) The debts and obligations of the absolute
community shall be paid out of its assets. In
case of insufficiency of said assets, the
spouses shall be solidarily liable for the
unpaid balance with their separate properties
in accordance with the provisions of the
second paragraph of Article 94.

consideration the best interests of said


children. At the risk of being repetitious, we
will not remand the case to the trial court.
Instead, we shall adopt the modifications
made by the Court of Appeals on the trial
courts Decision with respect to liquidation.
We agree with the appellate court that the Philippine
courts did not acquire jurisdiction over the California
properties of David and Leticia. Indeed, Article 16 of
the Civil Code clearly states that real property as well
as personal property is subject to the law of the
country where it is situated. Thus, liquidation shall
only be limited to the Philippine properties.
We affirm the modification madeby the Court of
Appeals with respect to the share of the spouses in
the absolutecommunity properties in the Philippines,
as well as the payment of their childrens presumptive
legitimes, which the appellate court explained in this
wise:
Leticia and David shall likewise have an equal share
in the proceeds of the Sampaloc property. While both
claimed to have contributed to the redemption of the
Noveras property, absent a clear showing where their
contributions came from, the same is presumed to
have come from the community property. Thus,
Leticia is not entitled to reimbursement of half of the
redemption money.
1wphi1

(3) Whatever remains of the exclusive


properties of the spouses shall thereafter be
delivered to each of them.
(4) The net remainder of the properties of the
absolute community shall constitute its net
assets, which shall be divided equally
between husband and wife, unless a different
proportion or division was agreed upon in the
marriage settlements, or unless there has
been a voluntary waiver of such share
provided in this Code. For purposes of
computing the net profits subject to forfeiture
in accordance with Articles 43, No. (2) and 63,
No. (2),the said profits shall be the increase in
value between the market value of the
community property at the time of the
celebration of the marriage and the market
value at the time of its dissolution.
(5) The presumptive legitimes of the common
children shall be delivered upon partition, in
accordance with Article 51.
(6) Unless otherwise agreed upon by the
parties, in the partition of the properties, the
conjugal dwelling and the lot on which it is
situated shall be adjudicated tothe spouse
with whom the majority of the common
children choose to remain. Children below the
age of seven years are deemed to have
chosen the mother, unless the court has
decided otherwise. In case there is no such
majority, the court shall decide, taking into

David's allegation that he used part of the proceeds


from the sale of the Sampaloc property for the benefit
of the absolute community cannot be given full
credence. Only the amount of P120,000.00 incurred
in going to and from the U.S.A. may be charged
thereto. Election expenses in the amount
of P300,000.00 when he ran as municipal councilor
cannot be allowed in the absence of receipts or at
least the Statement of Contributions and Expenditures
required under Section 14 of Republic Act No. 7166
duly received by the Commission on Elections.
Likewise, expenses incurred to settle the criminal
case of his personal driver is not deductible as the
same had not benefited the family. In sum, Leticia and
David shall share equally in the proceeds of the sale
net of the amount ofP120,000.00 or in the respective
amounts of P1,040,000.00.
xxxx
Under the first paragraph of Article 888 of the Civil
Code, "(t)he legitime of legitimate children and
descendants consists of one-half or the hereditary
estate of the father and of the mother." The children
arc therefore entitled to half of the share of each
spouse in the net assets of the absolute community,
which shall be annotated on the titles/documents

covering the same, as well as to their respective


shares in the net proceeds from the sale of the
Sampaloc property including the receivables from
Sps. Paringit in the amount of P410,000.00.
Consequently, David and Leticia should each pay
them the amount of P520,000.00 as their presumptive
legitimes therefrom.

2) Ordering the plaintiff to pay defendant


moral damages in the amount of 2.5
million pesos and exemplary damages
of 1 million pesos with 6% interest
from the date of this decision plus
attorneys fees of P100,000.00;

WHEREFORE, the petition is DENIED. The assailed


Decision of the Court of Appeals in CA G.R. CV No.
88686 is AFFIRMED.

3) Ordering the plaintiff to pay the


defendant expenses of litigation
of P50,000.00, plus costs;

SO ORDERED.

4) Ordering the liquidation of the assets of


the conjugal partnership property[,]
particularly
the
plaintiffs
separation/retirement
benefits
received from the Far East Bank [and]
Trust Company[,] by ceding, giving
and paying to her fifty percent (50%)
of the net amount of P3,675,335.79
orP1,837,667.89 together with 12%
interest per annum from the date of
this decision and one-half (1/2) of his
outstanding shares of stock with
Manila Memorial Park and Provident
Group of Companies;

21

BUENAVENTURA V CA

DECISION
AZCUNA, J.:

These cases involve a petition for the


declaration of nullity of marriage, which
was filed by petitioner Noel Buenaventura
on July 12, 1992, on the ground of the
alleged psychological incapacity of his
wife, Isabel Singh Buenaventura, herein
respondent. After respondent filed her
answer, petitioner, with leave of court,
amended his petition by stating that both
he and his wife were psychologically
incapacitated to comply with the essential
obligations of marriage. In response,
respondent filed an amended answer
denying the allegation that she was
psychologically incapacitated.
[1]

On July 31, 1995, the Regional Trial


Court promulgated a Decision, the
dispositive portion of which reads:
WHEREFORE, judgment is hereby
rendered as follows:
1) Declaring and decreeing the marriage
entered into between plaintiff Noel A.
Buenaventura and defendant Isabel
Lucia Singh Buenaventura on July 4,
1979, null and void ab initio;

5) Ordering him to give a regular support


in favor of his son Javy Singh
Buenaventura
in
the
amount
of P15,000.00 monthly, subject to
modification as the necessity arises;
6) Awarding the care and custody of the
minor Javy Singh Buenaventura to his
mother, the herein defendant; and
7) Hereby authorizing the defendant to
revert back to the use of her maiden
family name Singh.

Let copies of this decision be furnished the


appropriate civil registry and registries of
properties.
SO ORDERED.

[2]

Petitioner
appealed
the
above
decision to the Court of Appeals. While
the case was pending in the appellate
court, respondent filed a motion to

increase
the P15,000
monthly
support pendente lite of their son Javy
Singh Buenaventura. Petitioner filed an
opposition thereto, praying that it be
denied or that such incident be set for oral
argument.
[3]

On September 2, 1996, the Court of


Appeals issued a Resolution increasing
the support pendente lite to P20,000.
Petitioner
filed
a
motion
for
reconsideration questioning the said
Resolution.
[4]

[5]

On October 8, 1996, the appellate


court promulgated a Decision dismissing
petitioners appeal for lack of merit and
affirming in toto the trial courts decision.
Petitioner
filed
a
motion
for
reconsideration which was denied. From
the abovementioned Decision, petitioner
filed the instant Petition for Review
on Certiorari.
[6]

On November 13, 1996, through


another Resolution, the Court of Appeals
denied
petitioners
motion
for
reconsideration of the September 2, 1996
Resolution, which increased the monthly
support for the son. Petitioner filed a
Petition for Certiorari to question these
two Resolutions.
[7]

On July 9, 1997, the Petition for


Review on Certiorari and the Petition
for Certiorari were ordered consolidated
by this Court.
[8]

1. WHEN IT AWARDED DEFENDANTAPPELLEE MORAL DAMAGES IN THE


AMOUNT OF P2.5 MILLION AND
EXEMPLARY DAMAGES OF P1
MILLION, WITH 6% INTEREST FROM
THE DATE OF ITS DECISION, WITHOUT
ANY LEGAL AND MORAL BASIS;
2. WHEN IT AWARDED P100,000.00
ATTORNEYS FEES AND P50,000.00
EXPENSES OF LITIGATION, PLUS
COSTS, TO DEFENDANT-APPELLEE,
WITHOUT FACTUAL AND LEGAL BASIS;
3. WHEN IT ORDERED PLAINTIFFAPPELLANT NOEL TO PAY DEFENDANTAPPELLEE ONE-HALF OR P1,837,667.89
OUT OF HIS RETIREMENT BENEFITS
RECEIVED FROM THE FAR EAST BANK
AND TRUST CO., WITH 12% INTEREST
THEREON FROM THE DATE OF ITS
DECISION, NOTWITHSTANDING THAT
SAID RETIREMENT BENEFITS ARE
GRATUITOUS AND EXCLUSIVE
PROPERTY OF NOEL, AND ALSO TO
DELIVER TO DEFENDANT-APPELLEE
ONE-HALF OF HIS SHARES OF STOCK
WITH THE MANILA MEMORIAL PARK
AND THE PROVIDENT GROUP OF
COMPANIES, ALTHOUGH SAID SHARES
OF STOCK WERE ACQUIRED BY NOEL
BEFORE HIS MARRIAGE TO
RESPONDENT ISABEL AND ARE,
THEREFORE, AGAIN HIS EXCLUSIVE
PROPERTIES; AND

[9]

[10]

In
the
Petition
for
Review
on Certiorari petitioner claims that the
Court of Appeals decided the case not in
accord with law and jurisprudence, thus:

4. WHEN IT AWARDED EXCLUSIVE


CARE AND CUSTODY OVER THE
PARTIES MINOR CHILD TO
DEFENDANT-APPELLEE WITHOUT
ASKING THE CHILD (WHO WAS
ALREADY 13 YEARS OLD AT THAT
TIME) HIS CHOICE AS TO WHOM,

BETWEEN HIS TWO PARENTS, HE


WOULD LIKE TO HAVE CUSTODY OVER
HIS PERSON.
[11]

In the Petition for Certiorari, petitioner


advances the following contentions:
THE COURT OF APPEALS GRAVELY
ABUSED ITS DISCRETION WHEN IT
REFUSED TO SET RESPONDENTS
MOTION FOR INCREASED SUPPORT
FOR THE PARTIES SON FOR HEARING.

[12]

THERE WAS NO NEED FOR THE COURT


OF APPEALS TO INCREASE JAVYS
MONTHLY SUPPORT OF P15,000.00
BEING GIVEN BY PETITIONER EVEN AT
PRESENT PRICES.
[13]

IN RESOLVING RESPONDENTS MOTION


FOR THE INCREASE OF JAVYS
SUPPORT, THE COURT OF APPEALS
SHOULD HAVE EXAMINED THE LIST OF
EXPENSES SUBMITTED BY
RESPONDENT IN THE LIGHT OF
PETITIONERS OBJECTIONS THERETO,
INSTEAD OF MERELY ASSUMING THAT
JAVY IS ENTITLED TO A P5,000
INCREASE IN SUPPORT AS SAID
AMOUNT IS TOO MINIMAL.
[14]

LIKEWISE, THE COURT OF APPEALS


SHOULD HAVE GIVEN PETITIONER AN
OPPORTUNITY TO PROVE HIS PRESENT
INCOME TO SHOW THAT HE CANNOT
AFFORD TO INCREASE JAVYS SUPPORT.
[15]

With regard to the first issue in the


main case, the Court of Appeals
articulated:
On Assignment of Error C, the trial court,
after findings of fact ascertained from the

testimonies not only of the parties particularly


the defendant-appellee but likewise, those of
the two psychologists, awarded damages on
the basis of Articles 21, 2217 and 2229 of the
Civil Code of the Philippines.
Thus, the lower court found that plaintiffappellant deceived the defendant-appellee into
marrying him by professing true love instead
of revealing to her that he was under heavy
parental pressure to marry and that because of
pride he married defendant-appellee; that he
was not ready to enter into marriage as in fact
his career was and always would be his first
priority; that he was unable to relate not only
to defendant-appellee as a husband but also to
his son, Javy, as a father; that he had no
inclination to make the marriage work such
that in times of trouble, he chose the easiest
way out, that of leaving defendantappellee
and their son; that he had no desire to keep
defendant-appellee and their son as proved by
his reluctance and later, refusal to reconcile
after their separation; that the aforementioned
caused defendant-appellee to suffer mental
anguish, anxiety, besmirched reputation,
sleepless nights not only in those years the
parties were together but also after and
throughout their separation.
Plaintiff-appellant assails the trial courts
decision on the ground that unlike those
arising from a breach in ordinary contracts,
damages arising as a consequence of marriage
may not be awarded. While it is correct that
there is, as yet, no decided case by the
Supreme Court where damages by reason of
the performance or non-performance of
marital obligations were awarded, it does not
follow that no such award for damages may
be made.

Defendant-appellee, in her amended answer,


specifically prayed for moral and exemplary
damages in the total amount of 7 million
pesos. The lower court, in the exercise of its
discretion, found full justification of awarding
at least half of what was originally prayed for.
We find no reason to disturb the ruling of the
trial court.
[16]

The award by the trial court of moral


damages is based on Articles 2217 and
21 of the Civil Code, which read as
follows:
ART. 2217. Moral damages include physical
suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded
feelings, moral shock, social humiliation, and
similar injury. Though incapable of pecuniary
computation, moral damages may be
recovered if they are the proximate result of
the defendants wrongful act or omission.
ART. 21. Any person who wilfully causes loss
or injury to another in a manner that is
contrary to morals, good customs or public
policy shall compensate the latter for the
damage.
The trial court referred to Article 21
because Article 2219 of the Civil Code
enumerates the cases in which moral
damages may be recovered and it
mentions Article 21 as one of the
instances. It must be noted that Article 21
states that the individual must willfully
cause loss or injury to another. There is a
need that the act is willful and hence done
in complete freedom. In granting moral
damages, therefore, the trial court and the
Court of Appeals could not but have
assumed that the acts on which the moral
damages were based were done willfully
[17]

and freely, otherwise the grant of moral


damages would have no leg to stand on.
On the other hand, the trial court
declared the marriage of the parties null
and void based on Article 36 of the Family
Code, due to psychological incapacity of
the petitioner, Noel Buenaventura. Article
36 of the Family Code states:
A marriage contracted by any party who, at
the time of the celebration, was
psychologically incapacitated to comply with
the essential marital obligations of marriage,
shall likewise be void even if such incapacity
becomes manifest only after its solemnization.
Psychological incapacity has been
defined, thus:
. . . no less than a mental (not physical)
incapacity that causes a party to be truly
incognitive of the basic marital covenants
that concomitantly must be assumed and
discharged by the parties to the
marriage which, as so expressed by Article
68 of the Family Code, include their mutual
obligations to live together, observe love,
respect and fidelity and render help and
support. There is hardly any doubt that the
intendment of the law has been to confine the
meaning of "psychological incapacity" to the
most serious cases of personality disorders
clearly demonstrative of an utter insensitivity
or inability to give meaning and
significance to the marriage. . . .
[18]

The Court of Appeals and the trial


court considered the acts of the petitioner
after the marriage as proof of his
psychological incapacity, and therefore a
product of his incapacity or inability to
comply with the essential obligations of

marriage. Nevertheless, said courts


considered these acts as willful and
hence as grounds for granting moral
damages.
It
is
contradictory
to
characterize acts as a product of
psychological incapacity, and hence
beyond the control of the party because
of an innate inability, while at the same
time considering the same set of acts as
willful. By declaring the petitioner as
psychologically
incapacitated,
the
possibility of awarding moral damages on
the same set of facts was negated. The
award of moral damages should be
predicated, not on the mere act of
entering into the marriage, but on specific
evidence that it was done deliberately and
with malice by a party who had
knowledge of his or her disability and yet
willfully concealed the same. No such
evidence appears to have been adduced
in this case.
For
the
same
reason,
since
psychological incapacity means that one
is truly incognitive of the basic marital
covenants that one must assume and
discharge as a consequence of marriage,
it removes the basis for the contention
that the petitioner purposely deceived the
private respondent. If the private
respondent was deceived, it was not due
to a willful act on the part of the petitioner.
Therefore, the award of moral damages
was without basis in law and in fact.
Since the grant of moral damages was
not proper, it follows that the grant of
exemplary damages cannot stand since
the Civil Code provides that exemplary
damages are imposed in addition to
moral,
temperate,
liquidated
or
compensatory damages.
[19]

With respect to the grant of attorneys


fees and expenses of litigation the trial
court explained, thus:
Regarding Attorneys fees, Art. 2208 of the
Civil Code authorizes an award of attorneys
fees and expenses of litigation, other than
judicial costs, when as in this case the
plaintiffs act or omission has compelled the
defendant to litigate and to incur expenses of
litigation to protect her interest (par. 2), and
where the Court deems it just and equitable
that attorneys fees and expenses of litigation
should be recovered. (par. 11)
[20]

The Court of Appeals reasoned as


follows:
On Assignment of Error D, as the award of
moral and exemplary damages is fully
justified, the award of attorneys fees and costs
of litigation by the trial court is likewise fully
justified.
[21]

The acts or omissions of petitioner


which led the lower court to deduce his
psychological incapacity, and his act in
filing the complaint for the annulment of
his marriage cannot be considered as
unduly compelling the private respondent
to litigate, since both are grounded on
petitioners psychological incapacity, which
as explained above is a mental incapacity
causing an utter inability to comply with
the obligations of marriage. Hence,
neither can be a ground for attorneys fees
and litigation expenses. Furthermore,
since the award of moral and exemplary
damages is no longer justified, the award
of attorneys fees and expenses of
litigation is left without basis.

Anent the retirement benefits received


from the Far East Bank and Trust Co. and
the shares of stock in the Manila
Memorial Park and the Provident Group
of Companies, the trial court said:
The third issue that must be resolved by the
Court is what to do with the assets of the
conjugal partnership in the event of
declaration of annulment of the marriage. The
Honorable Supreme Court has held that the
declaration of nullity of marriage carries ipso
facto a judgment for the liquidation of
property (Domingo v. Court of Appeals, et al.,
G.R. No. 104818, Sept. 17, 1993, 226 SCRA,
pp. 572 573, 586). Thus, speaking through
Justice Flerida Ruth P. Romero, it was ruled in
this case:
When a marriage is declared void ab initio,
the law states that the final judgment therein
shall provide for the liquidation, partition and
distribution of the properties of the spouses,
the custody and support of the common
children and the delivery of their presumptive
legitimes, unless such matters had been
adjudicated in the previous proceedings.
The parties here were legally married on July
4, 1979, and therefore, all property acquired
during the marriage, whether the acquisition
appears to have been made, contracted or
registered in the name of one or both spouses,
is presumed to be conjugal unless the contrary
is proved (Art. 116, New Family Code; Art.
160, Civil Code). Art. 117 of the Family Code
enumerates what are conjugal partnership
properties. Among others they are the
following:

1) Those acquired by onerous title during the


marriage at the expense of the common fund,
whether the acquisition be for the partnership,
or for only one of the spouses;
2) Those obtained from the labor, industry,
work or profession of either or both of the
spouses;
3) The fruits, natural, industrial, or civil, due
or received during the marriage from the
common property, as well as the net fruits
from the exclusive property of each spouse. . .
.
Applying the foregoing legal provisions, and
without prejudice to requiring an inventory of
what are the parties conjugal properties and
what are the exclusive properties of each
spouse, it was disclosed during the
proceedings in this case that the plaintiff who
worked first as Branch Manager and later as
Vice-President of Far East Bank & Trust Co.
received separation/retirement package from
the said bank in the amount of P3,701,500.00
which after certain deductions amounting
to P26,164.21 gave him a net amount
of P3,675,335.79 and actually paid to him on
January 9, 1995 (Exhs. 6, 7, 8, 9, 10, 11). Not
having shown debts or obligations other than
those deducted from the said
retirement/separation pay, under Art. 129 of
the Family Code The net remainder of the
conjugal partnership properties shall
constitute the profits, which shall be divided
equally between husband and wife, unless a
different proportion or division was agreed
upon in the marriage settlement or unless
there has been a voluntary waiver or forfeiture
of such share as provided in this Code. In this
particular case, however, there had been no
marriage settlement between the parties, nor
had there been any voluntary waiver or valid

forfeiture of the defendant wifes share in the


conjugal partnership properties. The previous
cession and transfer by the plaintiff of his onehalf (1/2) share in their residential house and
lot covered by T.C.T. No. S-35680 of the
Registry of Deeds of Paraaque, Metro Manila,
in favor of the defendant as stipulated in their
Compromise Agreement dated July 12, 1993,
and approved by the Court in its Partial
Decision dated August 6, 1993, was actually
intended to be in full settlement of any and all
demands for past support. In reality, the
defendant wife had allowed some concession
in favor of the plaintiff husband, for were the
law strictly to be followed, in the process of
liquidation of the conjugal assets, the conjugal
dwelling and the lot on which it is situated
shall, unless otherwise agreed upon by the
parties, be adjudicated to the spouse with
whom their only child has chosen to remain
(Art. 129, par. 9). Here, what was done was
one-half (1/2) portion of the house was ceded
to defendant so that she will not claim
anymore for past unpaid support, while the
other half was transferred to their only child
as his presumptive legitime.
Consequently, nothing yet has been given to
the defendant wife by way of her share in the
conjugal properties, and it is but just, lawful
and fair, that she be given one-half (1/2) share
of the separation/retirement benefits received
by the plaintiff the same being part of their
conjugal partnership properties having been
obtained or derived from the labor, industry,
work or profession of said defendant husband
in accordance with Art. 117, par. 2 of the
Family Code. For the same reason, she is
entitled to one-half (1/2) of the outstanding
shares of stock of the plaintiff husband with
the Manila Memorial Park and the Provident
Group of Companies.
[22]

The Court of Appeals articulated on


this matter as follows:
On Assignment of Error E, plaintiff-appellant
assails the order of the trial court for him to
give one-half of his separation/retirement
benefits from Far East Bank & Trust
Company and half of his outstanding shares in
Manila Memorial Park and Provident Group
of Companies to the defendant-appellee as the
latters share in the conjugal partnership.
On August 6, 1993, the trial court rendered a
Partial Decision approving the Compromise
Agreement entered into by the parties. In the
same Compromise Agreement, the parties had
agreed that henceforth, their conjugal
partnership is dissolved. Thereafter, no steps
were taken for the liquidation of the conjugal
partnership.
Finding that defendant-appellee is entitled to
at least half of the separation/retirement
benefits which plaintiff-appellant received
from Far East Bank & Trust Company upon
his retirement as Vice-President of said
company for the reason that the benefits
accrued from plaintiffappellants service for
the bank for a number of years, most of which
while he was married to defendant-appellee,
the trial court adjudicated the same. The same
is true with the outstanding shares of plaintiffappellant in Manila Memorial Park and
Provident Group of Companies. As these were
acquired by the plaintiff-appellant at the time
he was married to defendant-appellee, the
latter is entitled to one-half thereof as her
share in the conjugal partnership. We find no
reason to disturb the ruling of the trial court.
[23]

Since the present case does not


involve the annulment of a bigamous
marriage, the provisions of Article 50 in

relation to Articles 41, 42 and 43 of the


Family Code, providing for the dissolution
of the absolute community or conjugal
partnership of gains, as the case may be,
do not apply. Rather, the general rule
applies, which is that in case a marriage
is declared void ab initio, the property
regime applicable and to be liquidated,
partitioned and distributed is that of equal
co-ownership.
In Valdes v. Regional Trial Court,
Branch 102, Quezon City, this Court
expounded on the consequences of a
void marriage on the property relations of
the spouses and specified the applicable
provisions of law:
[24]

The trial court correctly applied the law. In a


void marriage, regardless of the cause thereof,
the property relations of the parties during the
period of cohabitation is governed by the
provisions of Article 147 or Article 148, such
as the case may be, of the Family Code.
Article 147 is a remake of Article 144 of the
Civil Code as interpreted and so applied in
previous cases; it provides:
ART. 147. When a man and a woman who are
capacitated to marry each other, live
exclusively with each other as husband and
wife without the benefit of marriage or under
a void marriage, their wages and salaries shall
be owned by them in equal shares and the
property acquired by both of them through
their work or industry shall be governed by
the rules on co-ownership.
In the absence of proof to the contrary,
properties acquired while they lived together
shall be presumed to have been obtained by
their joint efforts, work or industry, and shall
be owned by them in equal shares. For

purposes of this Article, a party who did not


participate in the acquisition by the other
party of any property shall be deemed to have
contributed jointly in the acquisition thereof if
the former's efforts consisted in the care and
maintenance of the family and of the
household.
Neither party can encumber or dispose by
acts inter vivos of his or her share in the
property acquired during cohabitation and
owned in common, without the consent of the
other, until after the termination of their
cohabitation.
When only one of the parties to a void
marriage is in good faith, the share of the
party in bad faith in the co-ownership shall be
forfeited in favor of their common children. In
case of default of or waiver by any or all of
the common children or their descendants,
each vacant share shall belong to the
respective surviving descendants. In the
absence of descendants, such share shall
belong to the innocent party. In all cases, the
forfeiture shall take place upon termination of
the cohabitation.
This peculiar kind of co-ownership applies
when a man and a woman, suffering no legal
impediment to marry each other, so
exclusively live together as husband and wife
under a void marriage or without the benefit
of marriage. The term "capacitated" in the
provision (in the first paragraph of the law)
refers to the legal capacity of a party to
contract marriage, i.e., any "male or female of
the age of eighteen years or upwards not
under any of the impediments mentioned in
Articles 37 and 38" of the Code.
Under this property regime, property acquired
by both spouses through

their work and industry shall be governed by


the rules on equal co-ownership. Any property
acquired during the union is prima facie
presumed to have been obtained through their
joint efforts. A party who did not participate in
the acquisition of the property shall still be
considered as having contributed thereto
jointly if said party's "efforts consisted in the
care and maintenance of the family
household." Unlike the conjugal partnership
of gains, the fruits of the couple's separate
property are not included in the co-ownership.
Article 147 of the Family Code, in substance
and to the above extent, has clarified Article
144 of the Civil Code; in addition, the law
now expressly provides that
(a) Neither party can dispose or encumber by
act[s] inter vivos [of] his or her share in coownership property, without the consent of the
other, during the period of cohabitation; and
(b) In the case of a void marriage, any party in
bad faith shall forfeit his or her share in the
co-ownership in favor of their common
children; in default thereof or waiver by any
or all of the common children, each vacant
share shall belong to the respective surviving
descendants, or still in default thereof, to the
innocent party. The forfeiture shall take place
upon the termination of the cohabitation or
declaration of nullity of the marriage.
In deciding to take further cognizance of the
issue on the settlement of the parties' common
property, the trial court acted neither
imprudently nor precipitately; a court which
had jurisdiction to declare the marriage a
nullity must be deemed likewise clothed with
authority to resolve incidental and
consequential matters. Nor did it commit a
reversible error in ruling that petitioner and

private respondent own the "family home"


and all their common property in equal
shares, as well as in concluding that, in the
liquidation and partition of the property
owned in common by them, the provisions on
co-ownership under the Civil Code, not
Articles 50, 51 and 52, in relation to Articles
102 and 129, of the Family Code, should aptly
prevail. The rules set up to govern the
liquidation of either the absolute community
or the conjugal partnership of gains, the
property regimes recognized for valid and
voidable marriages (in the latter case until the
contract is annulled), are irrelevant to the
liquidation of the co-ownership that exists
between common-law spouses. The first
paragraph of Article 50 of the Family Code,
applying paragraphs (2), (3), (4) and (5) of
Article 43, relates only, by its explicit terms,
to voidable marriages and, exceptionally,
to void marriages under Article 40 of the
Code, i.e., the declaration of nullity of a
subsequent marriage contracted by a spouse of
a prior void marriage before the latter is
judicially declared void. The latter is a special
rule that somehow recognizes the philosophy
and an old doctrine that void marriages are
inexistent from the very beginning and no
judicial decree is necessary to establish their
nullity. In now requiring for purposes of
remarriage, the declaration of nullity by final
judgment of the previously contracted void
marriage, the present law aims to do away
with any continuing uncertainty on the status
of the second marriage. It is not then illogical
for the provisions of Article 43, in relation to
Articles 41 and 42, of the Family Code, on the
effects of the termination of a subsequent
marriage contracted during the subsistence of
a previous marriage to be made applicable pro
hac vice. In all other cases, it is not to be
assumed that the law has also meant to have
coincident property relations, on the one hand,

between spouses in valid and voidable


marriages (before annulment) and, on the
other, between common-law spouses or
spouses of void marriages, leaving to ordain,
in the latter case, the ordinary rules on coownership subject to the provision of Article
147 and Article 148 of the Family Code. It
must be stressed, nevertheless, even as it may
merely state the obvious, that the provisions
of the Family Code on the "family home," i.e.,
the provisions found in Title V, Chapter 2, of
the Family Code, remain in force and effect
regardless of the property regime of the
spouses.
[25]

Since the properties ordered to be


distributed by the court a quo were found,
both by the trial court and the Court of
Appeals, to have been acquired during
the union of the parties, the same would
be covered by the co-ownership. No fruits
of a separate property of one of the
parties appear to have been included or
involved in said distribution. The
liquidation, partition and distribution of the
properties owned in common by the
parties herein as ordered by the court a
quo should, therefore, be sustained, but
on the basis of co-ownership and not of
the regime of conjugal partnership of
gains.
As to the issue on custody of the
parties over their only child, Javy Singh
Buenaventura, it is now moot since he is
about to turn twenty-five years of age on
May 27, 2005 and has, therefore,
attained the age of majority.
[26]

With regard to the issues on support


raised in the Petition for Certiorari, these
would also now be moot, owing to the fact
that the son, Javy Singh Buenaventura,

as previously stated, has attained the age


of majority.
WHEREFORE, the Decision of the
Court of Appeals dated October 8, 1996
and its Resolution dated December 10,
1996 which are contested in the Petition
for Review (G.R. No. 127449), are hereby
MODIFIED, in that the award of moral
and exemplary damages, attorneys fees,
expenses of litigation and costs are
deleted. The order giving respondent onehalf of the retirement benefits of petitioner
from Far East Bank and Trust Co. and
one-half of petitioners shares of stock in
Manila Memorial Park and in the
Provident
Group
of
Companies
is sustained but on the basis of the
liquidation, partition and distribution of
the co-ownership and not of the
regime of conjugal partnership of
gains. The rest of said Decision and
Resolution are AFFIRMED.
The
Petition
for
Review
on Certiorari (G.R.
No.
127358)
contesting the Court of Appeals
Resolutions of September 2, 1996 and
November 13, 1996 which increased the
support pendente lite in favor of the
parties son, Javy Singh Buenaventura, is
now MOOT and ACADEMIC and is,
accordingly, DISMISSED.
No costs.
SO ORDERED.
ABING V WAEYAN

DECISION
GARCIA, J.:

In this appeal by way of a petition for review under


Rule 45 of the Rules of Court, petitioner John Abing
(John, hereafter) seeks to set aside the
Decision1 dated October 24, 2000 of the Court of
Appeals (CA) in CA-G.R. SP No. 48675, reversing
that of the Regional Trial Court (RTC) of Benguet,
Branch 64, which affirmed an earlier decision of the
Municipal Trial Court (MTC) of Mankayan, Benguet in
an ejectment suit thereat commenced by the
petitioner against the respondent.
In the main, the controversy is between a man and a
woman who, during the good old days, lived together
as husband and wife without the benefit of marriage.
During their cohabitation, they acquired properties.
Later, they parted ways, and with it this litigation
between them involving one of their common
properties.
The facts:
Sometime in 1986, John and respondent Juliet
Waeyan (Juliet, for short) met and fell in love with
each other. In time, the duo cohabited as husband
and wife without the benefit of marriage. Together, the
couple bought a 2-storey residential house from one
Benjamin Macua which was erected on a lot owned
by a certain Alejandro Dio on Aurora Street,
Mankayan, Benguet. Consequent to the purchase, the
tax declaration of the 2-storey house was transferred
in the name of Juliet.
On December 2, 1991, Juliet left for overseas
employment in Korea. She would send money to John
who deposited the same in their joint bank account.
In 1992, the original 2-storey residential house
underwent renovation. To it was annexed a new
structure which housed a sari-sari store. This new
structure and the sari-sari store thereat are the
properties involved in this case.
In 1994, Juliet returned from Korea and continued to
live with John. She managed the sari-sari store while
John worked as a mine employee of the Lepanto
Consolidated Mining, Inc.
In 1995, the relationship between the two turned from
bad to worse. Hence, they decided to partition their
properties. For the purpose, they executed on
October 7, 1995 a Memorandum of Agreement.
Unfortunately, the document was left unsigned by the
parties although signed by the witnesses thereto.
Under their unsigned agreement, John shall leave the

couples' dwelling with Juliet paying him the amount


of P428,870.00 representing John's share in all their
properties. On the same date October 7, 1995
Juliet paid John the sum ofP232,397.66 by way of
partial payment of his share, with the balance
of P196,472.34 to be paid by Juliet in twelve monthly
installment beginning November 1995.
Juliet, however, failed to make good the balance. On
account thereof, John demanded of her to vacate the
annex structure housing the sari-sari store. Juliet
refused, prompting John to file an ejectment suit
against her before the MTC of Mankayan, Benguet.
In his complaint, John alleged that he alone spent for
the construction of the annex structure with his own
funds and thru money he borrowed from his relatives.
In fact, he added that the tax declaration for the
structure was under his name. On this premise, John
claimed exclusive ownership of the subject structure,
which thereby gave him the right to eject Juliet
therefrom upon the latter's failure to pay the agreed
balance due him under the
aforementioned Memorandum of Agreement.
In her answer, Juliet countered that their original
house was renovated thru their common funds and
that the subject structure annexed thereto was merely
an attachment or an extension of their original
residential house, hence the same pertained to the
two of them in common.
In a decision2 dated March 15, 1997, the MTC, on its
finding that the money used in the construction of the
structure in question solely came from John, ruled
that the same exclusively pertained to the latter, and
accordingly ordered Juliet's eviction therefrom,
including the sari-sari store thereat, and required her
to surrender possession thereof to John, thus:
WHEREFORE, judgment is rendered in favor
of the plaintiff (John) and against the
defendant (Juliet).
Defendant is hereby ordered to vacate the
premises of the store in litigation covered by
Tax Declaration No. 96-001-00445 in the
name of the Plaintiff and turn over possession
thereof to the latter.
Defendant is hereby further ordered to pay the
Plaintiff the sum of P2,500.00 a month from
the time she withheld possession of the store
in litigation in June 1996 until she vacates the

same and turn over possession thereof to the


Plaintiff.
Defendant is finally ordered, to pay the sum
of P5,000.00 to the Plaintiff by way of
Attorney's fees; and to pay the costs.
SO ORDERED.
On Juliet's appeal to the RTC, the latter, in its decision
of July 29, 1995, affirmed that of the MTC.
Undaunted, Juliet then went to the CA in CA-G.R. SP
No. 48675.
As stated at the threshold hereof, the CA, in its
Decision of October 24, 2000,3 reversed that of the
RTC, to wit:
WHEREFORE, the petition is GRANTED. The
assailed decision of the Regional Trial Court is
hereby reversed and set aside. Petitioner,
Juliet Waeyan is entitled to possess the
property and maintain therein her business.
SO ORDERED.
Partly says the CA in its reversal disposition:
It is undisputed that the parties lived together
as husband and wife without the benefit of
marriage from 1986 to 1995 and that they
acquired certain properties which must be
divided between them upon the termination of
their common law relationship.
xxx

xxx

xxx

. . . their property relations cannot be


governed by the provision of the Civil Code on
conjugal partnership... but by the rule on coownership.
xxx

xxx

xxx

. . . the parties' share in respect of the


properties they have accumulated during their
cohabitation shall be equal unless there is
proof to the contrary.
To the CA, John's evidence failed to establish that he
alone spent for the construction of the annex
structure. Hence, the same pertained to both, and
being a co-owner herself, Juliet cannot be evicted
therefrom, adding that if ever, John's cause of action

should have been for a sum of money "because he


claims that Juliet still owes him the payment for the
extension." According to the CA, ejectment cannot lie
against Juliet because Juliet's possession of the
premises in dispute was not by virtue of a contract,
express or implied, nor did she obtain such
possession thru force, intimidation, threat, strategy or
stealth.
Hence, John's present recourse, submitting that the
CA erred in
1. not giving effect to the
parties' Memorandum of Agreement which
should have been binding between them
albeit unsigned by both;
2. in holding that the subject premises (annex
structure housing the sari-sari store) is owned
by the two of them in common;
3. in ruling that the parties should settle their
common properties in a separate action for
partition even as the community character of
the subject premises has not been proven.
We AFFIRM with modification.
Essentially, the issues raised center on the core
question of whether or not the property subject of the
suit pertains to the exclusive ownership of petitioner,
John. Departing from the factual findings of the two
courts before it, the CA found that the premises in
dispute is owned in common by Juliet and John, the
latter having failed to establish by the required
quantum of proof that the money spent for the
construction thereof solely came from him. Being a
co-owner of the same structure, Juliet may not be
ejected therefrom.
While the question raised is essentially one of fact, of
which the Court normally eschews from, yet, given the
conflicting factual findings of the three courts below,
the Court shall go by the exception4 to the general
rule and proceed to make its own assessment of the
evidence.
First and foremost, it is undisputed that the parties
hereto lived together as husband and wife from 1986
to 1995 without the benefit of marriage. Neither is it
disputed that sometime in December 1991, Juliet left
for Korea and worked thereat, sending money to John
which the latter deposited in their joint account. In

fact, Juliet was still in Korea when the annex structure


was constructed in 1992.
Other than John's bare allegation that he alone, thru
his own funds and money he borrowed from his
relatives, spent for the construction of the annex
structure, evidence is wanting to support such naked
claim. For sure, John even failed to reveal how much
he spent therefor. Neither did he divulge the names of
the alleged relatives from whom he made his
borrowings, let alone the amount of money he
borrowed from them. All that petitioner could offer by
way of reinforcing his claim of spending his own funds
and borrowed money in putting up the subject
structure was the affidavit executed by a certain
Manuel Macaraeg to the effect that petitioner
borrowedP30,000.00 from him. Even then, Macaraeg
stated in his affidavit that it was sometime in 1990
when John borrowed said amount from him. With the
petitioner's own admission that the subject structure
was constructed only in 1992, or two years after he
borrowed P30,000.00 from Macaraeg, it is even
doubtful whether the amount he allegedly borrowed
from the latter went into the construction of the
structure in dispute. More, it is noted that while
petitioner was able to present in evidence the
Macaraeg affidavit, he failed to introduce similar
affidavits, if any, of his close relatives from whom he
claimed to have made similar borrowings. For sure,
not a single relative came forward to confirm
petitioner's tale. In short, there is a paucity of
evidence, testimonial or documentary, to support
petitioner's self-serving allegation that the annex
structure which housed the sari-sari store was put up
thru his own funds and/or money borrowed by him.
Sure, petitioner has in his favor the tax declaration
covering the subject structure. We have, however,
ruled time and again that tax declarations do not
prove ownership but at best an indicia of claims of
ownership.5 Payment of taxes is not proof of
ownership, any more than indicating possession in
the concept of an owner.6 Neither tax receipts nor
declaration of ownership for taxation purposes are
evidence of ownership or of the right to possess realty
when not supported by other effective proofs.7
In this connection, Article 147 of the Family Code is
instructive. It reads:
Art. 147. When a man and a woman who are
capacitated to marry each other, live
exclusively with each other as husband and
wife without the benefit of marriage or under a
void marriage, their wages and salaries shall
be owned by them in equal shares and the

property acquired by both of them through


their work or industry shall be governed by the
rules on co-ownership.
In the absence of proof to the contrary,
properties acquired while they lived together
shall be presumed to have been obtained by
their joint efforts, work or industry, and shall
be owned by them in equal shares. For
purposes of this Article, a party who did not
participate in the acquisition by other party of
any property shall be deemed to have
contributed jointly in the acquisition thereof if
the former's efforts consisted in the care and
maintenance of the family and of the
household.
The law is clear. In the absence, as here, of proofs to
the contrary, any property acquired by common-law
spouses during their period of cohabitation is
presumed to have been obtained thru their joint
efforts and is owned by them in equal shares. Their
property relationship is governed by the rules on coownership. And under this regime, they owned their
properties in common "in equal shares." Being herself
a co-owner of the structure in question, Juliet, as
correctly ruled by the CA, may not be ejected
therefrom.
True it is that under Article 4878 of the Civil Code, a
co-owner may bring an action for ejectment against a
co-owner who takes exclusive possession and
asserts exclusive ownership of a common property. It
bears stressing, however, that in this case, evidence
is totally wanting to establish John's or Juliet's
exclusive ownership of the property in question.
Neither did Juliet obtain possession thereof by virtue
of a contract, express or implied, or thru intimidation,
threat, strategy or stealth. As borne by the record,
Juliet was in possession of the subject structure and
the sari-sari store thereat by virtue of her being a coowner thereof. As such, she is as much entitled to
enjoy its possession and ownership as John.
We, however, disagree with the ruling of the CA that
the subject Memorandum of Agreement, being
unsigned by Juliet and John, has no binding effect
between them.
It is a matter of record that pursuant to said
Agreement, Juliet did pay John the amount
of P232,397.66, as initial payment for John's share in
their common properties, with the balance
of P196,472.34 payable in twelve monthly

installments beginning November 1995. It is also a


matter of record that the Agreement was signed by
the witnesses thereto. Hence, the irrelevant
circumstances that the Agreement was left unsigned
by Juliet and John cannot adversely affect its binding
force or effect between them, as evidently, Juliet's
initial payment ofP232,397.66 to John was in
fulfillment of what the parties had agreed upon
thereunder. However, and as correctly held by the CA,
Juliet's failure to pay John the balance of the latter's
share in their common properties could at best give
rise to an action for a sum of money against Juliet, or
for rescission of the said agreement and not for
ejectment.
WHEREFORE, the petition is DENIED and the
assailed CA Decision is AFFIRMED, except that
portion thereof denying effect to the parties'
Memorandum of Agreement for being unsigned by
both.
Costs against petitioner.
SO ORDERED.

DINO V DINO

Alain M. Dio (petitioner) and


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

On 30 May 2001, petitioner filed an action for


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

DECISION

CARPIO, J.:

The Case

Before the Court is a petition for


review assailing the 18 October 2006
Decision and the 12 March 2007 Order of the
Regional Trial Court of Las Pias City, Branch
254 (trial court) in Civil Case No. LP-010149.
1

The Antecedent Facts

Extrajudicial service of summons


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

On 30 April 2002, the Office of the


Las Pias prosecutor found that there were no

indicative facts of collusion between the


parties and the case was set for trial on the
merits.

Dr. Nedy L. Tayag (Dr. Tayag), a clinical


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

The dispositive portion of the trial courts


decision reads:

WHEREFORE, in view
foregoing,
judgment
is
rendered:

of the
hereby

1. Declaring the marriage


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

The Decision of the Trial Court

The trial court ruled that based on the


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

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

Let copies of this Decision be furnished


the parties, the Office of the Solicitor
General, Office of the City Prosecutor,
Las Pias City and the Office of the
Local Civil Registrar of Las Pias City,
for their information and guidance.

SO ORDERED.

Petitioner filed a motion for partial


reconsideration questioning the dissolution of
the absolute community of property and the

ruling that the decree of annulment shall only


be issued upon compliance with Articles 50
and 51 of the Family Code.

In its 12 March 2007 Order, the trial court


partially granted the motion and modified its
18 October 2006 Decision as follows:

WHEREFORE, in view
foregoing,
judgment
is
rendered:

of the
hereby

Hence, the petition before this Court.


The Issue
The sole issue in this case is whether the trial
court erred when it ordered that a decree of
absolute nullity of marriage shall only be
issued after liquidation, partition, and
distribution of the parties properties under
Article 147 of the Family Code.
The Ruling of this Court

The petition has merit.


1) Declaring the marriage between
plaintiff ALAIN M. DIO and defendant
MA. CARIDAD L. DIO on January 14,
1998, and all its effects under the law,
as NULL and VOID from the
beginning; and

Petitioner assails the ruling of the trial court


ordering that a decree of absolute nullity of
marriage shall only be issued after liquidation,
partition, and distribution of the parties
properties under Article 147 of the Family
Code. Petitioner argues that Section 19(1) of
the Rule on Declaration of Absolute Nullity of
Null Marriages and Annulment of Voidable
Marriages (the Rule) does not apply to Article
147 of the Family Code.
6

2) Dissolving the regime of absolute


community of property.

We agree with petitioner.


A
DECREE
OF
ABSOLUTE
NULLITY OF MARRIAGE shall be
issued after liquidation, partition and
distribution of the parties properties
under Article 147 of the Family Code.

Let copies of this Order be furnished


the parties, the Office of the Solicitor
General, the Office of the City
Prosecutor of Las Pias City and the
Local Civil Registrar of Las Pias City,
for their information and guidance.
5

The Court has ruled in Valdes v. RTC, Branch


102, Quezon City that in a void marriage,
regardless of its cause, the property relations
of the parties during the period of cohabitation
is governed either by Article 147 or Article
148 of the Family Code. Article 147 of the
Family Code applies to union of parties who
are legally capacitated and not barred by any
impediment to contract marriage, but whose
marriage is nonetheless void, such as
petitioner and respondent in the case before
the Court.
7

Article 147 of the Family Code provides:

Article 147. When a man and a woman


who are capacitated to marry each
other, live exclusively with each other
as husband and wife without the benefit
of marriage or under a void marriage,
their wages and salaries shall be owned
by them in equal shares and the
property acquired by both of them
through their work or industry shall be
governed by the rules on co-ownership.

In the absence of proof to the contrary,


properties acquired while they lived
together shall be presumed to have
been obtained by their joint efforts,
work or industry, and shall be owned
by them in equal shares. For purposes
of this Article, a party who did not
participate in the acquisition by the
other party of any property shall be
deemed to have contributed jointly in
the acquisition thereof if the formers
efforts consisted in the care and
maintenance of the family and of the
household.

Neither party can encumber or dispose


by acts inter vivos of his or her share in
the
property
acquired
during
cohabitation and owned in common,
without the consent of the other, until
after the termination of their
cohabitation.

When only one of the parties to a void


marriage is in good faith, the share of
the party in bad faith in the coownership shall be forfeited in favor of
their common children. In case of
default of or waiver by any or all of the
common children or their descendants,
each vacant share shall belong to the
respective surviving descendants. In the
absence of descendants, such share
shall belong to the innocent party. In all
cases, the forfeiture shall take place
upon termination of the cohabitation.

For Article 147 of the Family Code to apply,


the following elements must be present:

1. The man and the woman must be


capacitated to marry each other;
2. They live exclusively with each other
as husband and wife; and
3. Their union is without the benefit of
marriage, or their marriage is void.
9

All these elements are present in this case and


there is no question that Article 147 of the
Family Code applies to the property relations
between petitioner and respondent.

We agree with petitioner that the trial court


erred in ordering that a decree of absolute
nullity of marriage shall be issued only after
liquidation, partition and distribution of the
parties properties under Article 147 of the

Family Code. The ruling has no basis because


Section 19(1) of the Rule does not apply to
cases governed under Articles 147 and 148 of
the Family Code. Section 19(1) of the Rule
provides:

Sec. 19. Decision. - (1) If the court


renders a decision granting the petition,
it shall declare therein that the decree
of absolute nullity or decree of
annulment shall be issued by the court
only after compliance with Articles 50
and 51 of the Family Code as
implemented under the Rule on
Liquidation, Partition and Distribution
of Properties.

The pertinent provisions of the Family Code


cited in Section 19(1) of the Rule are:

Article 50. The effects provided for in


paragraphs (2), (3), (4) and (5) of
Article 43 and in Article 44 shall also
apply in proper cases to marriages
which are declared void ab initio or
annulled by final judgment under
Articles 40 and 45.

All creditors of the spouses as well as


of the absolute community of the
conjugal partnership shall be notified of
the proceedings for liquidation.

In the partition, the conjugal dwelling


and the lot on which it is situated, shall
be adjudicated in accordance with the
provisions of Articles 102 and 129.

Article 51. In said partition, the value


of the presumptive legitimes of all
common children, computed as of the
date of the final judgment of the trial
court, shall be delivered in cash,
property or sound securities, unless the
parties, by mutual agreement judicially
approved, had already provided for
such matters.

The children of their guardian, or the


trustee of their property, may ask for
the enforcement of the judgment.

10

The final judgment in such cases shall


provide for the liquidation, partition
and distribution of the properties of the
spouses, the custody and support of the
common children, and the delivery of
their presumptive legitimes, unless
such matters had been adjudicated in
previous judicial proceedings.

The
delivery
of
the
presumptive legitimes herein
prescribed shall in no way prejudice the
ultimate successional rights of the
children accruing upon the death of
either or both of the parents; but the
value of the properties already received
under the decree of annulment or
absolute nullity shall be considered as
advances on their legitime.

It is clear from Article 50 of the Family Code


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

need to liquidate, partition and distribute the


properties before a decree of annulment could
be issued. That is not the case for annulment
of marriage under Article 36 of the Family
Code because the marriage is governed by the
ordinary rules on co-ownership.

In this case, petitioners marriage to


respondent was declared void under Article
36 of the Family Code and not under Article
40 or 45. Thus, what governs the liquidation
of properties owned in common by petitioner
and respondent are the rules on co-ownership.
In Valdes, the Court ruled that the
property relations of parties in a void marriage
during the period of cohabitation is governed
either by Article 147 or Article 148 of the
Family Code. The rules on co-ownership
apply and the properties of the spouses should
be liquidated in accordance with the Civil
Code provisions on co-ownership. Under
Article 496 of the Civil Code, [p]artition may
be made by agreement between the parties or
by judicial proceedings. x x x. It is not
necessary to liquidate the properties of the
spouses in the same proceeding for
declaration of nullity of marriage.
15

Article 40 of the Family Code contemplates a


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

x x x where the absolute nullity of a


previous marriage is sought to be
invoked for purposes of contracting a
second marriage, the sole basis
acceptable in law, for said projected
marriage to be free from legal infirmity,
is a final judgment declaring a previous
marriage void.

16

11

Article 45 of the Family Code, on the other


hand, refers to voidable marriages, meaning,
marriages which are valid until they are set
aside by final judgment of a competent court
in an action for annulment. In both instances
under Articles 40 and 45, the marriages are
governed either by absolute community of
property or conjugal partnership of
gains unless the parties agree to a complete
separation of property in a marriage
settlement entered into before the marriage.
Since the property relations of the parties is
governed by absolute community of property
or conjugal partnership of gains, there is a
12

13

14

WHEREFORE, we AFFIRM the Decision


of the trial court with
the MODIFICATION that the decree of
absolute nullity of the marriage shall be issued
upon finality of the trial courts decision
without waiting for the liquidation, partition,
and distribution of the parties properties under
Article 147 of the Family Code.
SO ORDERED.
OCAMPO V OCAMPO

DECISION
PERALTA, J.:
This is a Petition for Review on Certiorari under Rule 45 of
the Rules of Court seeking the reversal of the
Decision1 dated August 11, 2010 and Resolution2 dated
October 5, 2011, respectively, of the Court of Appeals
(CA) in CA-G.R. CV No. 82318, which denied the
petitioner's appeal and motion for reconsideration.
The facts of the case, as culled from the records, are as
follows:
LawlibraryofCRAlaw

On September 10, 1990, petitioner Virginia Sy Ocampo


(Virginia) filed a Petition for Declaration of Nullity of her
Marriage with Deogracio Ocampo (Deogracio) before
Regional Trial Court of Quezon City, Branch 87, on the
ground of psychological incapacity, docketed as Civil Case
No. Q-90-6616.3
redarclaw

On January 22, 1993, the trial court rendered a


Decision4 declaring the marriage between Virginia and
Deogracio as null and void, the dispositive portion of
which reads:
LawlibraryofCR Alaw

WHEREFORE, the petition is hereby GRANTED. The


marriage between the petitioner and the respondent is
hereby declared null and void from the beginning under
Article 36 of the Family Code. The status of their children,
however, shall remain legitimate and their custody is
hereby awarded to the petitioner.
As to the couple's property relations, their conjugal
partnership of gains shall necessarily be dissolved and
liquidated but since the petitioner has not submitted any
detailed and formal listing or inventory of such property,
the court cannot act now on the liquidation aspect. The
parties are given thirty (30) days to submit an inventory
of their conjugal partnership for the purpose of liquidation.
IT IS SO ORDERED.5
The decision became final, since no party appealed the
judgment annulling the marriage.
On March 31, 1999, the trial court directed the parties to
submit a project of partition of their inventoried
properties, and if they failed to do so, a hearing will be
held on the factual issues with regard to said properties.
Having failed to agree on a project of partition of their
conjugal properties, hearing ensued where the parties
adduced evidence in support of their respective stand.
On January 13, 2004, the trial court rendered the assailed
Order6 stating that the properties declared by the parties
belong to each one of them on a 50-50 sharing.
On February 2, 2004, Virginia filed a Notice of Appeal
before the trial court.
On February 13, 2004, Deogracio filed a Motion to Deny
and/or Dismiss the Notice of Appeal and for immediate
execution pursuant to Section 20 of A.M. No. 02-1-10.
On February 20, 2004, the trial court denied the aforesaid
motion to deny and/or dismiss the notice of appeal for
lack of merit.

On March 4, 2004, Deogracio filed a Motion for


Reconsideration. On March 22, 2004, the trial court denied
anew the motion for reconsideration.
In the disputed Decision dated August 11, 2010, the Court
of Appeals denied Virginia's appeal. Virginia moved for
reconsideration, but was denied in a Resolution dated
October 5, 2011.
Thus, the instant petition for review substantially
questioning whether respondent should be deprived of his
share in the conjugal partnership of gains by reason of
bad faith and psychological perversity.
The petition lacks merit.
While Virginia and Deogracio tied the marital knot on
January 16, 1978, it is still the Family Code provisions on
conjugal partnerships, however, which will govern the
property relations between Deogracio and Virginia even if
they were married before the effectivity of the Family
Code.
Article 105 of the Family Code explicitly mandates that the
Family Code shall apply to conjugal partnerships
established before the Family Code without prejudice to
vested rights already acquired under the Civil Code or
other laws. Thus, under the Family Code, if the properties
are acquired during the marriage, the presumption is that
they are conjugal. Hence, the burden of proof is on the
party claiming that they are not conjugal. This is counterbalanced by the requirement that the properties must first
be proven to have been acquired during the marriage
before they are presumed conjugal.7
redarclaw

The applicable law, however, in so far as the liquidation of


the conjugal partnership assets and liability is concerned,
is Article 1298 of the Family Code in relation to Article 147
of the Family Code.9
redarclaw

The Court held that in a void marriage, as in those


declared void under Article 3610 of the Family Code, the
property relations of the parties during the period of
cohabitation is governed either by Article 147 or Article
148 of the Family Code.11 Article 147 of the Family Code
applies to union of parties who are legally capacitated and
not barred by any impediment to contract marriage, but
whose marriage is nonetheless void, as in this case.
Article 147 of the Family Code provides:
LawlibraryofCRAlaw

Article 147. When a man and a woman who are


capacitated to marry each other, live exclusively with each
other as husband and wife without the benefit of marriage
or under a void marriage, their wages and salaries shall
be owned by them in equal shares and the property
acquired by both of them through their work or industry
shall be governed by the rules on co-ownership.
In the absence of proof to the contrary, properties
acquired while they lived together shall be
presumed to have been obtained by their joint
efforts, work or industry, and shall be owned by
them in equal shares. For purposes of this Article, a
party who did not participate in the acquisition by
the other party of any property shall be deemed to
have contributed jointly in the acquisition thereof if
the formers efforts consisted in the care and
maintenance of the family and of the household.

Neither party can encumber or dispose by acts inter vivos


of his or her share in the property acquired during
cohabitation and owned in common, without the consent
of the other, until after the termination of their
cohabitation.
When only one of the parties to a void marriage is in good
faith, the share of the party in bad faith in the coownership shall be forfeited in favor of their common
children. In case of default of or waiver by any or all of
the common children or their descendants, each vacant
share shall belong to the respective surviving
descendants. In the absence of descendants, such share
shall belong to the innocent party. In all cases, the
forfeiture shall take place upon termination of the
cohabitation.12
This particular kind of co-ownership applies when a man
and a woman, suffering no illegal impediment to marry
each other, exclusively live together as husband and wife
under a void marriage or without the benefit of marriage.
It is clear, therefore, that for Article 147 to operate, the
man and the woman: (1) must be capacitated to marry
each other; (2) live exclusively with each other as
husband and wife; and (3) their union is without the
benefit of marriage or their marriage is void, as in the
instant case. The term "capacitated" in the first paragraph
of the provision pertains to the legal capacity of a party to
contract marriage. Any impediment to marry has not been
shown to have existed on the part of either Virginia or
Deogracio. They lived exclusively with each other as
husband and wife. However, their marriage was found to
be void under Article 36 of the Family Code on the ground
of psychological incapacity.13

This Court keenly observes that only testimonial evidence


was presented by the parties respectively, to prove and
dispute the claim of the other with regard to the
properties and assets acquired during the marriage. In the
absence, therefore, of any documentary evidence to prove
the contrary, all the properties acquired by the spouses
during the marriage are presumed conjugal. Further, the
testimonial evidence adduced by the petitioner aimed at
establishing that respondent took no part in acquiring said
properties failed to convince this Court that the latter be
given only a meager share thereof.
While it may be true that management of the businesses
referred to herein may have been actively undertaken by
the petitioner, it cannot be gainsaid that petitioner was
able to do so without the invaluable help of respondent.
Even a plain housewife who stays all the time in the house
and take[s] care of the household while the husband
indulges in lucrative and gainful activities is entitled to a
share in the same proportion the husband is, to the
property or properties acquired by the marriage. In the
same breadth, respondent must be considered to be
entitled to the same extent. Petitioner's claim that the
seed money in that business was provided by her mother
and that, had it not been for that reason, the properties
now subject of controversy could not have been acquired.
That may be true but the Court is not prone to believe so
because of insufficient evidence to prove such contention
but petitioner's self-serving allegations. Of course,
attempts to establish respondent as an irresponsible and
unfaithful husband, as well as family man were made but
the testimonies adduced towards that end, failed to fully
convince the Court that respondent should be punished by
depriving him of his share of the conjugal property
because of his indiscretion.16

re darclaw

From the foregoing, property acquired by both spouses


through their work and industry should, therefore, be
governed by the rules on equal co-ownership. Any
property acquired during the union isprima
facie presumed to have been obtained through their joint
efforts. A party who did not participate in the acquisition
of the property shall be considered as having contributed
to the same jointly if said party's efforts consisted in the
care and maintenance of the family household. Efforts in
the care and maintenance of the family and household are
regarded as contributions to the acquisition of common
property by one who has no salary or income or work or
industry.14
re darclaw

Citing Valdes v. RTC,15 the Court held that the court a


quo did not commit a reversible error in utilizing Article
147 of the Family Code and in ruling that the former
spouses own the family home and all their common
property in equal shares, as well as in concluding that, in
the liquidation and partition of the property that they
owned in common, the provisions on co-ownership under
the Civil Code should aptly prevail. The rules which are set
up to govern the liquidation of either the absolute
community or the conjugal partnership of gains, the
property regimes recognized for valid and voidable
marriages, are irrelevant to the liquidation of the coownership that exists between common-law spouses or
spouses of void marriages.
Thus, the trial court and the appellate court correctly held
that the parties will share on equal shares considering
that Virginia failed to prove that the properties were
acquired solely on her own efforts, to wit:
LawlibraryofCR Alaw

In the instant case, both the trial and appellate courts


agreed that the subject properties were in fact acquired
during the marriage of Virginia and Deogracio. We give
due deference to factual findings of trial courts, especially
when affirmed by the appellate court, as in this case. A
reversal of this finding can only occur if petitioners show
sufficient reason for us to doubt its correctness. There is
none, in this case.
Likewise, we note that the former spouses both
substantially agree that they acquired the subject
properties during the subsistence of their marriage.17 The
certificates of titles and tax declarations are not sufficient
proof to overcome the presumption under Article 116 of
the Family Code. All properties acquired by the spouses
during the marriage, regardless in whose name the
properties are registered, are presumed conjugal unless
proved otherwise. The presumption is not rebutted by the
mere fact that the certificate of title of the property or the
tax declaration is in the name of one of the spouses only.
Article 116 expressly provides that the presumption
remains even if the property is "registered in the name of
one or both of the spouses."18 Thus, the failure of Virginia
to rebut this presumption, said properties were obtained
by the spouses' joint efforts, work or industry, and shall
be jointly owned by them in equal shares. Accordingly,
the partition of the former spouses' properties on the
basis of co-ownership, as ordered by the RTC and the
appellate court, should be affirmed, and not on the regime
of conjugal partnership of gains.
WHEREFORE, the petition is DENIED. The Decision
dated August 11, 2010 and the Resolution dated October

5, 2011 of the Court of Appeals in CA-G.R. CV No. 82318


are AFFIRMED. The case isREMANDED to the trial court
for proper disposition.
SO ORDERED.

cralawla wlibrary

CARINO V CARINO

DECISION
YNARES-SANTIAGO, J.:
The issue for resolution in the case at bar hinges on
the validity of the two marriages contracted by the
deceased SPO4 Santiago S. Cario, whose death
benefits is now the subject of the controversy
between the two Susans whom he married.
1wphi1.nt

Before this Court is a petition for review on certiorari


seeking to set aside the decision 1 of the Court of
Appeals in CA-G.R. CV No. 51263, which affirmed in
toto the decision 2 of the Regional Trial Court of
Quezon City, Branch 87, in Civil Case No. Q-9318632.
During the lifetime of the late SPO4 Santiago S.
Cario, he contracted two marriages, the first was on
June 20, 1969, with petitioner Susan Nicdao Cario
(hereafter referred to as Susan Nicdao), with whom
he had two offsprings, namely, Sahlee and Sandee
Cario; and the second was on November 10, 1992,
with respondent Susan Yee Cario (hereafter referred
to as Susan Yee), with whom he had no children in
their almost ten year cohabitation starting way back in
1982.
In 1988, SPO4 Santiago S. Cario became ill and
bedridden due to diabetes complicated by pulmonary
tuberculosis. He passed away on November 23,
1992, under the care of Susan Yee, who spent for his
medical and burial expenses. Both petitioner and
respondent filed claims for monetary benefits and
financial assistance pertaining to the deceased from
various government agencies. Petitioner Susan
Nicdao was able to collect a total of P146,000.00 from
MBAI, PCCUI, Commutation, NAPOLCOM, [and]
Pag-ibig, 3 while respondent Susan Yee received a
total of P21,000.00 from GSIS Life, Burial (GSIS) and
burial (SSS). 4

half of the one hundred forty-six thousand pesos


(P146,000.00) collectively denominated as death
benefits which she (petitioner) received from MBAI,
PCCUI, Commutation, NAPOLCOM, [and] Pag-ibig.
Despite service of summons, petitioner failed to file
her answer, prompting the trial court to declare her in
default.
Respondent Susan Yee admitted that her marriage to
the deceased took place during the subsistence of,
and without first obtaining a judicial declaration of
nullity of, the marriage between petitioner and the
deceased. She, however, claimed that she had no
knowledge of the previous marriage and that she
became aware of it only at the funeral of the
deceased, where she met petitioner who introduced
herself as the wife of the deceased. To bolster her
action for collection of sum of money, respondent
contended that the marriage of petitioner and the
deceased is void ab initio because the same was
solemnized without the required marriage license. In
support thereof, respondent presented: 1) the
marriage certificate of the deceased and the petitioner
which bears no marriage license number; 5 and 2) a
certification dated March 9, 1994, from the Local Civil
Registrar of San Juan, Metro Manila, which reads
This is to certify that this Office has no record of
marriage license of the spouses SANTIAGO CARINO
(sic) and SUSAN NICDAO, who are married in this
municipality on June 20, 1969. Hence, we cannot
issue as requested a true copy or transcription of
Marriage License number from the records of this
archives.
This certification is issued upon the request of Mrs.
Susan Yee Cario for whatever legal purpose it may
serve. 6
On August 28, 1995, the trial court ruled in favor of
respondent, Susan Yee, holding as follows:
WHEREFORE, the defendant is hereby ordered to
pay the plaintiff the sum of P73,000.00, half of the
amount which was paid to her in the form of death
benefits arising from the death of SPO4 Santiago S.
Cario, plus attorneys fees in the amount of
P5,000.00, and costs of suit.
IT IS SO ORDERED. 7

On December 14, 1993, respondent Susan Yee filed


the instant case for collection of sum of money
against petitioner Susan Nicdao praying, inter alia,
that petitioner be ordered to return to her at least one-

On appeal by petitioner to the Court of Appeals, the


latter affirmed in toto the decision of the trial court.
Hence, the instant petition, contending that:

I.
THE HONORABLE COURT OF APPEALS
GRAVELY ERRED IN AFFIRMING THE
FINDINGS OF THE LOWER COURT THAT
VDA. DE CONSUEGRA VS. GSIS IS
APPLICABLE TO THE CASE AT BAR.
II.
THE HONORABLE COURT OF APPEALS
GRAVELY ERRED IN APPLYING EQUITY IN
THE INSTANT CASE INSTEAD OF THE
CLEAR AND UNEQUIVOCAL MANDATE OF
THE FAMILY CODE.
III.
THE HONORABLE COURT OF APPEALS
GRAVELY ERRED IN NOT FINDING THE
CASE OF VDA. DE CONSUEGRA VS GSIS
TO HAVE BEEN MODIFIED, AMENDED AND
EVEN ABANDONED BY THE ENACTMENT
OF THE FAMILY CODE. 8
Under Article 40 of the Family Code, the absolute
nullity of a previous marriage may be invoked for
purposes of remarriage on the basis solely of a final
judgment declaring such previous marriage void.
Meaning, where the absolute nullity of a previous
marriage is sought to be invoked for purposes of
contracting a second marriage, the sole basis
acceptable in law, for said projected marriage to be
free from legal infirmity, is a final judgment declaring
the previous marriage void. 9 However, for purposes
other than remarriage, no judicial action is necessary
to declare a marriage an absolute nullity. For other
purposes, such as but not limited to the determination
of heirship, legitimacy or illegitimacy of a child,
settlement of estate, dissolution of property regime, or
a criminal case for that matter, the court may pass
upon the validity of marriage even after the death of
the parties thereto, and even in a suit not directly
instituted to question the validity of said marriage, so
long as it is essential to the determination of the
case. 10 In such instances, evidence must be adduced,
testimonial or documentary, to prove the existence of
grounds rendering such a previous marriage an
absolute nullity. These need not be limited solely to an
earlier final judgment of a court declaring such
previous marriage void. 11
It is clear therefore that the Court is clothed with
sufficient authority to pass upon the validity of the two

marriages in this case, as the same is essential to the


determination of who is rightfully entitled to the
subject death benefits of the deceased.
Under the Civil Code, which was the law in force
when the marriage of petitioner Susan Nicdao and the
deceased was solemnized in 1969, a valid marriage
license is a requisite of marriage, 12 and the absence
thereof, subject to certain exceptions, 13 renders the
marriage void ab initio. 14
In the case at bar, there is no question that the
marriage of petitioner and the deceased does not fall
within the marriages exempt from the license
requirement. A marriage license, therefore, was
indispensable to the validity of their marriage. This
notwithstanding, the records reveal that the marriage
contract of petitioner and the deceased bears no
marriage license number and, as certified by the
Local Civil Registrar of San Juan, Metro Manila, their
office has no record of such marriage license.
In Republic v. Court of Appeals, 15 the Court held that
such a certification is adequate to prove the nonissuance of a marriage license. Absent any
circumstance of suspicion, as in the present case, the
certification issued by the local civil registrar enjoys
probative value, he being the officer charged under
the law to keep a record of all data relative to the
issuance of a marriage license.
Such being the case, the presumed validity of the
marriage of petitioner and the deceased has been
sufficiently overcome. It then became the burden of
petitioner to prove that their marriage is valid and that
they secured the required marriage license. Although
she was declared in default before the trial court,
petitioner could have squarely met the issue and
explained the absence of a marriage license in her
pleadings before the Court of Appeals and this Court.
But petitioner conveniently avoided the issue and
chose to refrain from pursuing an argument that will
put her case in jeopardy. Hence, the presumed
validity of their marriage cannot stand.
It is beyond cavil, therefore, that the marriage
between petitioner Susan Nicdao and the deceased,
having been solemnized without the necessary
marriage license, and not being one of the marriages
exempt from the marriage license requirement, is
undoubtedly void ab initio.
It does not follow from the foregoing disquisition,
however, that since the marriage of petitioner and the
deceased is declared void ab initio, the death

benefits under scrutiny would now be awarded to


respondent Susan Yee. To reiterate, under Article 40
of the Family Code, for purposes of remarriage, there
must first be a prior judicial declaration of the nullity of
a previous marriage, though void, before a party can
enter into a second marriage, otherwise, the second
marriage would also be void.
Accordingly, the declaration in the instant case of
nullity of the previous marriage of the deceased and
petitioner Susan Nicdao does not validate the second
marriage of the deceased with respondent Susan
Yee. The fact remains that their marriage was
solemnized without first obtaining a judicial decree
declaring the marriage of petitioner Susan Nicdao and
the deceased void. Hence, the marriage of
respondent Susan Yee and the deceased is, likewise,
void ab initio.
One of the effects of the declaration of nullity of
marriage is the separation of the property of the
spouses according to the applicable property
regime. 16 Considering that the two marriages are void
ab initio, the applicable property regime would not be
absolute community or conjugal partnership of
property, but rather, be governed by the provisions of
Articles 147 and 148 of the Family Code on Property
Regime of Unions Without Marriage.
Under Article 148 of the Family Code, which refers to
the property regime of bigamous marriages,
adulterous relationships, relationships in a state of
concubine, relationships where both man and woman
are married to other persons, multiple alliances of the
same married man, 17 ... [O]nly the properties acquired by both of the
parties through their actual joint contribution of
money, property, or industry shall be owned by them
in common in proportion to their respective
contributions ...
In this property regime, the properties acquired by the
parties through their actual joint contribution shall
belong to the co-ownership. Wages and salaries
earned by each party belong to him or her exclusively.
Then too, contributions in the form of care of the
home, children and household, or spiritual or moral
inspiration, are excluded in this regime. 18

(between petitioner and the deceased), the


application of Article 148 is therefore in order.
The disputed P146,000.00 from MBAI [AFP Mutual
Benefit Association, Inc.], NAPOLCOM, Commutation,
Pag-ibig, and PCCUI, are clearly renumerations,
incentives and benefits from governmental agencies
earned by the deceased as a police officer. Unless
respondent Susan Yee presents proof to the contrary,
it could not be said that she contributed money,
property or industry in the acquisition of these
monetary benefits. Hence, they are not owned in
common by respondent and the deceased, but belong
to the deceased alone and respondent has no right
whatsoever to claim the same. By intestate
succession, the said death benefits of the deceased
shall pass to his legal heirs. And, respondent, not
being the legal wife of the deceased is not one of
them.
As to the property regime of petitioner Susan Nicdao
and the deceased, Article 147 of the Family Code
governs. This article applies to unions of parties who
are legally capacitated and not barred by any
impediment to contract marriage, but whose marriage
is nonetheless void for other reasons, like the
absence of a marriage license. Article 147 of the
Family Code reads Art. 147. When a man and a woman who are
capacitated to marry each other, live exclusively with
each other as husband and wife without the benefit of
marriage or under a void marriage, their wages and
salaries shall be owned by them in equal shares and
the property acquired by both of them through their
work or industry shall be governed by the rules on coownership.
In the absence of proof to the contrary, properties
acquired while they lived together shall be presumed
to have been obtained by their joint efforts, work or
industry, and shall be owned by them in equal shares.
For purposes of this Article, a party who did not
participate in the acquisition by the other party of any
property shall be deemed to have contributed jointly
in the acquisition thereof if the formers efforts
consisted in the care and maintenance of the family
and of the household.
xxx

Considering that the marriage of respondent Susan


Yee and the deceased is a bigamous marriage,
having been solemnized during the subsistence of a
previous marriage then presumed to be valid

When only one of the parties to a void marriage is in


good faith, the share of the party in bad faith in the
co-ownership shall be forfeited in favor of their

common children. In case of default of or waiver by


any or all of the common children or their
descendants, each vacant share shall belong to the
respective surviving descendants. In the absence of
descendants, such share shall belong to the innocent
party. In all cases, the forfeiture shall take place upon
termination of the cohabitation.
In contrast to Article 148, under the foregoing article,
wages and salaries earned by either party during the
cohabitation shall be owned by the parties in equal
shares and will be divided equally between them,
even if only one party earned the wages and the other
did not contribute thereto. 19 Conformably, even if the
disputed death benefits were earned by the
deceased alone as a government employee, Article
147 creates a co-ownership in respect thereto,
entitling the petitioner to share one-half thereof. As
there is no allegation of bad faith in the present case,
both parties of the first marriage are presumed to be
in good faith. Thus, one-half of the subject death
benefits under scrutiny shall go to the petitioner as
her share in the property regime, and the other half
pertaining to the deceased shall pass by, intestate
succession, to his legal heirs, namely, his children
with Susan Nicdao.
In affirming the decision of the trial court, the Court of
Appeals relied on the case of Vda. de Consuegra v.
Government Service Insurance System, 20 where the
Court awarded one-half of the retirement benefits of
the deceased to the first wife and the other half, to the
second wife, holding that:
... [S]ince the defendants first marriage has not been
dissolved or declared void the conjugal partnership
established by that marriage has not ceased. Nor has
the first wife lost or relinquished her status as putative
heir of her husband under the new Civil Code, entitled
to share in his estate upon his death should she
survive him. Consequently, whether as conjugal
partner in a still subsisting marriage or as such
putative heir she has an interest in the husbands
share in the property here in dispute.... And with
respect to the right of the second wife, this Court
observed that although the second marriage can be
presumed to be void ab initio as it was celebrated
while the first marriage was still subsisting, still there
is need for judicial declaration of such nullity. And
inasmuch as the conjugal partnership formed by the
second marriage was dissolved before judicial
declaration of its nullity, [t]he only just and equitable
solution in this case would be to recognize the right of
the second wife to her share of one-half in the
property acquired by her and her husband, and

consider the other half as pertaining to the conjugal


partnership of the first marriage. 21
It should be stressed, however, that the aforecited
decision is premised on the rule which requires a prior
and separate judicial declaration of nullity of marriage.
This is the reason why in the said case, the Court
determined the rights of the parties in accordance
with their existing property regime.
In Domingo v. Court of Appeals, 22 however, the Court,
construing Article 40 of the Family Code, clarified that
a prior and separate declaration of nullity of a
marriage is an all important condition precedent only
for purposes of remarriage. That is, if a party who is
previously married wishes to contract a second
marriage, he or she has to obtain first a judicial
decree declaring the first marriage void, before he or
she could contract said second marriage, otherwise
the second marriage would be void. The same rule
applies even if the first marriage is patently void
because the parties are not free to determine for
themselves the validity or invalidity or their marriage.
However, for purposes other than to remarry, like for
filing a case for collection of sum of money anchored
on a marriage claimed to be valid, no prior and
separate judicial declaration of nullity is necessary. All
that a party has to do is to present evidence,
testimonial or documentary, that would prove that the
marriage from which his or her rights flow is in fact
valid. Thereupon, the court, if material to the
determination of the issues before it, will rule on the
status of the marriage involved and proceed to
determine the rights of the parties in accordance with
the applicable laws and jurisprudence. Thus, in Nial
v. Bayadog, 23 the Court explained:
[T]he court may pass upon the validity of marriage
even in a suit not directly instituted to question the
same so long as it is essential to the determination of
the case. This is without prejudice to any issue that
may arise in the case. When such need arises, a final
judgment of declaration of nullity is necessary even if
the purpose is other than to remarry. The clause on
the basis of a final judgment declaring such previous
marriage void in Article 40 of the Family Code
connoted that such final judgment need not be
obtained only for purpose of remarriage.
WHEREFORE, the petition is GRANTED, and the
decision of the Court of Appeals in CA-G.R. CV No.
51263 which affirmed the decision of the Regional
Trial Court of Quezon City ordering petitioner to pay
respondent the sum of P73,000.00 plus attorneys

fees in the amount of P5,000.00, is REVERSED and


SET ASIDE. The complaint in Civil Case No. Q-9318632, is hereby DISMISSED. No pronouncement as
to costs.
1wphi1.nt

not ebb away the conflict with petitioners


relatives. In 1996, the couple decided to
separate and end up their 9-year
cohabitation.
[6]

SO ORDERED.
SAGUID V CA

DECISION
YNARES-SANTIAGO, J.:

The regime of limited co-ownership of


property governing the union of parties
who are not legally capacitated to marry
each other, but who nonetheless live
together as husband and wife, applies to
properties
acquired
during
said
cohabitation in proportion to their
respective contributions. Co-ownership
will only be up to the extent of the proven
actual contribution of money, property or
industry. Absent proof of the extent
thereof,
their
contributions
and
corresponding shares shall be presumed
to be equal.
[1]

Seventeen-year old Gina S. Rey was


married, but separated de facto from her
husband, when she met petitioner Jacinto
Saguid in Marinduque, sometime in July
1987. After a brief courtship, the two
decided to cohabit as husband and wife in
a house built on a lot owned by Jacintos
father. Their cohabitation was not
blessed with any children. Jacinto made a
living as the patron of their fishing vessel
Saguid Brothers. Gina, on the other
hand, worked as a fish dealer, but
decided to work as an entertainer in
Japan from 1992 to 1994 when her
relationship with Jacintos relatives turned
sour. Her periodic absence, however, did
[2]

[3]

[4]

[5]

On January 9, 1997, private


respondent filed a complaint for Partition
and Recovery of Personal Property with
Receivership against the petitioner with
the Regional Trial Court of Boac,
Marinduque. She alleged that from her
salary of $1,500.00 a month as
entertainer in Japan, she was able to
contribute P70,000.00 in the completion
of their unfinished house. Also, from her
own earnings as an entertainer and fish
dealer, she was able to acquire and
accumulate
appliances,
pieces
of
furniture and household effects, with a
total value of P111,375.00. She prayed
that she be declared the sole owner of
these personal properties and that the
amount of P70,000.00, representing her
contribution to the construction of their
house, be reimbursed to her.
Private respondent testified that she
deposited part of her earnings in her
savings account with First Allied
Development Bank. Her Pass Book
shows that as of May 23, 1995, she had a
balance of P21,046.08. She further
stated that she had a total of
P35,465.00 share in the joint account
deposit which she and the petitioner
maintained with the same bank. Gina
declared that said deposits were spent for
the purchase of construction materials,
appliances and other personal properties.
[7]

[8]

[9]

[10]

[11]

In his answer to the complaint,


petitioner claimed that the expenses for
[12]

the construction of their house were


defrayed solely from his income as a
captain of their fishing vessel. He averred
that private respondents meager income
as fish dealer rendered her unable to
contribute in the construction of said
house. Besides, selling fish was a mere
pastime to her; as such, she was
contented with the small quantity of fish
allotted to her from his fishing
trips. Petitioner further contended that
Gina did not work continuously in Japan
from 1992 to 1994, but only for a 6-month
duration each year. When their house
was repaired and improved sometime in
1995-1996, private respondent did not
share in the expenses because her
earnings as entertainer were spent on the
daily needs and business of her
parents. From his income in the fishing
business, he claimed to have saved a
total of P130,000.00, P75,000.00 of which
was placed in a joint account deposit with
private
respondent. This
savings,
according to petitioner was spent in
purchasing
the
disputed
personal
properties.
On May 21, 1997, the trial court
declared the petitioner as in default for
failure to file a pre-trial brief as required
by Supreme Court Circular No. 1-89.
[13]

On May 26, 1997, petitioner filed a


motion for reconsideration of the May
21, 1997 order, which was denied on
June 2, 1997, and private respondent was
allowed to present evidence ex parte.
Petitioner filed another motion for
reconsideration but the same was also
denied on October 8, 1997.
[14]

[15]

On July 15, 1998, a decision was


rendered in favor of private respondent,
the dispositive portion of which reads:
[16]

WHEREFORE, in view of all the foregoing,


judgment is hereby rendered in favor of the
plaintiff Gina S. Rey against defendant
Jacinto Saguid:
a) Ordering the partition of the house
identified as plaintiffs Exhibit C and D and
directing the defendant to return and/or
reimburse to the plaintiff the amount of
seventy thousand pesos (P70,000,00) which
the latter actually contributed to its
construction and completion;
b) Declaring the plaintiff as the exclusive
owner of the personal properties listed on
Exhibit M;
c) Ordering the defendant, and/or anyone in
possession of the aforesaid personal
properties, to return and/or deliver the same to
the plaintiff; and
d) Ordering the defendant to pay the plaintiff
moral damages in the sum of fifty thousand
pesos (P50,000.00) plus the costs of suit.
SO ORDERED.

[17]

On appeal, said decision was affirmed


by the Court of Appeals; however, the
award of P50,000.00 as moral damages
was deleted for lack of basis. The
appellate court ruled that the propriety of
the order which declared the petitioner as
in default became moot and academic in
view of the effectivity of the 1997 Rules of
Civil Procedure. It explained that the new
rules now require the filing of a pre-trial
brief and the defendants non-compliance
[18]

therewith entitles the plaintiff to present


evidence ex parte.
Both parties filed motions for
reconsideration which were denied;
hence, petitioner filed the instant petition
based on the following assigned errors:

pre-trial, i.e., the plaintiff may present his


evidence ex parte and the court shall
render judgment on the basis thereof.
The remedy of the defendant is to file a
motion for reconsideration showing that
his failure to file a pre-trial brief was due
to fraud, accident, mistake or excusable
neglect. The motion need not really
stress the fact that the defendant has a
valid and meritorious defense because
his answer which contains his defenses is
already on record.
[20]

[21]

[22]

A.

THE HONORABLE COURT OF APPEALS


COMMIT[TED] A REVERSIBLE ERROR
IN APPLYING RETROACTIVELY THE
1997 RULES OF CIVIL PROCEDURE IN
THE PRESENT CASE AND HOLDING THE
FIRST ASSIGNED ERROR THEREIN
MOOT AND ACADEMIC THUS, FAILED
TO RULE ON THE PROPRIETY OF THE
TRIAL COURTS REFUSAL TO SET ASIDE
THE ORDER OF DEFAULT DUE TO
MISTAKE AND/OR EXCUSABLE
NEGLIGENCE COMMITTED BY
PETITIONER.
B.

[23]

In the case at bar, petitioner insists


that his failure to file a pre-trial brief is
justified because he was not represented
by counsel. This justification is not,
however, sufficient to set aside the order
directing private respondent to present
evidence ex parte, inasmuch as the
petitioner chose at his own risk not to be
represented by counsel. Even without the
assistance of a lawyer, petitioner was
able to file a motion for extension to file
answer, the required answer stating
therein the special and affirmative
defenses, and several other motions. If
it were true that petitioner did not
understand the import of the April 23,
1997 order directing him to file a pre-trial
brief, he could have inquired from the
court or filed a motion for extension of
time to file the brief. Instead, he waited
until May 26, 1997, or 14 days from his
alleged receipt of the April 23, 1997 order
before he filed a motion asking the court
to excuse his failure to file a brief. Pre-trial
rules are not to be belittled or dismissed
because their non-observance may result
in prejudice to a partys substantive
rights. Like all rules, they should be
followed except only for the most
persuasive of reasons when they may be
[24]

THE HONORABLE COURT OF APPEALS


COMMIT[TED] A REVERSIBLE ERROR
IN RELYING ON THE FACTUAL
FINDINGS OF THE TRIAL COURT
WHICH RECEIVED THE EVIDENCE OF
HEREIN RESPONDENT ONLY EX PARTE.
[19]

The issues for resolution are: (1)


whether or not the trial court erred in
allowing private respondent to present
evidence ex parte; and (2) whether or not
the trial courts decision is supported by
evidence.
Under Section 6, Rule 18 of the 1997
Rules of Civil Procedure, the failure of the
defendant to file a pre-trial brief shall have
the same effect as failure to appear at the

[25]

[26]

relaxed to relieve a litigant of an injustice


not commensurate with the degree of his
thoughtlessness in not complying with the
procedure prescribed.
[27]

In the instant case, the fact that


petitioner was not assisted by a lawyer is
not a persuasive reason to relax the
application of the rules. There is nothing
in the Constitution which mandates that a
party in a non-criminal proceeding be
represented by counsel and that the
absence of such representation amounts
to a denial of due process. The
assistance of lawyers, while desirable, is
not indispensable. The legal profession is
not engrafted in the due process clause
such that without the participation of its
members the safeguard is deemed
ignored or violated.
[28]

Coming now to the substantive issue,


it is not disputed that Gina and Jacinto
were not capacitated to marry each other
because the former was validly married to
another man at the time of her
cohabitation with the latter. Their property
regime therefore is governed by Article
148 of the Family Code, which applies to
bigamous
marriages,
adulterous
relationships, relationships in a state of
concubinage, relationships where both
man and woman are married to other
persons, and multiple alliances of the
same married man. Under this regime,
only the properties acquired by both of
the parties through their actual joint
contribution of money, property, or
industry shall be owned by them in
common in proportion to their respective
contributions
... Proof
of
actual
contribution is required.
[30]

[31]

[32]

However, the Court of Appeals erred


in ruling that the effectivity of the 1997
Rules of Civil Procedure, specifically,
Section 6, Rule 18 thereof, rendered moot
and academic the issue of whether or not
the plaintiff may be allowed to present
evidence ex parte for failure of the
defendant to file a pre-trial brief. While the
rules may indeed be applied retroactively,
the same is not called for in the case at
bar. Even before the 1997 Rules of Civil
Procedure took effect on July 1, 1997, the
filing of a pre-trial brief was required
under Circular No. 1-89 which became
effective on February 1, 1989. Pursuant to
the said circular, [f]ailure to file pre-trial
briefs may be given the same effect as
the failure to appear at the pre-trial, that
is, the party may be declared non-suited
or considered as in default.
[29]

In the case at bar, although the


adulterous cohabitation of the parties
commenced in 1987, which is before the
date of the effectivity of the Family Code
on August 3, 1998, Article 148 thereof
applies because this provision was
intended precisely to fill up the hiatus in
Article 144 of the Civil Code. Before
Article 148 of the Family Code was
enacted, there was no provision
governing property relations of couples
living in a state of adultery or
concubinage. Hence,
even
if
the
cohabitation or the acquisition of the
property occurred before the Family Code
took effect, Article 148 governs.
[33]

[34]

In the cases of Agapay v. Palang,


and Tumlos
v.
Fernandez, which
involved the issue of co-ownership of
properties acquired by the parties to a
[35]

[36]

bigamous marriage and an adulterous


relationship, respectively, we ruled that
proof of actual contribution in the
acquisition
of
the
property
is
essential. The claim of co-ownership of
the petitioners therein who were parties to
the bigamous and adulterous union is
without basis because they failed to
substantiate their allegation that they
contributed money in the purchase of the
disputed properties. Also in Adriano v.
Court of Appeals, we ruled that the fact
that the controverted property was titled in
the name of the parties to an adulterous
relationship is not sufficient proof of coownership absent evidence of actual
contribution in the acquisition of the
property.
[37]

As in other civil cases, the burden of


proof rests upon the party who, as
determined by the pleadings or the nature
of the case, asserts an affirmative
issue. Contentions must be proved by
competent evidence and reliance must be
had on the strength of the partys own
evidence and not upon the weakness of
the opponents defense. This applies
with more vigor where, as in the instant
case, the plaintiff was allowed to present
evidence ex parte. The plaintiff is not
automatically entitled to the relief prayed
for. The law gives the defendant some
measure of protection as the plaintiff must
still prove the allegations in the
complaint. Favorable
relief can be
granted only after the court is convinced
that the facts proven by the plaintiff
warrant such relief. Indeed, the party
alleging a fact has the burden of proving it
and a mere allegation is not evidence.
[38]

[39]

[40]

In the case at bar, the controversy


centers on the house and personal
properties
of
the
parties. Private
respondent alleged in her complaint that
she contributed P70,000.00 for the
completion of their house. However,
nowhere in her testimony did she specify
the extent of her contribution. What
appears in the record are receipts in her
name for the purchase of construction
materials on November 17, 1995 and
December 23, 1995, in the total amount
of P11,413.00.
[41]

On the other hand, both parties claim


that the money used to purchase the
disputed personal properties came partly
from their joint account with First Allied
Development Bank. While there is no
question that both parties contributed in
their joint account deposit, there is,
however, no sufficient proof of the exact
amount of their respective shares
therein. Pursuant to Article 148 of the
Family Code, in the absence of proof of
extent
of
the
parties
respective
contribution, their share shall be
presumed to be equal. Here, the disputed
personal properties were valued at
P111,375.00, the existence and value of
which were not questioned by the
petitioner. Hence, their share therein is
equivalent to one-half, i.e., P55,687.50
each.
The Court of Appeals thus erred in
affirming the decision of the trial court
which granted the reliefs prayed for by
private respondent. On the basis of the
evidence established, the extent of
private respondents co-ownership over
the disputed house is only up to the
amount of P11,413.00, her proven

contribution
in
the
construction
thereof. Anent the personal properties,
her participation therein should be limited
only to the amount of P55,687.50.
As regards the trial courts award of
P50,000.00 as moral damages, the Court
of Appeals correctly deleted the same for
lack of basis.
WHEREFORE, in view of all the
foregoing, the Decision of the Court of
Appeals in CA-G.R. CV No. 64166 is
AFFIRMED with MODIFICATION. Private
respondent Gina S. Rey is declared coowner of petitioner Jacinto Saguid in the
controverted house to the extent of
P11,413.00 and personal properties to the
extent of P55,687.50. Petitioner
is
ordered to reimburse the amount of
P67,100.50 to private respondent, failing
which the house shall be sold at public
auction to satisfy private respondents
claim.

promulgated on November 11, 2005, whereby the


Court of Appeals (CA) affirmed with modification the
decision rendered on August 27, 2001 by the
Regional Trial Court (RTC), Branch 138, in Makati
City. The CA thereby denied her right in the 25/100
pro indiviso share of the husband in a condominium
unit, and in the law books of the husband acquired
during the second marriage.
1

Antecedents
The antecedent facts were summarized by the CA as
follows:

DECISION

ATTY. LUNA, a practicing lawyer, was at first a name


partner in the prestigious law firm Sycip, Salazar,
Luna, Manalo, Hernandez & Feliciano Law Offices at
that time when he was living with his first wife, herein
intervenor-appellant Eugenia Zaballero-Luna
(EUGENIA), whom he initially married ina civil
ceremony conducted by the Justice of the Peace of
Paraaque, Rizal on September 10, 1947 and later
solemnized in a church ceremony at the ProCathedral in San Miguel, Bulacan on September 12,
1948. In ATTY. LUNAs marriage to EUGENIA, they
begot seven (7) children, namely: Regina Maria L.
Nadal, Juan Luis Luna, Araceli Victoria L. Arellano,
Ana Maria L. Tabunda, Gregorio Macario Luna,
Carolina Linda L. Tapia, and Cesar Antonio Luna.
After almost two (2) decades of marriage, ATTY.
LUNA and EUGENIA eventually agreed to live apart
from each other in February 1966 and agreed to
separation of property, to which end, they entered into
a written agreement entitled "AGREEMENT FOR
SEPARATION AND PROPERTY SETTLEMENT"
dated November 12, 1975, whereby they agreed to
live separately and to dissolve and liquidate their
conjugal partnership of property.

Divorce between Filipinos is void and ineffectual


under the nationality rule adopted by Philippine law.
Hence, any settlement of property between the
parties of the first marriage involving Filipinos
submitted as an incident of a divorce obtained in a
foreign country lacks competent judicial approval, and
cannot be enforceable against the assets of the
husband who contracts a subsequent marriage.

On January 12, 1976, ATTY. LUNA obtained a divorce


decree of his marriage with EUGENIA from the Civil
and Commercial Chamber of the First Circumscription
of the Court of First Instance of Sto. Domingo,
Dominican Republic. Also in Sto.Domingo, Dominican
Republic, on the same date, ATTY. LUNA contracted
another marriage, this time with SOLEDAD.
Thereafter, ATTY. LUNA and SOLEDAD returned to
the Philippines and lived together as husband and
wife until 1987.

SO ORDERED.
LAVADIA V HEIRS OF LUNA

BERSAMIN, J.:

The Case
The petitioner, the second wife of the late Atty. Juan
Luces Luna, appeals the adverse decision

Sometime in 1977, ATTY. LUNA organized a new law


firm named: Luna, Puruganan, Sison and Ongkiko
(LUPSICON) where ATTY. LUNA was the managing
partner.

On February 14, 1978, LUPSICON through ATTY.


LUNA purchased from Tandang Sora Development
Corporation the 6th Floor of Kalaw-Ledesma
Condominium Project(condominium unit) at Gamboa
St., Makati City, consisting of 517.52 square meters,
for P1,449,056.00, to be paid on installment basis for
36months starting on April 15, 1978. Said
condominium unit was to be usedas law office of
LUPSICON. After full payment, the Deed of Absolute
Sale over the condominium unit was executed on July
15, 1983, and CCT No. 4779 was issued on August
10, 1983, which was registered bearing the following
names:
"JUAN LUCES LUNA, married to Soledad L. Luna
(46/100); MARIO E. ONGKIKO, married to Sonia P.G.
Ongkiko (25/100); GREGORIO R. PURUGANAN,
married to Paz A. Puruganan (17/100); and
TERESITA CRUZ SISON, married to Antonio J.M.
Sison (12/100) x x x" Subsequently, 8/100 share of
ATTY. LUNA and 17/100 share of Atty. Gregorio R.
Puruganan in the condominium unit was sold to Atty.
Mario E. Ongkiko, for which a new CCT No. 21761
was issued on February 7, 1992 in the following
names:
"JUAN LUCES LUNA, married to Soledad L. Luna
(38/100); MARIO E. ONGKIKO, married to Sonia P.G.
Ongkiko (50/100); TERESITA CRUZ SISON, married
to Antonio J.M. Sison (12/100) x x x"
Sometime in 1992, LUPSICON was dissolved and the
condominium unit was partitioned by the partners but
the same was still registered in common under CCT
No. 21716. The parties stipulated that the interest of
ATTY. LUNA over the condominium unit would be
25/100 share. ATTY. LUNA thereafter established and
headed another law firm with Atty. Renato G. Dela
Cruzand used a portion of the office condominium unit
as their office. The said law firm lasted until the death
of ATTY. JUAN on July 12, 1997.
After the death of ATTY. JUAN, his share in the
condominium unit including the lawbooks, office
furniture and equipment found therein were taken
over by Gregorio Z. Luna, ATTY. LUNAs son of the
first marriage. Gregorio Z. Luna thenleased out the
25/100 portion of the condominium unit belonging to
his father to Atty. Renato G. De la Cruz who
established his own law firm named Renato G. De la
Cruz & Associates.
The 25/100 pro-indiviso share of ATTY. Luna in the
condominium unit as well as the law books, office

furniture and equipment became the subject of the


complaint filed by SOLEDAD against the heirs of
ATTY. JUAN with the RTC of Makati City, Branch 138,
on September 10, 1999, docketed as Civil Case No.
99-1644. The complaint alleged that the subject
properties were acquired during the existence of the
marriage between ATTY. LUNA and SOLEDAD
through their joint efforts that since they had no
children, SOLEDAD became co-owner of the said
properties upon the death of ATTY. LUNA to the
extent of pro-indiviso share consisting of her
share in the said properties plus her share in the
net estate of ATTY. LUNA which was bequeathed to
her in the latters last will and testament; and thatthe
heirs of ATTY. LUNA through Gregorio Z. Luna
excluded SOLEDAD from her share in the subject
properties. The complaint prayed that SOLEDAD be
declared the owner of the portion of the subject
properties;that the same be partitioned; that an
accounting of the rentals on the condominium unit
pertaining to the share of SOLEDAD be conducted;
that a receiver be appointed to preserve ad administer
the subject properties;and that the heirs of ATTY.
LUNA be ordered to pay attorneys feesand costs of
the suit to SOLEDAD.
3

Ruling of the RTC


On August 27, 2001, the RTC rendered its decision
after trial upon the aforementioned facts, disposing
thusly:
4

WHEREFORE, judgment is rendered as follows:


(a) The 24/100 pro-indiviso share in the
condominium unit located at the SIXTH
FLOOR of the KALAW LEDESMA
CONDOMINIUM PROJECT covered by
Condominium Certificate of Title No. 21761
consisting of FIVE HUNDRED SEVENTEEN
(517/100) SQUARE METERS is adjudged to
have been acquired by Juan Lucas Luna
through his sole industry;
(b) Plaintiff has no right as owner or under any
other concept over the condominium unit,
hence the entry in Condominium Certificate of
Title No. 21761 of the Registry of Deeds of
Makati with respect to the civil status of Juan
Luces Luna should be changed from "JUAN
LUCES LUNA married to Soledad L. Luna" to
"JUAN LUCES LUNA married to Eugenia
Zaballero Luna";

(c) Plaintiff is declared to be the owner of the


books Corpus Juris, Fletcher on Corporation,
American Jurisprudence and Federal
Supreme Court Reports found in the
condominium unit and defendants are ordered
to deliver them to the plaintiff as soon as
appropriate arrangements have been madefor
transport and storage.

VII. THE LOWER COURT ERRED IN


RULING THAT NEITHER ARTICLE 148 OF
THE FAMILYCODE NOR ARTICLE 144 OF
THE CIVIL CODE OF THE PHILIPPINES ARE
APPLICABLE;

No pronouncement as to costs.
SO ORDERED.

VI. THE LOWER COURT ERRED IN GIVING


UNDUE SIGNIFICANCE TO THE FACTTHAT
THE NAME OF PLAINTIFF-APPELLANT DID
NOT APPEAR IN THE DEED OF ABSOLUTE
SALE EXECUTED BY TANDANG SORA
DEVELOPMENT CORPORATION OVER THE
CONDOMINIUM UNIT;

Decision of the CA
Both parties appealed to the CA.

On her part, the petitioner assigned the following


errors to the RTC, namely:
I. THE LOWER COURT ERRED IN RULING
THAT THE CONDOMINIUM UNIT WAS
ACQUIRED THRU THE SOLE INDUSTRY OF
ATTY. JUAN LUCES LUNA;

VIII. THE LOWER COURT ERRED IN NOT


RULING THAT THE CAUSE OF ACTION OF
THE INTERVENOR-APPELLANT HAS BEEN
BARRED BY PESCRIPTION AND LACHES;
and
IX. THE LOWER COURT ERRED IN NOT
EXPUNGING/DISMISSING THE
INTERVENTION FOR FAILURE OF
INTERVENOR-APPELLANT TO PAY FILING
FEE.
7

II. THE LOWER COURT ERRED IN RULING


THAT PLAINTIFFAPPELLANT DID NOT
CONTRIBUTE MONEY FOR THE
ACQUISITION OF THE CONDOMINIUM
UNIT;
III. THE LOWER COURT ERRED IN GIVING
CREDENCE TO PORTIONS OF THE
TESTIMONY OF GREGORIO LUNA, WHO
HAS NO ACTUAL KNOWLEDGE OF THE
ACQUISITION OF THE UNIT, BUT IGNORED
OTHER PORTIONS OF HIS TESTIMONY
FAVORABLE TO THE PLAINTIFFAPPELLANT;
IV. THE LOWER COURT ERRED IN NOT
GIVING SIGNIFICANCE TO THE FACT THAT
THE CONJUGAL PARTNERSHIP BETWEEN
LUNA AND INTERVENOR-APPELLANT WAS
ALREADY DISSOLVED AND LIQUIDATED
PRIOR TO THE UNION OF PLAINTIFFAPPELLANT AND LUNA;

In contrast, the respondents attributedthe following


errors to the trial court, to wit:
I. THE LOWER COURT ERRED IN HOLDING
THAT CERTAIN FOREIGN LAW BOOKS IN
THE LAW OFFICE OF ATTY. LUNA WERE
BOUGHT WITH THE USE OF PLAINTIFFS
MONEY;
II. THE LOWER COURT ERRED IN
HOLDING THAT PLAINTIFF PROVED BY
PREPONDERANCE OF EVIDENCE (HER
CLAIM OVER) THE SPECIFIED FOREIGN
LAW BOOKS FOUND IN ATTY. LUNAS LAW
OFFICE; and
III. THE LOWER COURT ERRED IN NOT
HOLDING THAT, ASSUMING PLAINTIFF
PAID FOR THE SAID FOREIGN LAW
BOOKS, THE RIGHT TO RECOVER THEM
HAD PRESCRIBED AND BARRED BY
LACHES AND ESTOPPEL.
8

V. THE LOWER COURT ERRED IN GIVING


UNDUE SIGNIFICANCE TO THE ABSENCE
OF THE DISPOSITION OF THE
CONDOMINIUM UNIT IN THE
HOLOGRAPHIC WILL OF THE PLAINTIFFAPPELLANT;

On November 11, 2005, the CA promulgated its


assailed modified decision, holding and ruling:
9

EUGENIA, the first wife, was the legitimate wife of


ATTY. LUNA until the latters death on July 12, 1997.

The absolute divorce decree obtained by ATTY. LUNA


inthe Dominican Republic did not terminate his prior
marriage with EUGENIA because foreign divorce
between Filipino citizens is not recognized in our
jurisdiction. x x x
10

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

11

On March 13, 2006, the CA denied the petitioners


motion for reconsideration.
12

13

Issues

In this appeal, the petitioner avers in her petition for


review on certiorarithat:
A. The Honorable Court of Appeals erred in
ruling that the Agreement for Separation and
Property Settlement executed by Luna and
Respondent Eugenia was unenforceable;
hence, their conjugal partnership was not
dissolved and liquidated;
B. The Honorable Court of Appeals erred in
not recognizing the Dominican Republic
courts approval of the Agreement;
C. The Honorable Court of Appeals erred in
ruling that Petitioner failed to adduce sufficient
proof of actual contribution to the acquisition
of purchase of the subjectcondominium unit;
and
D. The Honorable Court of Appeals erred in
ruling that Petitioner was not entitled to the
subject law books.
14

The decisive question to be resolved is who among


the contending parties should be entitled to the
25/100 pro indivisoshare in the condominium unit; and
to the law books (i.e., Corpus Juris, Fletcher on
Corporation, American Jurisprudence and Federal
Supreme Court Reports).
The resolution of the decisive question requires the
Court to ascertain the law that should determine,
firstly, whether the divorce between Atty. Luna and
Eugenia Zaballero-Luna (Eugenia) had validly
dissolved the first marriage; and, secondly, whether
the second marriage entered into by the late Atty.
Luna and the petitioner entitled the latter to any rights
in property. Ruling of the Court
We affirm the modified decision of the CA.
1. Atty. Lunas first marriage with Eugenia
subsisted up to the time of his death
The first marriage between Atty. Luna and Eugenia,
both Filipinos, was solemnized in the Philippines on
September 10, 1947. The law in force at the time of
the solemnization was the Spanish Civil Code, which
adopted the nationality rule. The Civil Codecontinued
to follow the nationality rule, to the effect that
Philippine laws relating to family rights and duties, or
to the status, condition and legal capacity of persons
were binding upon citizens of the Philippines,

although living abroad. Pursuant to the nationality


rule, Philippine laws governed thiscase by virtue of
bothAtty. Luna and Eugenio having remained Filipinos
until the death of Atty. Luna on July 12, 1997
terminated their marriage.

partnership was enforceable against Eugenia. Hence,


the CA committed reversible error in decreeing
otherwise.

From the time of the celebration ofthe first marriage


on September 10, 1947 until the present, absolute
divorce between Filipino spouses has not been
recognized in the Philippines. The non-recognition of
absolute divorce between Filipinos has remained
even under the Family Code, even if either or both of
the spouses are residing abroad. Indeed, the only
two types of defective marital unions under our laws
have beenthe void and the voidable marriages. As
such, the remedies against such defective marriages
have been limited to the declaration of nullity ofthe
marriage and the annulment of the marriage.

Considering that Atty. Luna and Eugenia had not


entered into any marriage settlement prior to their
marriage on September 10, 1947, the system of
relative community or conjugal partnership of gains
governed their property relations. This is because the
Spanish Civil Code, the law then in force at the time
of their marriage, did not specify the property regime
of the spouses in the event that they had not entered
into any marriage settlement before or at the time of
the marriage. Article 119 of the Civil Codeclearly so
provides, to wit:

15

16

17

It is true that on January 12, 1976, the Court of First


Instance (CFI) of Sto. Domingo in the Dominican
Republic issued the Divorce Decree dissolving the
first marriage of Atty. Luna and
Eugenia. Conformably with the nationality rule,
however, the divorce, even if voluntarily obtained
abroad, did not dissolve the marriage between Atty.
Luna and Eugenia, which subsisted up to the time of
his death on July 12, 1997. This finding conforms to
the Constitution, which characterizes marriage as an
inviolable social institution, and regards it as a
special contract of permanent union between a man
and a woman for the establishment of a conjugal and
family life. The non-recognition of absolute divorce in
the Philippines is a manifestation of the respect for
the sanctity of the marital union especially among
Filipino citizens. It affirms that the extinguishment of a
valid marriage must be grounded only upon the death
of either spouse, or upon a ground expressly provided
bylaw. For as long as this public policy on marriage
between Filipinos exists, no divorce decree dissolving
the marriage between them can ever be given legal or
judicial recognition and enforcement in this
jurisdiction.
18

19

20

2. The Agreement for Separation and Property


Settlement
was void for lack of court approval
The petitioner insists that the Agreement for
Separation and Property Settlement (Agreement) that
the late Atty. Luna and Eugenia had entered into and
executed in connection with the divorce proceedings
before the CFI of Sto. Domingo in the Dominican
Republic to dissolve and liquidate their conjugal

The insistence of the petitioner was unwarranted.

Article 119. The future spouses may in the marriage


settlements agree upon absolute or relative
community of property, or upon complete separation
of property, or upon any other regime. In the absence
of marriage settlements, or when the same are void,
the system of relative community or conjugal
partnership of gains as established in this Code, shall
govern the property relations between husband and
wife.
Article 142 of the Civil Codehas defined a conjugal
partnership of gains thusly:
Article 142. By means of the conjugal partnership of
gains the husband and wife place in a common fund
the fruits of their separate property and the income
from their work or industry, and divide equally, upon
the dissolution of the marriage or of the partnership,
the net gains or benefits obtained indiscriminately by
either spouse during the marriage.
The conjugal partnership of gains subsists until
terminated for any of various causes of termination
enumerated in Article 175 of the Civil Code, viz:
Article 175. The conjugal partnership of gains
terminates:
(1) Upon the death of either spouse;
(2) When there is a decree of legal separation;
(3) When the marriage is annulled;
(4) In case of judicial separation of property
under Article 191.

The mere execution of the Agreement by Atty. Luna


and Eugenia did not per sedissolve and liquidate their
conjugal partnership of gains. The approval of the
Agreement by a competent court was still required
under Article 190 and Article 191 of the Civil Code, as
follows:
Article 190. In the absence of an express declaration
in the marriage settlements, the separation of
property between spouses during the marriage shall
not take place save in virtue of a judicial order.
(1432a)
Article 191. The husband or the wife may ask for the
separation of property, and it shall be decreed when
the spouse of the petitioner has been sentenced to a
penalty which carries with it civil interdiction, or has
been declared absent, or when legal separation has
been granted.
xxxx
The husband and the wife may agree upon the
dissolution of the conjugal partnership during the
marriage, subject to judicial approval. All the creditors
of the husband and of the wife, as well as of the
conjugal partnership shall be notified of any petition
for judicialapproval or the voluntary dissolution of the
conjugal partnership, so that any such creditors may
appear atthe hearing to safeguard his interests. Upon
approval of the petition for dissolution of the conjugal
partnership, the court shall take such measures as
may protect the creditors and other third persons.
After dissolution of the conjugal partnership, the
provisions of articles 214 and 215 shall apply. The
provisions of this Code concerning the effect of
partition stated in articles 498 to 501 shall be
applicable. (1433a)
But was not the approval of the Agreement by the CFI
of Sto. Domingo in the Dominican Republic sufficient
in dissolving and liquidating the conjugal partnership
of gains between the late Atty. Luna and Eugenia?
The query is answered in the negative. There is no
question that the approval took place only as an
incident ofthe action for divorce instituted by Atty.
Luna and Eugenia, for, indeed, the justifications for
their execution of the Agreement were identical to the
grounds raised in the action for divorce. With the
divorce not being itself valid and enforceable under
Philippine law for being contrary to Philippine public
policy and public law, the approval of the Agreement
21

was not also legally valid and enforceable under


Philippine law. Consequently, the conjugal partnership
of gains of Atty. Luna and Eugenia subsisted in the
lifetime of their marriage.
3. Atty. Lunas marriage with Soledad, being
bigamous,
was void; properties acquired during their marriage
were governed by the rules on co-ownership
What law governed the property relations of the
second marriage between Atty. Luna and Soledad?
The CA expressly declared that Atty. Lunas
subsequent marriage to Soledad on January 12, 1976
was void for being bigamous, on the ground that the
marriage between Atty. Luna and Eugenia had not
been dissolved by the Divorce Decree rendered by
the CFI of Sto. Domingo in the Dominican Republic
but had subsisted until the death of Atty. Luna on July
12, 1997.
22

The Court concurs with the CA.


In the Philippines, marriages that are bigamous,
polygamous, or incestuous are void. Article 71 of the
Civil Codeclearly states:
Article 71. All marriages performed outside the
Philippines in accordance with the laws in force in the
country where they were performed, and valid there
as such, shall also be valid in this country, except
bigamous, polygamous, or incestuous marriages as
determined by Philippine law.
Bigamy is an illegal marriage committed by
contracting a second or subsequent marriage before
the first marriage has been legally dissolved, or
before the absent spouse has been declared
presumptively dead by means of a judgment rendered
in the proper proceedings. A bigamous marriage is
considered void ab initio.
23

24

Due to the second marriage between Atty. Luna and


the petitioner being void ab initioby virtue of its being
bigamous, the properties acquired during the
bigamous marriage were governed by the rules on coownership, conformably with Article 144 of the Civil
Code, viz:
Article 144. When a man and a woman live together
as husband and wife, but they are not married, ortheir
marriage is void from the beginning, the property
acquired by eitheror both of them through their work

or industry or their wages and salaries shall be


governed by the rules on co-ownership.(n)

Filipino totaling P146,825.30; and that such


aggregate contributions of P306,572.00 corresponded
to almost the entire share of Atty. Luna in the
purchase of the condominium unit amounting
to P362,264.00 of the units purchase price
of P1,449,056.00. The petitioner further asserts that
the lawbooks were paid for solely out of her personal
funds, proof of which Atty. Luna had even sent her a
"thank you" note; that she had the financial capacity
to make the contributions and purchases; and that
Atty. Luna could not acquire the properties on his own
due to the meagerness of the income derived from his
law practice.
27

In such a situation, whoever alleges co-ownership


carried the burden of proof to confirm such fact. To
establish co-ownership, therefore, it became
imperative for the petitioner to offer proof of her actual
contributions in the acquisition of property. Her mere
allegation of co-ownership, without sufficient and
competent evidence, would warrant no relief in her
favor. As the Court explained in Saguid v. Court of
Appeals:
1wphi1

25

In the cases of Agapay v. Palang, and Tumlos v.


Fernandez, which involved the issue of co-ownership
ofproperties acquired by the parties to a bigamous
marriage and an adulterous relationship, respectively,
we ruled that proof of actual contribution in the
acquisition of the property is essential. The claim of
co-ownership of the petitioners therein who were
parties to the bigamous and adulterousunion is
without basis because they failed to substantiate their
allegation that they contributed money in the
purchase of the disputed properties. Also in Adriano v.
Court of Appeals, we ruled that the fact that the
controverted property was titled in the name of the
parties to an adulterous relationship is not sufficient
proof of coownership absent evidence of actual
contribution in the acquisition of the property.
As in other civil cases, the burden of proof rests upon
the party who, as determined by the pleadings or the
nature of the case, asserts an affirmative issue.
Contentions must be proved by competent evidence
and reliance must be had on the strength of the
partys own evidence and not upon the weakness of
the opponents defense. This applies with more vigor
where, as in the instant case, the plaintiff was allowed
to present evidence ex parte. The plaintiff is not
automatically entitled to the relief prayed for. The law
gives the defendantsome measure of protection as
the plaintiff must still prove the allegations in the
complaint. Favorable relief can be granted only after
the court isconvinced that the facts proven by the
plaintiff warrant such relief. Indeed, the party alleging
a fact has the burden of proving it and a
mereallegation is not evidence.
1wphi1

26

The petitioner asserts herein that she sufficiently


proved her actual contributions in the purchase of the
condominium unit in the aggregate amount of at
least P306,572.00, consisting in direct contributions
ofP159,072.00, and in repaying the loans Atty. Luna
had obtained from Premex Financing and Banco

28

29

Did the petitioner discharge her burden of proof on


the co-ownership?
In resolving the question, the CA entirely debunked
the petitioners assertions on her actual contributions
through the following findings and conclusions,
namely:
SOLEDAD was not able to prove by preponderance
of evidence that her own independent funds were
used to buy the law office condominium and the law
books subject matter in contentionin this case proof
that was required for Article 144 of the New Civil Code
and Article 148 of the Family Code to apply as to
cases where properties were acquired by a man and
a woman living together as husband and wife but not
married, or under a marriage which was void ab initio.
Under Article 144 of the New Civil Code, the rules on
co-ownership would govern. But this was not readily
applicable to many situations and thus it created a
void at first because it applied only if the parties were
not in any way incapacitated or were without
impediment to marry each other (for it would be
absurd to create a co-ownership where there still
exists a prior conjugal partnership or absolute
community between the man and his lawful wife). This
void was filled upon adoption of the Family Code.
Article 148 provided that: only the property acquired
by both of the parties through their actual joint
contribution of money, property or industry shall be
owned in common and in proportion to their
respective contributions. Such contributions and
corresponding shares were prima faciepresumed to
be equal. However, for this presumption to arise,
proof of actual contribution was required. The same
rule and presumption was to apply to joint deposits of
money and evidence of credit. If one of the parties
was validly married to another, his or her share in the
co-ownership accrued to the absolute community or
conjugal partnership existing in such valid marriage. If
the party who acted in bad faith was not validly

married to another, his or her share shall be forfeited


in the manner provided in the last paragraph of the
Article 147. The rules on forfeiture applied even if
both parties were in bad faith. Co-ownership was the
exception while conjugal partnership of gains was the
strict rule whereby marriage was an inviolable social
institution and divorce decrees are not recognized in
the Philippines, as was held by the Supreme Court in
the case of Tenchavez vs. Escao, G.R. No. L-19671,
November 29, 1965, 15 SCRA 355, thus:

"The Deed of Absolute Sale, Exhibit "9", covering the


condominium unit was in the name of Atty. Luna,
together with his partners in the law firm. The name of
the plaintiff does not appear as vendee or as the
spouse of Atty. Luna. The same was acquired for the
use of the Law firm of Atty. Luna. The loans from
Allied Banking Corporation and Far East Bank and
Trust Company were loans of Atty. Luna and his
partners and plaintiff does not have evidence to show
that she paid for them fully or partially. x x x"

xxxx

The fact that CCT No. 4779 and subsequently, CCT


No. 21761 were in the name of "JUAN LUCES LUNA,
married to Soledad L. Luna" was no proof that
SOLEDAD was a co-owner of the condominium unit.
Acquisition of title and registration thereof are two
different acts. It is well settled that registration does
not confer title but merely confirms one already
existing. The phrase "married to" preceding "Soledad
L. Luna" is merely descriptive of the civil status of
ATTY. LUNA.

As to the 25/100pro-indivisoshare of ATTY. LUNA in


the condominium unit, SOLEDAD failed to prove that
she made an actual contribution to purchase the said
property. She failed to establish that the four (4)
checks that she presented were indeed used for the
acquisition of the share of ATTY. LUNA in the
condominium unit. This was aptly explained in the
Decision of the trial court, viz.:
"x x x The first check, Exhibit "M" for P55,000.00
payable to Atty. Teresita Cruz Sison was issued on
January 27, 1977, which was thirteen (13) months
before the Memorandum of Agreement, Exhibit "7"
was signed. Another check issued on April 29, 1978 in
the amount of P97,588.89, Exhibit "P" was payable to
Banco Filipino. According to the plaintiff, thiswas in
payment of the loan of Atty. Luna. The third check
which was for P49,236.00 payable to PREMEX was
dated May 19, 1979, also for payment of the loan of
Atty. Luna. The fourth check, Exhibit "M",
forP4,072.00 was dated December 17, 1980. None of
the foregoing prove that the amounts delivered by
plaintiff to the payees were for the acquisition of the
subject condominium unit. The connection was simply
not established. x x x"
SOLEDADs claim that she made a cash contribution
of P100,000.00 is unsubstantiated. Clearly, there is no
basis for SOLEDADs claim of co-ownership over the
25/100 portion of the condominium unit and the trial
court correctly found that the same was acquired
through the sole industry of ATTY. LUNA, thus:

SOLEDAD, the second wife, was not even a lawyer.


So it is but logical that SOLEDAD had no participation
in the law firm or in the purchase of books for the law
firm. SOLEDAD failed to prove that she had anything
to contribute and that she actually purchased or paid
for the law office amortization and for the law books. It
is more logical to presume that it was ATTY. LUNA
who bought the law office space and the law books
from his earnings from his practice of law rather than
embarrassingly beg or ask from SOLEDAD money for
use of the law firm that he headed.
30

The Court upholds the foregoing findings and


conclusions by the CA both because they were
substantiated by the records and because we have
not been shown any reason to revisit and undo them.
Indeed, the petitioner, as the party claiming the coownership, did not discharge her burden of proof. Her
mere allegations on her contributions, not being
evidence, did not serve the purpose. In contrast,
given the subsistence of the first marriage between
Atty. Luna and Eugenia, the presumption that Atty.
Luna acquired the properties out of his own personal
funds and effort remained. It should then be justly
concluded that the properties in litislegally pertained
to their conjugal partnership of gains as of the time of
his death. Consequently, the sole ownership of the
31

25/100 pro indivisoshare of Atty. Luna in the


condominium unit, and of the lawbooks pertained to
the respondents as the lawful heirs of Atty. Luna.

WHEREFORE, the Court AFFIRMS the decision


promulgated on November 11, 2005; and ORDERS
the petitioner to pay the costs of suit.

SO ORDERED.