G.R. No.
166496 November 9, 2006 In determining which property is the principal and which is the
JOSEFA BAUTISTA FERRER, Petitioner,
vs.
SPS. MANUEL M. FERRER & VIRGINIA FERRER and SPS. ISMAEL M.
FERRER and FLORA FERRER,Respondents.
DECISION
CHICO-NAZARIO, J.:
Before this Court is an Appeal by Certiorari which assails the
Decision1 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 Complaint3 filed by petitioner Josefa Bautista Ferrer
against respondents Sps. Manuel M. Ferrer and Virginia Ferrer, and
Sps. Ismael M. Ferrer and Flora Ferrer in the aforesaid Civil Case No.
MC02-1780.
In her Complaint for payment of conjugal improvements, sum of
money, and accounting with prayer for injunction and damages,
petitioner alleged that she is the widow of Alfredo Ferrer (Alfredo), a
half-brother of respondents Manuel M. Ferrer (Manuel) and Ismael
M. Ferrer (Ismael). Before her marriage to Alfredo, the latter acquired
a piece of lot, covered by Transfer Certificate of Title (TCT) No.
67927.4 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 couple’s 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 petitioner’s 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
Alfredo’s 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:
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 Josefa’s 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 Alfredo’s lot. She alleged that the
cost of the improvements amounted to ₱500,000.00; hence, one-half
thereof should be reimbursed and paid by respondents as they are
now the registered owners of Alfredo’s 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 Alfredo’s 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 Alfredo’s lot has been made in Civil
Case No. 61327, and the payment of petitioner’s share in the conjugal
partnership constitutes a separate cause of action. A subsequent
Order11 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 petitioner’s 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 12912 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
Resolution14 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 PETITIONER’S 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 petitioner’s Complaint for failure to state a cause
of action.
Section 1(g) Rule 1616 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 petitioner’s 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 Alfredo’s lots were
deemed as Alfredo’s exclusive and capital property, the court also
held that petitioner, as Alfredo’s 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 12022 of the Family Code to
be reimbursed for the cost of the improvements, the obligation to
reimburse rests on the spouse upon whom ownership of the entire
property is vested. There is no obligation on the part of the purchaser
of the property, in case the property is sold by the owner-spouse.
Indeed, Article 120 provides the solution in determining the
ownership of the improvements that are made on the separate
property of the spouses at the expense of the partnership or through
the acts or efforts of either or both spouses. Thus, when the cost of
the improvement and any resulting increase in value are more than
the value of the property at the time of the improvement, the entire
property of one of the spouses shall belong to the conjugal
partnership, subject to reimbursement of the value of the property of
the owner-spouse at the time of the improvement; otherwise, said
property shall be retained in ownership by the owner-spouse,
likewise subject to reimbursement of the cost of the improvement.
The subject property was precisely declared as the exclusive property
of Alfredo on the basis of Article 120 of the Family Code.
What is incontrovertible is that the respondents, despite the
allegations contained in the Complaint that they are the buyers of the
subject premises, are not petitioner’s 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 petitioner’s right
to be reimbursed.

On this matter, we do not find an act or omission on the part of

respondents in violation of petitioner’s 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 petitioner’s 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 petitioner’s rights.
As has been shown in the foregoing, no obligation by the respondents
under the law exists. Petitioner’s Complaint failed to state a cause of
action against the respondents, and for this reason, the Court of
Appeals was not in error in dismissing the same.

WHEREFORE, the Petition is DENIED. The Decision dated 16 August

2004 and the Resolution dated 17 December 2004 of the Court of
Appeals in CA G.R. SP. No. 78525 are AFFIRMED. Costs de oficio.

SO ORDERED.
G.R. No. 149615 August 29, 2006
IN RE: PETITION FOR SEPARATION OF PROPERTY ELENA
BUENAVENTURA MULLER, Petitioner,
vs.
HELMUT MULLER, Respondent.
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari 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. Q-94-21862, 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 respondent’s 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 respondent’s 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 court’s 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 petitioner’s ownership over the property in
trust for the respondent. As regards the house, the Court of Appeals
ruled that there is nothing in the Constitution which prohibits
respondent from acquiring the same. The dispositive portion of the
assailed decision reads:
WHEREFORE, in view of the foregoing, the Decision of the lower court
dated August 12, 1996 is hereby MODIFIED. Respondent Elena
Buenaventura Muller is hereby ordered to REIMBURSE the petitioner
the amount of P528,000.00 for the acquisition of the land and the
amount of P2,300,000.00 for the construction of the house situated
in Atnipolo, Rizal, deducting therefrom the amount respondent spent
for the preservation, maintenance and development of the aforesaid
real property including the depreciation cost of the house or in the
alternative to SELL the house and lot in the event respondent does
not have the means to reimburse the petitioner out of her own money
and from the proceeds thereof, reimburse the petitioner of the cost
of the land and the house deducting the expenses for its maintenance
and preservation spent by the respondent. Should there be profit, the
same shall be divided in proportion to the equity each has over the
property. The case is REMANDED to the lower court for reception of
evidence as to the amount claimed by the respondents for the
preservation and maintenance of the property.
SO ORDERED. 8
Hence, the instant petition for review raising the following issues:
I
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING
THAT THE RESPONDENT HEREIN IS ENTITLED TO REIMBURSEMENT OF
THE AMOUNT USED TO PURCHASE THE LAND AS WELL AS THE COSTS
FOR THE CONSTRUCTION OF THE HOUSE, FOR IN SO RULING, IT
INDIRECTLY ALLOWED AN ACT DONE WHICH OTHERWISE COULD NOT
BE DIRECTLY x x x DONE, WITHOUT DOING VIOLENCE TO THE
CONSTITUTIONAL PROSCRIPTION THAT AN ALIEN IS PROHIBITED
FROM ACQUIRING OWNERSHIP OF REAL PROPERTIES LOCATED IN
THE PHILIPPINES.
II
THE COURT OF APPEALS GRAVELY ERRED IN SUSTAINING
RESPONDENT’S 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
respondent’s purpose for filing an action for separation of property is
to obtain exclusive possession, control and disposition of the Antipolo
property.
Respondent claims that he is not praying for transfer of ownership of
the Antipolo property but merely reimbursement; that the funds paid
by him for the said property were in consideration of his marriage to
petitioner; that the funds were given to petitioner in trust; and that
equity demands that respondent should be reimbursed of his
personal funds.
The issue for resolution is whether respondent is entitled to
reimbursement of the funds used for the acquisition of the Antipolo
property.
The petition has merit.
Section 7, Article XII of the 1987 Constitution states:
Save in cases of hereditary succession, no private lands shall be
transferred or conveyed except to individuals, corporations, or
associations qualified to acquire or hold lands of the public domain.
Aliens, whether individuals or corporations, are disqualified from
acquiring lands of the public domain. Hence, they are also disqualified
from acquiring private lands. 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 appellant’s words, strictly agricultural."
(Solicitor General’s 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. 12His 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 petitioner’s
marriage to respondent. Save for the exception provided in cases of
hereditary succession, respondent’s 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 respondent’s 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.
G.R. No. 157537 September 7, 2011
THE HEIRS OF PROTACIO GO, SR. and MARTA BAROLA, namely:
LEONOR, SIMPLICIO, PROTACIO, JR., ANTONIO, BEVERLY ANN
LORRAINNE, TITA, CONSOLACION, LEONORA and ASUNCION, all
surnamed GO, represented by LEONORA B. GO, Petitioners,
vs.
ESTER L. SERVACIO and RITO B. GO, Respondents.
DECISION
BERSAMIN, J.:
The disposition by sale of a portion of the conjugal property by the
surviving spouse without the prior liquidation mandated by Article
130 of the Family Code is not necessarily void if said portion has not
yet been allocated by judicial or extrajudicial partition to another heir
of the deceased spouse. At any rate, the requirement of prior
liquidation does not prejudice vested rights.
Antecedents
On February 22, 1976, Jesus B. Gaviola sold two parcels of land with a
total area of 17,140 square meters situated in Southern Leyte to
Protacio B. Go, Jr. (Protacio, Jr.). Twenty three years later, or on
March 29, 1999, Protacio, Jr. executed an Affidavit of Renunciation
and Waiver,1 whereby he affirmed under oath that it was his father,
Protacio Go, Sr. (Protacio, Sr.), not he, who had purchased the two
parcels of land (the property).
On November 25, 1987, Marta Barola Go died. She was the wife of
Protacio, Sr. and mother of the petitioners.2 On December 28, 1999,
Protacio, Sr. and his son Rito B. Go (joined by Rito’s wife Dina B. Go)
sold a portion of the property with an area of 5,560 square meters to
Ester L. Servacio (Servacio) for ₱5,686,768.00.3 On March 2, 2001, the
petitioners demanded the return of the property,4 but Servacio
refused to heed their demand. After barangay proceedings failed to
resolve the dispute,5 they sued Servacio and Rito in the Regional Trial
Court in Maasin City, Southern Leyte (RTC) for the annulment of the
sale of the property.
The petitioners averred that following Protacio, Jr.’s renunciation, the
property became conjugal property; and that the sale of the property
to Servacio without the prior liquidation of the community property
between Protacio, Sr. and Marta was null and void.6
Servacio and Rito countered that Protacio, Sr. had exclusively owned
the property because he had purchased it with his own money.7
On October 3, 2002,8 the RTC declared that the property was the
conjugal property of Protacio, Sr. and Marta, not the exclusive
property of Protacio, Sr., because there were three vendors in the sale
to Servacio (namely: Protacio, Sr., Rito, and Dina); that the
participation of Rito and Dina as vendors had been by virtue of their
being heirs of the late Marta; that under Article 160 of the Civil Code,
the law in effect when the property was acquired, all property
acquired by either spouse during the marriage was conjugal unless
there was proof that the property thus acquired pertained exclusively
to the husband or to the wife; and that Protacio, Jr.’s renunciation
was grossly insufficient to rebut the legal presumption.9
Nonetheless, the RTC affirmed the validity of the sale of the property,
holding that: "xxx As long as the portion sold, alienated or
encumbered will not be allotted to the other heirs in the final
partition of the property, or to state it plainly, as long as the portion
sold does not encroach upon the legitimate (sic) of other heirs, it is
valid."10 Quoting Tolentino’s commentary on the matter as
authority,11 the RTC opined:
In his comment on Article 175 of the New Civil Code regarding the
dissolution of the conjugal partnership, Senator Arturo Tolentino,
says" [sic]
"Alienation by the survivor. — After the death of one of the spouses,
in case it is necessary to sell any portion of the community property
in order to pay outstanding obligation of the partnership, such sale
must be made in the manner and with the formalities established by
the Rules of Court for the sale of the property of the deceased
persons. Any sale, transfer, alienation or disposition of said property
affected without said formalities shall be null and void, except as
regards the portion that belongs to the vendor as determined in the
liquidation and partition. Pending the liquidation, the disposition
must be considered as limited only to the contingent share or interest
of the vendor in the particular property involved, but not to the
corpus of the property.
This rule applies not only to sale but also to mortgages. The
alienation, mortgage or disposal of the conjugal property without the
required formality, is not however, null ab initio, for the law
recognizes their validity so long as they do not exceed the portion
which, after liquidation and partition, should pertain to the surviving
spouse who made the contract." [underlining supplied]
It seems clear from these comments of Senator Arturo Tolentino on
the provisions of the New Civil Code and the Family Code on the
alienation by the surviving spouse of the community property that
jurisprudence remains the same - that the alienation made by the
surviving spouse of a portion of the community property is not wholly
void ab initio despite Article 103 of the Family Code, and shall be valid
to the extent of what will be allotted, in the final partition, to the
vendor. And rightly so, because why invalidate the sale by the
surviving spouse of a portion of the community property that will
eventually be his/her share in the final partition? Practically there is
no reason for that view and it would be absurd.
Now here, in the instant case, the 5,560 square meter portion of the
17,140 square-meter conjugal lot is certainly mush (sic) less than what
vendors Protacio Go and his son Rito B. Go will eventually get as their
share in the final partition of the property. So the sale is still valid.
WHEREFORE, premises considered, complaint is hereby DISMISSED
without pronouncement as to cost and damages.
SO ORDERED.12
The RTC’s denial of their motion for reconsideration13 prompted the
petitioners to appeal directly to the Court on a pure question of law.
Issue
The petitioners claim that Article 130 of the Family Code is the
applicable law; and that the sale by Protacio, Sr., et al. to Servacio was
void for being made without prior liquidation.
In contrast, although they have filed separate comments, Servacio
and Rito both argue that Article 130 of the Family Code was
inapplicable; that the want of the liquidation prior to the sale did not
render the sale invalid, because the sale was valid to the extent of the
portion that was finally allotted to the vendors as his share; and that
the sale did not also prejudice any rights of the petitioners as heirs,
considering that what the sale disposed of was within the aliquot
portion of the property that the vendors were entitled to as heirs.14
Ruling
The appeal lacks merit.
Article 130 of the Family Code reads:
Article 130. Upon the termination of the marriage by death, the
conjugal partnership property shall be liquidated in the same
proceeding for the settlement of the estate of the deceased.
If no judicial settlement proceeding is instituted, the surviving spouse
shall liquidate the conjugal partnership property either judicially or
extra-judicially within one year from the death of the deceased
spouse. If upon the lapse of the six month period no liquidation is
made, any disposition or encumbrance involving the conjugal
partnership property of the terminated marriage shall be void.
Should the surviving spouse contract a subsequent marriage without
compliance with the foregoing requirements, a mandatory regime of
complete separation of property shall govern the property relations
of the subsequent marriage.
Article 130 is to be read in consonance with Article 105 of the Family
Code, viz:
Article 105. In case the future spouses agree in the marriage
settlements that the regime of conjugal partnership of gains shall
govern their property relations during marriage, the provisions in this
Chapter shall be of supplementary application.
The provisions of this Chapter shall also apply to conjugal partnerships
of gains already established between spouses before the effectivity of
this Code, without prejudice to vested rights already acquired in
accordance with the Civil Code or other laws, as provided in Article
256. (n) [emphasis supplied]
It is clear that conjugal partnership of gains established before and
after the effectivity of the Family Code are governed by the rules
found in Chapter 4 (Conjugal Partnership of Gains) of Title IV (Property
Relations Between Husband And Wife) of the Family Code. Hence, any
disposition of the conjugal property after the dissolution of the
conjugal partnership must be made only after the liquidation;
otherwise, the disposition is void.
Before applying such rules, however, the conjugal partnership of
gains must be subsisting at the time of the effectivity of the Family
Code. There being no dispute that Protacio, Sr. and Marta were
married prior to the effectivity of the Family Code on August 3, 1988,
their property relation was properly characterized as one of conjugal
partnership governed by the Civil Code. Upon Marta’s death in 1987,
the conjugal partnership was dissolved, pursuant to Article 175 (1) of
the Civil Code,15 and an implied ordinary co-ownership ensued among
Protacio, Sr. and the other heirs of Marta with respect to her share in
the assets of the conjugal partnership pending a liquidation following
its liquidation.16 The ensuing implied ordinary co-ownership was
governed by Article 493 of the Civil Code,17 to wit:
Article 493. Each co-owner shall have the full ownership of his part
and of the fruits and benefits pertaining thereto, and he may
therefore alienate, assign or mortgage it, and even substitute another
person in its enjoyment, except when personal rights are involved.
But the effect of the alienation or the mortgage, with respect to the
co-owners, shall be limited to the portion which may be allotted to
him in the division upon the termination of the co-ownership. (399)
Protacio, Sr., although becoming a co-owner with his children in
respect of Marta’s share in the conjugal partnership, could not yet
assert or claim title to any specific portion of Marta’s share without
an actual partition of the property being first done either by
agreement or by judicial decree. Until then, all that he had was an
ideal or abstract quota in Marta’s share.18 Nonetheless, a co-owner
could sell his undivided share; hence, Protacio, Sr. had the right to
freely sell and dispose of his undivided interest, but not the interest
of his co-owners.19 Consequently, the sale by Protacio, Sr. and Rito as
co-owners without the consent of the other co-owners was not
necessarily void, for the rights of the selling co-owners were thereby
effectively transferred, making the buyer (Servacio) a co-owner of
Marta’s share.20 This result conforms to the well-established principle
that the binding force of a contract must be recognized as far as it is
legally possible to do so (quando res non valet ut ago, valeat quantum
valere potest).21
Article 105 of the Family Code, supra, expressly provides that the
applicability of the rules on dissolution of the conjugal partnership is
"without prejudice to vested rights already acquired in accordance
with the Civil Code or other laws." This provision gives another reason
not to declare the sale as entirely void. Indeed, such a declaration
prejudices the rights of Servacio who had already acquired the shares
of Protacio, Sr. and Rito in the property subject of the sale.
In their separate comments,22 the respondents aver that each of the
heirs had already received "a certain allotted portion" at the time of
the sale, and that Protacio, Sr. and Rito sold only the portions
adjudicated to and owned by them. However, they did not present
any public document on the allocation among her heirs, including
themselves, of specific shares in Marta’s estate. Neither did they aver
that the conjugal properties had already been liquidated and
partitioned. Accordingly, pending a partition among the heirs of
Marta, the efficacy of the sale, and whether the extent of the property
sold adversely affected the interests of the petitioners might not yet
be properly decided with finality. The appropriate recourse to bring
that about is to commence an action for judicial partition, as
instructed in Bailon-Casilao v. Court of Appeals,23 to wit:
From the foregoing, it may be deduced that since a co-owner is
entitled to sell his undivided share, a sale of the entire property by
one
co-owner without the consent of the other co-owners is not null and
void. However, only the rights of the co-owner-seller are transferred,
thereby making the buyer a co-owner of the property.
The proper action in cases like this is not for the nullification of the
sale or for the recovery of possession of the thing owned in common
from the third person who substituted the co-owner or co-owners
who alienated their shares, but the DIVISION of the common property
as if it continued to remain in the possession of the co-owners who
possessed and administered it [Mainit v. Bandoy, supra].1avvphi1

Thus, it is now settled that the appropriate recourse of co-owners in

cases where their consent were not secured in a sale of the entire
property as well as in a sale merely of the undivided shares of some
of the co-owners is an action for PARTITION under Rule 69 of the
Revised Rules of Court. xxx24

In the meanwhile, Servacio would be a trustee for the benefit of the

co-heirs of her vendors in respect of any portion that might not be
validly sold to her. The following observations of Justice Paras are
explanatory of this result, viz:

xxx [I]f it turns out that the property alienated or mortgaged really
would pertain to the share of the surviving spouse, then said
transaction is valid. If it turns out that there really would be, after
liquidation, no more conjugal assets then the whole transaction is null
and void.1âwphi1 But if it turns out that half of the property thus
alienated or mortgaged belongs to the husband as his share in the
conjugal partnership, and half should go to the estate of the wife,
then that corresponding to the husband is valid, and that
corresponding to the other is not. Since all these can be determined
only at the time the liquidation is over, it follows logically that a
disposal made by the surviving spouse is not void ab initio. Thus, it has
been held that the sale of conjugal properties cannot be made by the
surviving spouse without the legal requirements. The sale is void as to
the share of the deceased spouse (except of course as to that portion
of the husband’s share inherited by her as the surviving spouse). The
buyers of the property that could not be validly sold become trustees
of said portion for the benefit of the husband’s other heirs, the cestui
que trust ent. Said heirs shall not be barred by prescription or by
laches (See Cuison, et al. v. Fernandez, et al.,L-11764, Jan.31, 1959.)25

WHEREFORE, we DENY the petition for review on certiorari; and

AFFIRM the decision of the Regional Trial Court.

The petitioners shall pay the costs of suit.

SO ORDERED.
G.R. No. 200274
MELECIO DOMINGO, Petitioner,
vs.
SPOUSES GENARO MOLINA and ELENA B. MOLINA, substituted by
ESTER MOLINA, Respondents.
BRION, J.:
We resolve the petition for review on certiorari1 filed by the
petitioner Melecio Domingo (Melecio) assailing the August 9, 2011
decision2 and January 10, 2012 resolution3 of the Court of
Appeals (CA) in CA-G.R. CV No. 94160.
THE FACTS
In June 15, 1951, the spouses Anastacio and Flora Domingo bought a
property in Camiling, Tarlac, consisting of a one-half undivided
portion over an 18, 164 square meter parcel of land. The sale was
annotated on the Original Certificate of Title (OCT) No. 16354
covering the subject property.
During his lifetime, Anastacio borrowed money from the respondent
spouses Genaro and Elena Molina (spouses Molina). On September
10, 1978 or 10 years after Flora’s death4, Anastacio sold his interest
over the land to the spouses Molina to answer for his debts. The sale
to the spouses Molina was annotated at the OCT of the subject
property.5 In 1986, Anastacio died.6
In May 19, 1995, the sale of Anastacio’s interest was registered under
Transfer Certificate of Title (TCT) No. 272967[[7 ]]and transferred the
entire one-half undivided portion of the land to the spouses Molina.
Melecio, one of the children of Anastacio and Flora, learned of the
transfer and filed a Complaint for Annulment of Title and Recovery
of Ownership (Complaint) against the spouses Molina on May 17,
1999.8
Melecio claims that Anastacio gave the subject property to the
spouses Molina to serve as collateral for the money that Anastacio
borrowed. Anastacio could not have validly sold the interest over the
subject property without Flora’s consent, as Flora was already dead
at the time of the sale.
Melecio also claims that Genaro Molina must have falsified the
document transferring Anastacio and Flora’s one-half undivided
interest over the land. Finally, Melecio asserts that he occupied the
subject property from the time of Anastacio’s death up to the time he
filed the Complaint.9
Melecio presented the testimonies of the Records Officer of the
Register of Deeds of Tarlac, and of Melecio’s nephew, George
Domingo (George).10
The Records Officer testified that he could not locate the instrument
that documents the transfer of the subject property ownership from
Anastacio to the spouses Molina. The Records Officer also testified
that the alleged sale was annotated at the time when Genaro Molina’s
brother was the Register of Deeds for Camiling, Tarlac.11
George, on the other hand, testified that he has been living on the
subject property owned by Anastacio since 1986. George testified,
however, that aside from himself, there were also four other
occupants on the subject property, namely Jaime Garlitos, Linda
Sicangco, Serafio Sicangco and Manuel Ramos.12
The spouses Molina asserted that Anastacio surrendered the title to
the subject property to answer for his debts and told the spouses
Molina that they already own half of the land. The spouses Molina
have been in possession of the subject property before the title was
registered under their names and have religiously paid the property’s
real estate taxes.
The spouses Molina also asserted that Melecio knew of the disputed
sale since he accompanied Anastacio several times to borrow money.
The last loan was even used to pay for Melecio’s wedding. Finally, the
spouses Molina asserted that Melecio built his nipa hut on the subject
property only in 1999, without their knowledge and consent.13
The spouses Molina presented Jaime Garlitos (Jaime) as their sole
witness and who is one of the occupants of the subject lot.
Jaime testified that Elena Molina permitted him to build a house on
the subject property in 1993. Jaime, together with the other tenants,
planted fruit bearing trees on the subject property and gave portions
of their harvest to Elena Molina without any complaint from Melecio.
Jaime further testified that Melecio never lived on the subject
property and that only George Domingo, as the caretaker of the
spouses Molina, has a hut on the property.
Meanwhile, the spouses Molina died during the pendency of the case
and were substituted by their adopted son, Cornelio Molina.14
THE RTC RULING
The Regional Trial Court (RTC) dismissed15 the case because Melecio
failed to establish his claim that Anastacio did not sell the property to
the spouses Molina.
The RTC also held that Anastacio could dispose of conjugal property
without Flora’s consent since the sale was necessary to answer for
conjugal liabilities.
The RTC denied Melecio’s motion for reconsideration of the RTC
ruling. From this ruling, Melecio proceeded with his appeal to the CA.
THE CA RULING
In a decision dated August 9, 2011, the CA affirmed the RTC ruling in
toto.
The CA held that Melecio failed to prove by preponderant evidence
that there was fraud in the conveyance of the property to the spouses
Molina. The CA gave credence to the OCT annotation of the disputed
property sale.
The CA also held that Flora’s death is immaterial because Anastacio
only sold his rights, excluding Flora’s interest, over the lot to the
spouses Molina.1âwphi1 The CA explained that "[t]here is no
prohibition against the sale by the widower of real property formerly
belonging to the conjugal partnership of gains"16.
Finally, the CA held that Melecio’s action has prescribed. According to
the CA, Melecio failed to file the action within one year after entry of
the decree of registration.
Melecio filed a motion for reconsideration of the CA Decision. The CA
denied Melecio’s motion for reconsideration for lack of merit.17
THE PETITION
Melecio filed the present petition for review on certiorari to challenge
the CA ruling.
Melecio principally argues that the sale of land belonging to the
conjugal partnership without the wife’s consent is invalid.
Melecio also claims that fraud attended the conveyance of the subject
property and the absence of any document evidencing the alleged
sale made the transfer null and void. Finally, Melecio claims that the
action has not yet prescribed.
The respondents, on the other hand, submitted and adopted their
arguments in their Appeal Brief18.
First, Melecio’s counsel admitted that Anastacio had given the lot title
in payment of the debt amounting to Php30,000.00. The delivery of
the title is constructive delivery of the lot itself based on Article 1498,
paragraph 2 of
the Civil Code.
Second, the constructive delivery of the title coupled with the spouses
Molina’s exercise of attributes of ownership over the subject
property, perfected the sale and completed the transfer of
ownership.
THE ISSUES
The core issues of the petition are as follows: (1) whether the sale of
a conjugal property to the spouses Molina without Flora’s consent is
valid and legal; and (2) whether fraud attended the transfer of the
subject property to the spouses Molina.
OUR RULING
We deny the petition.
It is well settled that when the trial court’s factual findings have been
affirmed by the CA, the findings are generally conclusive and binding
upon the Court and may no longer be reviewed on Rule 45
petitions.19 While there are exceptions20 to this rule, the Court finds
no applicable exception with respect to the lower courts’ finding that
the subject property was Anastacio and Flora’s conjugal property.
Records before the Court show that the parties did not dispute the
conjugal nature of the property.
Melecio argues that the sale of the disputed property to the spouses
Molina is void without Flora’s consent.
We do not find Melecio’s argument meritorious.
Anastacio and Flora’s
conjugal partnership was
dissolved upon Flora’s death.
There is no dispute that Anastacio and Flora Domingo married before
the Family Code’s effectivity on August 3, 1988 and their property
relation is a conjugal partnership.21
Conjugal partnership of gains established before and after the
effectivity of the Family Code are governed by the rules found in
Chapter 4 (Conjugal Partnership of Gains) of Title IV (Property
Relations Between Husband and Wife) of the Family Code. This is clear
from Article 105 of the Family Code which states:
x x x The provisions of this Chapter shall also apply to conjugal
partnerships of gains already established between spouses before the
effectivity of this Code, without prejudice to vested rights
already acquired in accordance with the Civil Code or other laws, as
provided in Article 256.
The conjugal partnership of Anastacio and Flora was dissolved when
Flora died in 1968, pursuant to Article 175 (1) of the Civil Code22 (now
Article 126 (1) of the Family Code).
Article 130 of the Family Code requires the liquidation of the conjugal
partnership upon death of a spouse and prohibits any disposition or
encumbrance of the conjugal property prior to the conjugal
partnership liquidation, to quote:
Article 130. Upon the termination of the marriage by death, the
conjugal partnership property shall be liquidated in the same
proceeding for the settlement of the estate of the deceased.
If no judicial settlement proceeding is instituted, the surviving spouse
shall liquidate the conjugal partnership property either judicially or
extrajudicially within one year from the death of the deceased
spouse. If upon the lapse of the six month period no liquidation is
made, any disposition or encumbrance involving the conjugal
partnership property of the terminated marriage shall be void. x x x
(emphases supplied)
While Article 130 of the Family Code provides that any disposition
involving the conjugal property without prior liquidation of the
partnership shall be void, this rule does not apply since the provisions
of the Family Code shall be "without prejudice to vested rights already
acquired in accordance with the Civil Code or other laws."23
An implied co-ownership
among Flora’s heirs governed
the conjugal properties
pending liquidation and
partition.
In the case of Taningco v. Register of Deeds of Laguna,24 we held that
the properties of a dissolved conjugal partnership fall under the
regime of co-ownership among the surviving spouse and the heirs of
the deceased
spouse until final liquidation and partition. The surviving spouse,
however, has an actual and vested one-half undivided share of the
properties, which does not consist of determinate and segregated
properties until liquidation
and partition of the conjugal partnership.
An implied ordinary co-ownership ensued among Flora’s surviving
heirs, including Anastacio, with respect to Flora’s share of the
conjugal partnership until final liquidation and partition; Anastacio,
on the other hand, owns one-half of the original conjugal partnership
properties as his share, but this is an undivided interest.
Article 493 of the Civil Code on co-ownership provides:
Article 493. Each co-owner shall have the full ownership of his part
and of the fruits and benefits pertaining thereto, and
he may therefore alienate, assign or mortgage it, and even substitute
another person in its enjoyment, except when personal rights are
involved. But the effect of the alienation or the mortgage, with
respect to the co-owners, shall be limited to the portion which may
be allotted to him in the division upon the termination of the co-
ownership. (399) (emphases supplied)
Thus, Anastacio, as co-owner, cannot claim title to any specific
portion of the conjugal properties without an actual partition being
first done either by agreement or by judicial decree. Nonetheless,
Anastacio had the right to freely sell and dispose of his undivided
interest in the subject property.
The spouses Molina became
co-owners of the subject
property to the extent of
Anastacio’s interest.
The OCT annotation of the sale to the spouses Molina reads
that "[o]nly the rights, interests and participation of Anastacio
Domingo, married to Flora Dela Cruz, is hereby sold, transferred, and
conveyed unto the said vendees for the sum of ONE THOUSAND
PESOS (P1,000.00) which pertains to an undivided one-half (1/2)
portion and subject to all other conditions specified in the document
x x x"25 (emphases supplied). At the time of the sale, Anastacio’s
undivided interest in the conjugal properties consisted of: (1) one-half
of the entire conjugal properties; and (2) his share as Flora’s heir on
the conjugal properties.
Anastacio, as a co-owner, had the right to freely sell and dispose of
his undivided interest, but not the interest of his co-owners.
Consequently, Anastactio’s sale to the spouses Molina without the
consent of the other co-owners was not totally void, for Anastacio’s
rights or a portion thereof were thereby effectively transferred,
making the spouses Molina a co-owner of the subject property to the
extent of Anastacio’s interest. This result conforms with the well-
established principle that the binding force of a contract must be
recognized as far as it is legally possible to do so (quando res non valet
ut ago, valeat quantum valere potest).26
The spouses Molina would be a trustee for the benefit of the co-heirs
of Anastacio in respect of any portion that might belong to the co-
heirs after liquidation and partition. The observations of Justice Paras
cited in the case of Heirs of Protacio Go, Sr. V. Servacio27 are
instructive:
x x x [I]f it turns out that the property alienated or mortgaged really
would pertain to the share of the surviving spouse, then said
transaction is valid. If it turns out that there really would be, after
liquidation, no more conjugal assets then the whole transaction is null
and void. But if it turns out that half of the property thus alienated or
mortgaged belongs to the husband as his share in the conjugal
partnership, and half should go to the estate of the wife, then that
corresponding to the husband is valid, and that corresponding to the
other is not. Since all these can be determined only at the time the
liquidation is over, it follows logically that a disposal made by the
surviving spouse is not void ab initio. Thus, it has been held that the
sale of conjugal properties cannot be made by the surviving spouse
without the legal requirements. The sale is void as to the share of the
deceased spouse (except of course as to that portion of the husband’s
share inherited by her as the surviving spouse). The buyers of the
property that could not be validly sold become trustees of said
portion for the benefit of the husband’s other heirs, the cestui que
trust ent. Said heirs shall not be barred by prescription or by laches.
Melecio’s recourse as a co-owner of the conjugal properties, including
the subject property, is an action for partition under Rule 69 of the
Revised Rules of Court. As held in the case of Heirs of Protacio Go,
Sr., "it is now settled that the appropriate recourse of co-owners in
cases where their consent were not secured in a sale of the entire
property as well as in a sale merely of the undivided shares of some
of the co-owners is an action for PARTITION under Rule 69 of the
Revised Rules of Court."28
The sale of the subject
property to the spouses Molina
was not attended with fraud.
On the issue of fraud, the lower courts found that there was no fraud
in the sale of the disputed property to the spouses Molina.
The issue of fraud would require the Court to inquire into the weight
of evidentiary matters to determine the merits of the petition and is
essentially factual in nature. It is basic that factual questions cannot
be cannot be entertained in a Rule 45 petition, unless it falls under
any of the recognized exceptions29 found in jurisprudence. The
present petition does not show that it falls under any of the
exceptions allowing factual review.
The CA and RTC conclusion that there is no fraud in the sale is
supported by the evidence on record.
Melecio' s argument that no document was executed for the sale is
negated by the CA finding that there was a notarized deed of
conveyance executed between Anastacio and the spouses Molina, as
annotated on the OCT of the disputed property.
Furthermore, Melecio's belief that Anastacio could not have sold the
property without his knowledge cannot be considered as proof of
fraud to invalidate the spouses Molina's registered title over the
subject property.30
Prevailing jurisprudence uniformly holds that findings of facts of the
trial court, particularly when affirmed by the Court of Appeals, are
binding upon t his court. 31
Considering these findings, we find no need to discuss the other issues
raised by Melecio.
WHEREFORE, we hereby DENY the petition for review
on certiorari. The decision dated August 9, 2011 of the Court of
Appeals in CA-G.R. CV No. 94160 is AFFIRMED.
[ G.R. No. 200612, April 05, 2017 ] annum from the last demand on May 3, 2003 until the
whole amount is paid;
3. to pay the [Estate of Vipa] the amount of Php3,000.00 per
RAFAEL C. UY (CABANGBANG STORE), PETITIONER, V. ESTATE OF
month with 12% interest per annum for the use and
VIPA FERNANDEZ, RESPONDENT.
occupancy of the premises computed from the date of the
filing of this case on June 12, 2003 until fully paid;
REYES, J.: 4. to pay the [Estate of Vipa] attorney's fees in the amount of
This is a Petition for Review on Certiorari[1] under Rule 45 of the Rules Php20,000.00; [and]
of Court seeking to annul and set aside the Decision[2] dated 5. to pay the costs of suit.
November 26, 2010 and Resolution[3] dated January 24, 2012 issued
by the Court of Appeals (CA) in CA-G.R. SP No. 04481.
SO ORDERED.[17]
Facts
The MTCC found that after Vipa's death in 1994 until 1998, Rafael was
Vipa Fernandez Lahaylahay (Vipa) is the registered owner of a parcel
paying the rent for the lease of the subject property to Grace
of land situated in Lopez Jaena Street, Jaro, Iloilo City covered by
Joy.[18] That the real reason why Patria claimed to be the heir of Vipa
Transfer Certificate of Title No. T-26576 (subject property).[4] Vipa and
is because she owed Rafael money which she could not pay. Patria
her husband, Levi Lahaylahay (Levi), have two children – Grace Joy
then charged the debt she owes to Rafael from the monthly rent of
Somosierra (Grace Joy) and Jill Frances Lahaylahay (Jill Frances).[5]
the subject property, an arrangement that Rafael took advantage to
Sometime in 1990, a contract of lease was executed between Vipa
avoid paying Grace Joy the monthly rents. The MTCC further opined
and Rafael Uy (Rafael) over the subject property and the
that the consignations made by Rafael in the total amount of
improvements thereon, pursuant to which, Rafael bound himself to
P16,000.00 are not valid since there was no prior tender of
pay Vipa, as consideration for the lease of the property, the amount
payment.[19]
of P3,000.00 permonth, with a provision for a 10% increase every year
On appeal, the RTC, in its Decision[20] dated April 15, 2009, reversed
thereafter.[6]
the MTCC's Decision dated June 12, 2008 and, thus, dismissed the
On March 5, 1994, Vipa died leaving no will or testament whatsoever.
complaint for unlawful detainer filed by the Estate of Vipa. Thus:
Grace Joy became the de facto administrator of the estate of Vipa.
WHEREFORE, premises considered, the Decision appealed from is
After Vipa's death, Levi lived in Aklan.[7]
REVERSED and SET ASIDE; and the herein complaint is hereby
In June 1998, Rafael stopped paying the monthly
DISMISSED for lack of merit; and further DISMISSING [Rafael's]
rents.[8] Consequently, on June 12, 2003, the Estate of Vipa, through
counterclaim for failure to substantiate the same.
Grace Joy, filed a complaint[9] for unlawful detainer with the
SO ORDERED.[21]
Municipal Trial Court in Cities (MTCC) of Iloilo City against Rafael. It
The RTC opined that Grace Joy was actually the plaintiff in the case
was alleged therein that, as of June 1998, Rafael was already bound
and not the Estate of Vipa. It then pointed out that Grace Joy failed to
to pay rent at the amount of P3,300.00 per month and that his last
bring the dispute to the barangay for conciliation prior to filing the
payment was made in May 1998. Accordingly, at the time of the filing
complaint for unlawful detainer.[22]
of the Complaint, Rafael's unpaid rents amounted to
The RTC further held that the MTCC erred in including the entire
P271,150.00.[10] The Estate of Vipa claimed that despite repeated
subject property as part of the Estate of Vipa. The RTC explained that
demands, Rafael refused to pay the rents due.[11]
the subject property was acquired by Vipa during the subsistence of
her marriage with Levi and, as such, is part of their conjugal
In his Answer,[12] Rafael denied that he refused to pay the rent for the
properties. That after Vipa's death, the conjugal partnership was
lease of the subject property. He claimed that sometime in June 1998
terminated, entitling Levi to one-half of the property.[23] The RTC then
Patria Fernandez-Cuenca (Patria), Vipa's sister, demanded for the
pointed out that Levi sold his share in the subject property to Rafael,
payment of the rents, claiming that she is the rightful heir of
as evidenced by a Deed of Sale[24] dated December 29,
Vipa.[13] Since he had no idea on who is entitled to receive the rent for
2005.[25]Accordingly, the RTC ruled that Rafael, as co-owner of the
the subject property, he deposited the amount of P10,000.00 with the
subject property, having bought Levi's one-half share thereof, had the
Office of the Clerk of Court of the Regional Trial Court (RTC) of Iloilo
right to possess the same.[26]
City on November 20, 1998 and that Grace Joy was informed of such
The Estate of Vipa sought a reconsideration[27] of the Decision dated
consignation.[14] He claimed that a case for the settlement of the
April 15, 2009, but it was denied by the RTC in its Order dated July 28;
Estate of Vipa was instituted by Patria with the RTC, which was
2009.[28]
docketed as Special Proceeding No. 6910. He averred that he is willing
The Estate of Vipa then filed a Petition for Review [29] with the CA. On
to pay the rent on the leased property to the rightful heirs of Vipa and
November 26, 2010, the CA rendered a Decision,[30] which declared:
that he made another consignation with the RTC in the amount of
WHEREFORE, in view of all the foregoing, the instant petition for
P6,000.00.[15]
review is GRANTED and the April 15, 2009 Decision of the court a quo
in Civil Case No. 08-29842 is hereby REVERSED and SET ASIDE.
On June 12, 2008, the MTCC rendered a Decision,[16] the decretal
Accordingly, the June 12, 2008 Decision of the Municipal Trial Court,
portion of which reads:
Branch 4, Iloilo City, in Civil Case No. 03-208 is hereby REINSTATED.
WHEREFORE, in the light of the foregoing ratiocination, judgment is
SO ORDERED.[31]
hereby rendered in favor of the [Estate of Vipa] and against [Rafael],
ordering the latter, to wit:
The CA held that there was no necessity to bring the dispute before
the barangay for conciliation since the Estate of Vipa, being a juridical
1. to vacate the premises subject of this case and covered by person, cannot be impleaded to a barangay conciliation proceeding.
TCT No. T-26576 and to peacefully turn over the possession The CA likewise pointed out that any allegations against Grace Joy's
of the same to the [Estate of Vipa]; authority to represent the Estate of Vipa had been laid to rest when
2. to pay the [Estate of Vipa] the amount of Php271,150.00 as she was appointed as administrator of the Estate of Vipa in Special
payment for the unpaid rentals with 12% interest per Proceedings No. 6910 pending before the RTC.[32]
Further, the CA held that Rafael raised the issue of ownership of the
subject property, i.e., Levi's sale of his one-half share in the subject
property to Rafael, only for the first time in his appeal with the RTC.
Accordingly, it was error on the part of the RTC to have resolved the
issue of ownership of the subject property.[33] Furthermore, the CA
agreed with the MTCC that Rafael's consignation of the rent to the
RTC is ineffective. It ruled that Rafael made the consignation only
twice and the amount consigned was patently insignificant compared
to the amount of rent due.[34]
Rafael's motion for reconsideration[35] was denied by the CA in its
Resolution[36] dated January 24, 2012.
Hence, the instant petition.
Rafael maintains that Grace Joy has no authority to represent the
Estate of Vipa and, when she filed the complaint for unlawful detainer
with the MTCC, she did so in her personal capacity. Thus, Rafael claims
that the dispute should have been brought to the barangay for
conciliation before the complaint was filed in the MTCC.[37] He further
claims that the CA erred in . reversing the RTC's ruling on the issue of
ownership of the subject property. He insists that he already
purchased Levi's one-half share in the subject property.[38]
On the other hand, the Estate of Vipa, in its Comment,[39] avers that
the supposed lack of authority of Grace Joy to file the complaint for
unlawful detainer and the ownership of the subject property were
never raised in the proceedings before the MTCC and, hence, could
not be passed upon by the RTC in the appellate proceedings. In any
case, it pointed out that the RTC's Decision[40] dated October 28, 2005
in Special Proceedings No. 6910, which appointed Grace Joy as the
administrator of the intestate estate of Vipa, recognized that the
latter and Jill Frances are legitimate children of Vipa and Levi.
Issue
Essentially, the issue set forth for the Court's resolution is whether
the CA erred in reversing the RTC's Decision dated April 15, 2009.
Ruling of the Court
The petition is partly meritorious.
Rafael's claim that the complaint below should have been dismissed
since Grace Joy has no authority to represent the Estate of Vipa and
that there was lack of prior barangay conciliation is untenable.
Unlawful detainer cases are covered by the Rules on Summary
Procedure.[41] Section 5 of the 1991 Revised Rules on Summary
Procedure provides that affirmative and negative defenses not
pleaded in the answer shall be deemed waived, except lack of
jurisdiction over the subject matter.
Rafael failed to plead in the answer he filed with the MTCC that Grace
Joy has no authority to represent the Estate of Vipa. Neither did he
raise therein the lack of barangay conciliation between the parties
herein prior to the filing of the complaint for unlawful detainer.
Accordingly, the foregoing defenses are already deemed waived.
In any case, the issue of the supposed lack of authority of Grace Joy
to represent the Estate of Vipa had already been rendered moot with
the RTC's appointment of Grace Joy as the administrator of the Estate
of Vipa in Special Proceedings No. 6910.
Also, there was no need to refer the dispute between the parties
herein to the barangay for conciliation pursuant to the Katarungang
Pambarangay Law.[42] It bears stressing that only individuals may be
parties to barangay conciliation proceedings either as complainants
or respondents. Complaints by or against corporations, partnerships
or other juridical entities may not be filed with, received or acted
upon by the barangay for conciliation.[43] The Estate of Vipa, which is
the complainant below, is a juridical entity that has a personality,
which is separate and distinct from that of Grace Joy.[44] Thus, there is
no necessity to bring the dispute to the barangay for conciliation prior
to filing of the complaint for unlawful detainer with the MTCC.
The CA, nevertheless, erred in hastily dismissing Rafael's allegation as
regards the ownership of the subject property. In disregarding
Rafael's claim that he owns Levi's one-half undivided share in the
subject property, the CA ruled that the said issue was raised for the
first time on appeal and should thus not have been considered by the
RTC, viz.:
On the second issue, the records show that [Rafael] raised the issue
of ownership only for the first time on appeal; hence, the [RTC] erred
in deciding the appeal before it on the findings that part of the subject
premises is owned by petitioners, allegedly having bought the same
from [Levi], the husband of [Vipa].
The Court is not unmindful that in forcible entry and unlawful detainer
cases, the MTC may rule on the issue [of] ownership in order to
determine the issue of possession. However, the issue of ownership
must be raised by the defendant on the earliest opportunity;
otherwise, it is already deemed waived. Moreover, the instant case
was covered by the Rules on Summary Procedure, which expressly
provide that affirmative and negative defenses not pleaded therein
shall be deemed waived, except for lack of jurisdiction over the
subject matter. Thus, the [RTC] erred in resolving the issue of
ownership for the first time on appeal.[45] (Citations omitted)
It is true that fair play, justice, and due process dictate that parties
should not raise for the first time on appeal issues that they could
have raised but never did during trial. However, before a party may
be barred from raising an issue for the first time on appeal, it is
imperative that the issue could have been raised during the
trial.[46] What escaped the appellate court's attention is that the sale
of the one-half undivided share in the subject property to Rafael was
consummated only on December 29, 2005, more than two years after
Rafael filed with the MTCC his answer to the complaint for unlawful
detainer on July 18, 2003.[47] Obviously, Rafael could not have raised
his acquisition of Levi's share in the subject property as an affirmative
defense in the answer he filed with the MTCC.
Moreover, Rafael's ownership of the one-half undivided share in the
subject property would necessarily affect the property relations
between the parties herein. Thus, the CA should have exerted efforts
to resolve the said issue instead of dismissing the same on the flimsy
ground that it was not raised during the proceedings before the
MTCC.
Levi and Vipa were married on March 24, 1961[48] and, in the absence
of a marriage settlement, the system of conjugal partnership of gains
governs their property relations.[49] It is presumed that the subject
property is part of the conjugal properties of Vipa and Levi considering
that the same was acquired during the subsistence of their marriage
and there being no proof to the contrary.[50]
When Vipa died on March 5, 1994, the conjugal partnership was
automatically terminated.[51] Under Article 130 of the Family Code,
the conjugal partnership property, upon its dissolution due to the
death of either spouse, should be liquidated either in the same
proceeding for the settlement of the estate of the deceased or, in the
absence thereof, by the surviving spouse within one year from the
death of the deceased spouse. That absent any liquidation, any
disposition or encumbrance of the conjugal partnership property is
void. Thus:
Article 130. Upon the termination of the marriage by death, the
conjugal partnership property shall be liquidated in the same
proceeding for the settlement of the estate of the deceased.
If no judicial settlement proceeding is instituted, the surviving
spouse shall liquidate the conjugal partnership property either
judicially or extra-judicially within six months from the death of the
deceased spouse. If upon the lapse of the six-month period no
liquidation is made, any disposition or encumbrance involving the
conjugal partnership property of the terminated marriage shall be
void.
Should the surviving spouse contract a subsequent marriage without
compliance with the foregoing requirements, a mandatory regime of
complete separation of property shall govern the property relations
of the subsequent marriage. (Emphasis ours)
Article 130 of the Family Code is applicable to conjugal partnership of
gains already established between the spouses prior to the effectivity
of the Family Code pursuant to Article 105 thereof, viz.:
Article 105. In case the future spouses agree in the marriage
settlements that the regime of conjugal partnership of gains shall
govern their property relations during marriage, the provisions in this
Chapter shall be of supplementary application.
The provisions of this Chapter shall also apply to conjugal
partnerships of gains already established between spouses before
the effectivity of this Code, without prejudice to vested rights already
acquired in accordance with the Civil Code or other laws as provided
in Article 256. (Emphasis ours)
Rafael bought Levi's one-half share in the subject property in
consideration of P500,000.00 as evidenced by the Deed of
Sale[52] dated December 29, 2005. At that time, the conjugal
partnership properties of Levi and Vipa were not yet liquidated.
However, such disposition, notwithstanding the absence of
liquidation of the conjugal partnership properties, is not necessarily
void.
It bears stressing that under the regime of conjugal partnership of
gains, the husband and wife are co-owners of all the property of the
conjugal partnership.[53] Thus, upon the termination of the conjugal
partnership of gains due to the death of either spouse, the surviving
spouse has an actual and vested one-half undivided share of the
properties, which does not consist of determinate and segregated
properties until liquidation and partition of the conjugal
partnership.[54] With respect, however, to the deceased spouse's
share in the conjugal partnership properties, an implied ordinary co-
ownership ensues among the surviving spouse and the other heirs of
the deceased.[55]
Thus, upon Vipa's death, one half of the subject property was
automatically reserved in favor of the surviving spouse, Levi, as his
share in the conjugal partnership. The other half, which is Vipa's
share, was transmitted to Vipa's heirs – Grace Joy, Jill Frances, and her
husband Levi, who is entitled to the same share as that of a legitimate
child. The ensuing implied co-ownership is governed by Article 493 of
the Civil Code, which provides:
Article 493. Each co-owner shall have the full ownership of his part
and of the fruits and benefits pertaining thereto, and he may
therefore alienate, assign or mortgage it, and even substitute
another person in its enjoyment, except when personal rights are
involved. But the effect of the alienation or the mortgage, with
respect to the co-owners, shall be limited to the portion which may
be allotted to him in the division upon the termination of the co-
ownership. (Emphasis ours)
Although Levi became a co-owner of the conjugal partnership
properties with Grace Joy and Jill Frances, he could not yet assert or
claim title to any specific portion thereof without an actual partition
of the property being first done either by agreement or by judicial
decree. Before the partition of a land or thing held in common, no
individual or co-owner can claim title to any definite portion thereof.
All that the co-owner has is an ideal or abstract quota or
proportionate share in the entire land or thing.[56]
Nevertheless, a co-owner could sell his undivided share; hence, Levi
had the right to freely sell and dispose of his undivided interest. Thus,
the sale by Levi of his one-half undivided share in the subject property
was not necessarily void, for his right as a co-owner thereof was
effectively transferred, making the buyer, Rafael, a co-owner of the
subject property. It must be stressed that the binding force of a
contract must be recognized as far as it is legally possible to do so
(quando res non valet ut ago, valeat quantum valere potest).[57]
However, Rafael became a co-owner of the subject property only on
December 29, 2005 – the time when Levi sold his one-half undivided
share over the subject property to the former. Thus, from December
29, 2005 Rafael, as a co-owner, has the right to possess the subject
property as an incident of ownership. Otherwise stated, prior to his
acquisition of Levi's one-half undivided share, Rafael was a mere
lessee of the subject property and is thus obliged to pay the rent for
his possession thereof.
Accordingly, Rafael could no longer be directed to vacate the subject
property since he is already a co-owner thereof. Nevertheless, Rafael
is still bound to pay the unpaid rentals from June 1998 until April 2003
in the amount of P271,150.00. In Nacar v. Gallery Frames, et
al.,[58] the Court pointed out that pursuant to Resolution No. 796 of
the Bangko Sentral ng Pilipinas Monetary Board, the interest rate of
loans or forbearance of money, in the absence of stipulation shall be
six percent (6%) effective only from July 1, 2013. Thus, prior to July 1,
2013, the rate of interest on loans or forbearance of money, in the
absence of stipulation, is still 12%. Accordingly, the amount of
P271,150.00, representing the unpaid rentals shall earn interest at
the rates of 12% per annum from the date of the last demand on May
3, 2003 until June 30, 2013 and 6% per annum from July 1, 2013 until
fully paid.
Further, Rafael is likewise bound to pay reasonable rent for the use
and occupancy of the subject property from May 2003 until
December 28, 2005 at the rate of P3,000.00 per month with interest
at the rate of 12% per annum from the date of the last demand, i.e.,
the filing of the complaint with the MTCC on June 12, 2003, until June
30, 2013 and 6% per annum from July 1, 2013 until fully paid.
The award of attorney's fees of P20,000.00 is likewise proper.
Attorney's fees can be awarded in the cases enumerated in Article
2208 of the Civil Code, specifically:
Article 2208. x x x
xxxx
(2) Where the defendant's act or omission has compelled the plaintiff
to litigate with third persons or to incur expenses to protect his
interest[.]
Certainly, because of Rafael's unjustified refusal to pay the rents due
on the lease of the subject prope1iy, the Estate of Vipa was put to
unnecessary expense and trouble to protect its interest under
paragraph (2), Article 2208 of the Civil Code. In unlawful detainer
cases, where attorney's fees are awarded, the same shall not exceed
P20,000.00.[59]
WHEREFORE, in view of the foregoing disquisitions, the petition for
review on certiorari is PARTIALLY GRANTED. The Decision dated
November 26, 2010 and Resolution dated January 24, 2012 issued by
the Court of Appeals in CA-G.R. SP No. 04481 are
hereby REVERSED and SET ASIDE. Petitioner Rafael C. Uy is hereby
directed to pay the Estate of Vipa Fernandez the following:
1. The amount of P271,150.00, representing the unpaid
rentals, with interest at the rates of twelve percent (12%)
 per annum from the date of the last demand on May 3,
2003 until June 30, 2013, and six percent (6%) per
annum from July 1, 2013 until fully paid;
2. Reasonable rent for the use and occupancy of the subject
property from May 2003 until December 28, 2005 at the
rate of P3,000.00 per month with interest at the rates of
twelve percent (12%) per annum from the date of the last
demand, i.e., the filing of the complaint for unlawful
detainer on June 12, 2003, until June 30, 2013, and six
percent (6%) per annum from July 1, 2013 until fully paid;
and
3. The amount of P20,000.00 as attorney's fees.
SO ORDERED.
G.R. No. 234533
SPOUSES JULIETA B. CARLOS and FERNANDO P. CARLOS, Petitioners
vs.
JUAN CRUZ TOLENTINO, Respondent
DECISION
VELASCO, JR., J.:
Nature of the Case
Before this Court is a petition for review on certiorari under Rule 45
of the Rules of Court assailing the April 5, 2017 Decision1 and the
September 27, 2017 Resolution2 of the Court of Appeals (CA) in CA-
G.R. CV No. 106430. The challenged rulings reversed and set aside the
October 16, 2015 Decision3 and the December 9, 2015 Order4 of the
Regional Trial Court (RTC) of Quezon City, Branch 87 which dismissed
respondent's complaint for annulment of title against the petitioners.
The Facts
The instant case arose from a complaint for annulment of title with
damages filed by respondent Juan Cruz Tolentino (Juan) against his
wife, Mercedes Tolentino (Mercedes), his grandson, Kristoff M.
Tolentino (Kristoff), herein petitioners Spouses Julieta B. Carlos
(Julieta) and Fernando P. Carlos (Spouses Carlos), and the Register of
Deeds of Quezon City.
The subject matter of the action is a parcel of land with an area of
1,000 square meters and all the improvements thereon located in
Novaliches,5 Quezon City, covered by Transfer Certificate of Title
(TCT) No. RT-90746 (116229) issued on March 17, 1967 and registered
in the name of Juan C. Tolentino, married to Mercedes Tolentino (the
subject property). 6
Without Juan's knowledge and consent, Mercedes and Kristoff, who
were then residing in the subject property, allegedly forged a Deed of
Donation 7 dated February 15, 2011, thereby making it appear that
Juan and Mercedes donated the subject property to Kristoff. Thus, by
virtue of the alleged forged Deed of Donation, Kristoff caused the
cancellation of TCT No. RT-90764 (116229), and in lieu thereof, TCT
No. 004-20110033208 was issued in his name on March 9, 2011. 9
In April 2011, Kristoff offered the sale of the subject property to
Julieta's brother, Felix Bacal (Felix), who is also the administrator of
the lot owned by Julieta which is adjacent to the subject property.
When Felix informed Julieta of the availability of the subject property,
Spouses Carlos then asked him to negotiate for its purchase with
Kristoff. Kristoff and Felix then arranged for the ocular inspection of
the subject property. Thereafter, Kristoff surrendered to Felix copies
of the title and tax declaration covering the said property. 10
After a series of negotiations, Kristoff and Julieta executed a
Memorandum of Agreement11 (MOA) dated April 12, 2011 stating
that Kristoff is selling the subject property to Julieta in the amount of
Two Million Three Hundred Thousand Pesos (P2,300,000.00), payable
in two (2) installments. On May 28, 2011, Julieta made the first
payment in the amount of Two Million Pesos (₱2,000,000.00) 12 while
the second payment in the amount of Three Hundred Thousand Pesos
(P300,000.00) was made on June 30, 2011. 13 On the same day, a
Deed of Absolute Sale 14 was executed between Kristoff and Julieta.
Upon learning of the foregoing events, Juan executed an Affidavit of
Adverse Claim which was annotated on TCT No. 004-2011003320 on
July 15, 2011, to wit:
NOTICE OF ADVERSE CLAIM : EXECUTED UNDER OATH BY JUAN C.
TOLENTINO, CLAIMING FOR THE RIGHTS, INTEREST AND
PARTICIPATION OVER THE PROPERTY, STATING AMONG OTHERS
THAT HE DISCOVERED ON JULY 14, 2011 THAT SAID PARCEL OF LAND
HAS BEEN DONATED TO KRISTOFF M. TOLENTINO BY VIRTUE OF A
DEED OF DONATION PU[R]PORTEDL Y EXECUTED BY JUAN C.
TOLENTINO & MERCEDES SERRANO ONFEB. 15, 2011. THAT AS A
RESULT OF THE FORGED DEED OF DONATION, HIS TITLE WAS
CANCELLED. THAT HE DECLARE THAT HE HA VE NOT SIGNED ANY
DEED OF DONATION IN FAVOR OF SAID KRISTOFF M. TOLENTINO.
NEITHER DID HE SELL, TRANSFER NOR WAIVE ms RIGHTS OF
OWNERSHIP OVER THE SAID PROPERTY. OTHER CONDITIONS SET
FORTH IN DOC. NO. 253, PAGE NO. 52, BOOK NO. V, SERIES OF 2011
OF NOTARY PUBLIC OF QC, MANNY GRAGASIN. DATE INSTRUMENT-
JUNE 15, 2011 15
Juan also filed a criminal complaint for Falsification of Public
Document before the Office of the City Prosecutor of Quezon City
against Kristoff. 16 A Resolution for the filing of Information for
Falsification of Public Document against Kristoff was then issued on
January 10, 2012. Accordingly, an Information dated February 15,
2012 was filed against him. 17
Meanwhile, Kristoff and Julieta executed another Deed of Absolute
Sale18 dated September 12, 2011 over the subject property and, by
virtue thereof, the Register of Deeds of Quezon City cancelled TCT No.
004- 2011003320 and issued TCT No. 004-201101350219 on
December 5, 2011 in favor of Spouses Carlos. The affidavit of adverse
claim executed by Juan was duly carried over to the title of Spouses
Carlos.
On February 23, 2012, Juan filed a complaint for annulment of title
with damages against Mercedes, Kristoff, Spouses Carlos, and the
Register of Deeds of Quezon City before the R TC of Quezon City. The
case was raffled to Branch 87 and docketed as Civil Case No. Q-12-
70832.
RTC Ruling
In its October 16, 2015 Decision, the RTC found that Juan's signature
in the Deed of Donation dated Februaru 15, 2011 was a
forgery. 20 Despite such finding, however, it dismissed Juan's
complaint.
The R TC found that at the time Spouses Carlos fully paid the agreed
price in the MOA on June 30, 2011, which culminated in the execution
of the Deed of Absolute Sale on even date, Kristoff was the registered
owner of the subject property covered by TCT No. 004-2011003320.
Further, when the MOA and the Deed of Absolute Sale dated June 30,
2011 were executed, nothing was annotated on the said title to
indicate the adverse claim of Juan or any other person. It was only on
July 15, 2011 when Juan's adverse claim was annotated on Kristoff's
title.21
The fact that a second Deed of Absolute Sale dated September 12,
2011 was executed is immaterial since the actual sale of the subject
property took place on June 30, 2011 when Spouses Carlos fully paid
the purchase price. Thus, relying on the face of Kristoff s title without
any knowledge of irregularity in the issuance thereof and having paid
a fair and full price of the subject property before they could be
charged with knowledge of Juan's adverse claim, the RTC upheld
Spouses Carlos' right over the subject property. The dispositive
portion of the October 16, 2015 Decision states:
WHEREFORE, viewed in the light of the foregoing, the instant
complaint for Annulment of Title and Damages against the defendant
spouses Fernando and Julieta Carlos is hereby DISMISSED for failure
of the plaintiff to prove his cause of action. This is without prejudice,
however to any appropriate remedy the plaintiff may take against
Kristoff Tolentino and Mercedes Tolentino.
The defendant spouses' counterclaim is DISMISSED for lack of merit.
SO ORDERED.22
Juan moved for reconsideration of the said decision but was denied
by the R TC in its December 9, 2015 Order. Thus, he interposed an
appeal before the CA.
CA Ruling
On appeal, the CA found that Spouses Carlos were negligent in not
taking the necessary steps to determine the status of the subject
property prior to their purchase thereof. It stressed that Julieta failed
to examine Kristoff s title and other documents before the sale as she
merely relied on her brother, Felix.23 Accordingly, the CA ruled that
Juan has a better right over the subject property. The fallo of the April
5, 2017 Decision reads:
WHEREFORE, the appeal is GRANTED. The appealed Decision of the
RTC of Quezon City dated October 16, 2015 is
hereby REVERSED and SET ASIDE. Accordingly, plaintiff-appellant
Juan Cruz Tolentino is recognized to have a better right over the
subject property. The Register of Deeds of Quezon City is ORDERED to
reinstate TCT No. RT-90746 (116229) in the name of Juan Cruz
Tolentino and to cancel TCT No. 004-2011013502 in the names of
Spouses Julieta and Fernando Carlos, and the latter to surrender
possession of the subject property to Juan Cruz Tolentino.
SO ORDERED.24
Spouses Carlos then filed a motion for reconsideration but the same
was denied by the CA in its September 27, 2017 Resolution.
Hence, the instant petition.
The Issue
Spouses Carlos anchor their plea for the reversal of the assailed
Decision on the following grounds: 25
The Court of Appeals acted injudiciously, and with grievous abuse of
discretion in the appreciation of facts and in disregard of
jurisprudence, when it granted respondent's appeal, and thereby
arbitrarily and despotically ratiocinated that -
I. Petitioners are not buyers in good faith of the litigated real property,
but who are otherwise devoid of notice let alone knowledge of any
flaw or infirmity in the title of the person selling the property at the
time of purchase.
II. Petitioners are not purchasers in good faith, on the basis of the
Memorandum of Agreement dated April 12, 2011 and the Deed of
Absolute Sale dated June 30, 2011.
III. Respondent Juan Cruz Tolentino was the previous registered
owner of the land in dispute, thereby acting on oblivion to the fact
that the real property is essentially conjugal in nature.
IV. In failing to rule and rationalize that at least one-half of the subject
real property should belong to petitioners.
V. The litigated property must be awarded and returned m favour of
respondent Juan Cruz Tolentino in its entirety.
At bottom, the crux of the controversy is who, between Juan and
Spouses Carlos, has the better to right to claim ownership over the
subject property.
The Court's Ruling
The present controversy necessitates an inquiry into the facts. While,
as a general rule, factual issues are not within the province of this
Court, nonetheless, in light of the conflicting factual findings of the
two courts below, an examination of the facts obtaining in this case is
in order. 26
Juan and Mercedes appear to have been married before the
effectivity of the Family Code on August 3, 1988. There being no
indication that they have adopted a different property regime, the
presumption is that their property relations is governed by the regime
of conjugal partnership of gains.27 Article 119 of the Civil Code thus
provides:
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.
Likewise, 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:
Article 105. In case the future spouses agree in the marriage
settlements that the regime of conjugal partnership of gains shall
govern their property relations during marriage, the provisions in this
Chapter shall be of supplementary application.
The provisions of this Chapter shall also apply to conjugal partnerships
of gains already established between spouses before the effectivity of
this Code, without prejudice to vested rights already acquired in
accordance with the Civil Code or other laws, as provided in Article
256.
Since the subject property was acquired on March 17, 196728 during
the marriage of Juan and Mercedes, it formed part of their conjugal
partnership. 29 It follows then that Juan and Mercedes are the
absolute owners of their undivided one-half interest, respectively,
over the subject property.
Meanwhile, as in any other property relations between husband and
wife, the conjugal partnership is terminated upon the death of either
of the spouses.30 In respondent Juan's Comment filed before the
Court, the Verification which he executed on February 9, 2018 states
that he is already a widower. Hence, the Court takes due notice of the
fact of Mercedes' death which inevitably results in the dissolution of
the conjugal partnership.
In retrospect, as absolute owners of the subject property then
covered by TCT No. RT-90746 (116229), Juan and Mercedes may
validly exercise rights of ownership by executing deeds which transfer
title thereto such as, in this case, the Deed of Donation dated
February 15, 2011 in favor of their grandson, Kristoff.
With regard to Juan's consent to the afore-stated donation, the RTC,
however, found that such was lacking since his signature therein was
forged. Notably, the CA did not overturn such finding, and in fact, no
longer touched upon the issue of forgery. On the other hand, it must
be pointed out that the signature of Mercedes in the Deed of
Donation was never contested and is, therefore, deemed admitted.
In Arrogante v. Deliarte,31 We ruled that a deed of sale of the subject
lot therein executed by the Deliarte siblings in favor of their brother,
respondent Beethoven Deliarte (Beethoven), was void for being a
conveyance of future inheritance. Nonetheless, the provisions in the
written agreement and the Deliarte siblings' signature thereon are
equivalent to an express waiver of all their rights and interests. Thus,
the Court upheld the quieting of title in favor of respondent
Beethoven after finding that the deed of sale, albeit void, evidenced
the consent and acquiescence of each Deliarte sibling to said
transaction.
In the present case, while it has been settled that the congruence of
the wills of the spouses is essential for the valid disposition of conjugal
property, 32 it cannot be ignored that Mercedes' consent to the
disposition of her one-half interest in the subject property remained
undisputed. It is apparent that Mercedes, during her lifetime,
relinquished all her rights thereon in favor of her grandson, Kristoff.
Furthermore, Mercedes' knowledge of and acquiescence to the
subsequent sale of the subject property to Spouses Carlos is
evidenced by her signature appearing in the MOA 33 dated April 12,
2011 and the Deed of Absolute Sale34dated September 12, 2011. We
are also mindful of the fact that Spouses Carlos had already paid a
valuable consideration in the amount of Two Million Three Hundred
Thousand Pesos (P2,300,000.00) for the subject property before
Juan's adverse claim was annotated on Kristoff s title. The said
purchase and acquisition for valuable consideration deserves a
certain degree of legal protection.
Given the foregoing, the Court is disinclined to rule that the Deed of
Donation is wholly void ab initio and that the Spouses Carlos should
be totally stripped of their right over the subject property. In
consonance with justice and equity, We deem it proper to uphold the
validity of the Deed of Donation dated February 15, 2011 but only to
the extent of Mercedes' one half share in the subject property. And
rightly so, because why invalidate Mercedes' disposition of her one-
half portion of the conjugal property that will eventually be her share
after the termination of the conjugal partnership? It will practically be
absurd, especially in the instant case, since the conjugal partnership
had already been terminated upon Mercedes' death.
Accordingly, the right of Kristoff, as donee, is limited only to the one-
half undivided portion that Mercedes owned.1âwphi1The Deed of
Donation insofar as it covered the remaining one-half undivided
portion of the subject property is null and void, Juan not having
consented to the donation of his undivided half.
Upon the foregoing perspective, Spouses Carlos' right, as vendees in
the subsequent sale of the subject property, is confined only to the
one-half undivided portion thereof. The other undivided half still
belongs to Juan. As owners pro indiviso of a portion of the lot in
question, either Spouses Carlos or Juan may ask for the partition of
the lot and their property rights shall be limited to the portion which
may be allotted to them in the division upon the termination of the
co-ownership.35 This disposition is in line with the well established
principle that the binding force of a contract must be recognized as
far as it is legally possible to do so-quando res non valet ut ago, valeat
quantum vale re potest. 36
Lastly, as a matter of fairness and in line with the principle that no
person should unjustly enrich himself at the expense of
another, 37 Kristoff should be liable to reimburse Spouses Carlos of
the amount corresponding to one-half of the purchase price of the
subject property.
WHEREFORE, in view of the foregoing, the petition is PARTIALLY
GRANTED. The donation and subsequent sale of the subject property
is declared NULL and VOID with respect to the undivided 1/2 portion
owned by Juan Cruz Tolentino, but VALID with respect to the other
undivided 1/2 portion belonging to Mercedes Tolentino. Accordingly,
petitioners Spouses Carlos and respondent Juan Cruz Tolentino are
hereby declared as co-owners of the subject property. The Register of
Deeds of Quezon City is ordered to cancel TCT No. 004-2011013502
and to issue a new transfer certificate of title in the names of Julieta
B. Carlos, married to Fernando P. Carlos, and Juan Cruz Tolentino on
a 50-50 undivided interest in the lot.
We order Kristoff M. Tolentino to pay Spouses Carlos the amount of
One Million One Hundred Fifty Thousand Pesos (P1,150,000.00)
corresponding to one-half of the amount paid by Spouses Carlos for
the subject property, with legal interest at the rate of 6% computed
from the finality of this Decision.
SO ORDERED.