THIRD DIVISION levy of real properties registered in the names of Efren and Admittedly, the spouses were married
e names of Efren and Admittedly, the spouses were married before the effectivity of the
G.R. No. 164201 December 10, 2012
EFREN PANA, Petitioner,
vs.
HEIRS OF JOSE JUANITE, SR. and JOSE JUANITE, JR., Respondents.
DECISION
ABAD, J.:
This case is about the propriety of levy and execution on conjugal
properties where one of the spouses has been found guilty of a
crime and ordered to pay civil indemnities to the victims' heirs.
The Facts and the Case
The prosecution accused petitioner Efren Pana (Efren), his wife
Melecia, and others of murder before the. Regional Trial Court (RTC)
of Surigao City in Criminal Cases 4232 and 4233.1
On July 9, 1997 the RTC rendered a consolidated decision 2 acquitting
Efren of the charge for insufficiency of evidence but finding Melecia
and another person guilty as charged and sentenced them to the
penalty of death. The RTC ordered those found guilty to pay each of
the heirs of the victims, jointly and severally, P50,000.00 as civil
indemnity, P50,000.00 each as moral damages, and P150,000.00
actual damages.
On appeal to this Court, it affirmed on May 24, 2001 the conviction
of both accused but modified the penalty to reclusion perpetua.
With respect to the monetary awards, the Court also affirmed the
award of civil indemnity and moral damages but deleted the award
for actual damages for lack of evidentiary basis. In its place,
however, the Court made an award of P15,000.00 each by way of
temperate damages. In addition, the Court awarded P50,000.00
exemplary damages per victim to be paid solidarily by them. 3 The
decision became final and executory on October 1, 2001.4
Upon motion for execution by the heirs of the deceased, on March
12, 2002 the RTC ordered the issuance of the writ,5 resulting in the
Melecia.6 Subsequently, a notice of levy7 and a notice of sale on
execution8 were issued.
On April 3, 2002, petitioner Efren and his wife Melecia filed a
motion to quash the writ of execution, claiming that the levied
properties were conjugal assets, not paraphernal assets of
Melecia.9 On September 16, 2002 the RTC denied the motion.10 The
spouses moved for reconsideration but the RTC denied the same on
March 6, 2003.11
Claiming that the RTC gravely abused its discretion in issuing the
challenged orders, Efren filed a petition for certiorari before the
Court of Appeals (CA). On January 29, 2004 the CA dismissed the
petition for failure to sufficiently show that the RTC gravely abused
its discretion in issuing its assailed orders.12 It also denied Efren’s
motion for reconsideration,13 prompting him to file the present
petition for review on certiorari.
The Issue Presented
The sole issue presented in this case is whether or not the CA erred
in holding that the conjugal properties of spouses Efren and Melecia
can be levied and executed upon for the satisfaction of Melecia’s
civil liability in the murder case.
Ruling of the Court
To determine whether the obligation of the wife arising from her
criminal liability is chargeable against the properties of the
marriage, the Court has first to identify the spouses’ property
relations.
Efren claims that his marriage with Melecia falls under the regime of
conjugal partnership of gains, given that they were married prior to
the enactment of the Family Code and that they did not execute any
prenuptial agreement.14Although the heirs of the deceased victims
do not dispute that it was the Civil Code, not the Family Code, which
governed the marriage, they insist that it was the system of absolute
community of property that applied to Efren and Melecia. The
reasoning goes:
Family Code. But that fact does not prevent the application of [A]rt.
94, last paragraph, of the Family Code because their property
regime is precisely governed by the law on absolute community.
This finds support in Art. 256 of the Family Code which states:
"This code shall have retroactive effect in so far as it does not
prejudice or impair vested or acquired rights in accordance with the
Civil Code or other laws."
None of the spouses is dead. Therefore, no vested rights have been
acquired by each over the properties of the community. Hence, the
liabilities imposed on the accused-spouse may properly be charged
against the community as heretofore discussed. 15
The RTC applied the same reasoning as above. 16 Efren and Melecia’s
property relation was admittedly conjugal under the Civil Code but,
since the transitory provision of the Family Code gave its provisions
retroactive effect if no vested or acquired rights are impaired, that
property relation between the couple was changed when the Family
Code took effect in 1988. The latter code now prescribes in Article
75 absolute community of property for all marriages unless the
parties entered into a prenuptial agreement. As it happens, Efren
and Melecia had no prenuptial agreement. The CA agreed with this
position.17
Both the RTC and the CA are in error on this point. While it is true
that the personal stakes of each spouse in their conjugal assets are
inchoate or unclear prior to the liquidation of the conjugal
partnership of gains and, therefore, none of them can be said to
have acquired vested rights in specific assets, it is evident that
Article 256 of the Family Code does not intend to reach back and
automatically convert into absolute community of property relation
all conjugal partnerships of gains that existed before 1988 excepting
only those with prenuptial agreements.
The Family Code itself provides in Article 76 that marriage
settlements cannot be modified except prior to marriage.
Art. 76. In order that any modification in the marriage settlements
may be valid, it must be made before the celebration of the
marriage, subject to the provisions of Articles 66, 67, 128, 135 and
136.
Clearly, therefore, the conjugal partnership of gains that governed
the marriage between Efren and Melecia who were married prior to
1988 cannot be modified except before the celebration of that
marriage.
Post-marriage modification of such settlements can take place only
where: (a) the absolute community or conjugal partnership was
dissolved and liquidated upon a decree of legal separation; 18 (b) the
spouses who were legally separated reconciled and agreed to revive
their former property regime;19 (c) judicial separation of property
had been had on the ground that a spouse abandons the other
without just cause or fails to comply with his obligations to the
family;20 (d) there was judicial separation of property under Article
135; (e) the spouses jointly filed a petition for the voluntary
dissolution of their absolute community or conjugal partnership of
gains.21 None of these circumstances exists in the case of Efren and
Melecia.
What is more, under the conjugal partnership of gains established
by Article 142 of the Civil Code, the husband and the wife place only
the fruits of their separate property and incomes from their work or
industry in the common fund. Thus:
Art. 142. By means of the conjugal partnership of gains the husband
and wife place in a common fund the fruits of their separate
property and the income from their work or industry, and divide
equally, upon the dissolution of the marriage or of the partnership,
the net gains or benefits obtained indiscriminately by either spouse
during the marriage.
This means that they continue under such property regime to enjoy
rights of ownership over their separate properties. Consequently, to
automatically change the marriage settlements of couples who got
married under the Civil Code into absolute community of property
in 1988 when the Family Code took effect would be to impair their
acquired or vested rights to such separate properties.
The RTC cannot take advantage of the spouses’ loose admission that
absolute community of property governed their property relation
since the record shows that they had been insistent that their
property regime is one of conjugal partnership of gains. 22 No
evidence of a prenuptial agreement between them has been
presented.
What is clear is that Efren and Melecia were married when the Civil
Code was still the operative law on marriages. The presumption,
absent any evidence to the contrary, is that they were married
under the regime of the conjugal partnership of gains. Article 119 of
the Civil Code thus provides:
Art. 119. The future spouses may in the marriage settlements agree
upon absolute or relative community of property, or upon complete
separation of property, or upon any other regime. In the absence of
marriage settlements, or when the same are void, the system of
relative community or conjugal partnership of gains as established
in this Code, shall govern the property relations between husband
and wife.
Of course, the Family Code contains terms governing conjugal
partnership of gains that supersede the terms of the conjugal
partnership of gains under the Civil Code. Article 105 of the Family
Code states:
"x x x x
The provisions of this Chapter [on the Conjugal Partnership of Gains]
shall also apply to conjugal partnerships of gains already established
between spouses before the effectivity of this Code, without
prejudice to vested rights already acquired in accordance with the
Civil Code or other laws, as provided in Article 256."23
Consequently, the Court must refer to the Family Code provisions in
deciding whether or not the conjugal properties of Efren and
Melecia may be held to answer for the civil liabilities imposed on
Melecia in the murder case. Its Article 122 provides:
Art. 122. The payment of personal debts contracted by the husband
or the wife before or during the marriage shall not be charged to the
conjugal properties partnership except insofar as they redounded to
the benefit of the family.
Neither shall the fines and pecuniary indemnities imposed upon
them be charged to the partnership.
However, the payment of personal debts contracted by either
spouse before the marriage, that of fines and indemnities imposed
upon them, as well as the support of illegitimate children of either
spouse, may be enforced against the partnership assets after the
responsibilities enumerated in the preceding Article have been
covered, if the spouse who is bound should have no exclusive
property or if it should be insufficient; but at the time of the
liquidation of the partnership, such spouse shall be charged for what
has been paid for the purpose above-mentioned.
Since Efren does not dispute the RTC’s finding that Melecia has no
exclusive property of her own,24 the above applies. The civil
indemnity that the decision in the murder case imposed on her may
be enforced against their conjugal assets after the responsibilities
enumerated in Article 121 of the Family Code have been
covered.25 Those responsibilities are as follows:
Art. 121. The conjugal partnership shall be liable for:
(1) The support of the spouse, their common children, and
the legitimate children of either spouse; however, the
support of illegitimate children shall be governed by the
provisions of this Code on Support;
(2) All debts and obligations contracted during the marriage
by the designated administrator-spouse for the benefit of
the conjugal partnership of gains, or by both spouses or by
one of them with the consent of the other;
(3) Debts and obligations contracted by either spouse
without the consent of the other to the extent that the
family may have benefited;
(4) All taxes, liens, charges, and expenses, including major
or minor repairs upon the conjugal partnership property;
(5) All taxes and expenses for mere preservation made
during the marriage upon the separate property of either
spouse;
(6) Expenses to enable either spouse to commence or
complete a professional, vocational, or other activity for
self-improvement;
 (7) Antenuptial debts of either spouse insofar as they have
redounded to the benefit of the family;

(8) The value of what is donated or promised by both

spouses in favor of their common legitimate children for
the exclusive purpose of commencing or completing a
professional or vocational course or other activity for self-
improvement; and

(9) Expenses of litigation between the spouses unless the

suit is found to be groundless.

If the conjugal partnership is insufficient to cover the foregoing

liabilities, the spouses shall be solidarily liable for the unpaid
balance with their separate properties.1âwphi1

Contrary to Efren’s contention, Article 121 above allows payment of

the criminal indemnities imposed on his wife, Melecia, out of the
partnership assets even before these are liquidated. Indeed, it
states that such indemnities "may be enforced against the
partnership assets after the responsibilities enumerated in the
preceding article have been covered."[26] No prior liquidation of
those assets is required. This is not altogether unfair since Article
122 states that "at the time of liquidation of the partnership, such
[offending] spouse shall be charged for what has been paid for the
purposes above-mentioned."

WHEREFORE, the Court AFFIRMS with MODIFICATION the

Resolutions of the Court of Appeals in CA-G.R. SP 77198 dated
January 29, 2004 and May 14, 2004. The Regional Trial Court of
Surigao City, Branch 30, shall first ascertain that, in enforcing the
writ of execution on the conjugal properties of spouses Efren and
Melecia Pana for the satisfaction of the indemnities imposed by final
judgment on the latter accused in Criminal Cases 4232 and 4233,
the responsibilities enumerated in Article 121 of the Family Code
have been covered.

SO ORDERED.
SECOND DIVISION
G.R. No. 122134 October 3, 2003
ROMANA LOCQUIAO VALENCIA and CONSTANCIA L.
VALENCIA, petitioners,
vs.
BENITO A. LOCQUIAO, now deceased and substituted by JIMMY
LOCQUIAO, TOMASA MARA and the REGISTRAR OF DEEDS OF
PANGASINAN, respondents.
x----------------------------x
CONSTANCIA L. VALENCIA, petitioner,
vs.
BENITO A. LOCQUIAO, now deceased and substituted by JIMMY
LOCQUIAO, respondent.
DECISION
TINGA, J.:
The Old Civil Code1 and the Old Code of Civil Procedure,2 repealed
laws that they both are notwithstanding, have not abruptly become
mere quiescent items of legal history since their relevance do not
wear off for a long time. Verily, the old statutes proved to be
decisive in the adjudication of the case at bar.
Before us is a petition for review seeking to annul and set aside the
joint Decision3 dated November 24, 1994, as well as
the Resolution4 dated September 8, 1995, of the former Tenth
Division5 of the Court of Appeals in two consolidated cases involving
an action for annulment of title6 and an action for ejectment.7
Both cases involve a parcel of land consisting of 4,876 square meters
situated in Urdaneta, Pangasinan. This land was originally owned by
the spouses Herminigildo and Raymunda Locquiao, as evidenced
by Original Certificate of Title No. 183838 issued on October 3, 1917
by the Register of Deeds of Pangasinan.
On May 22, 1944, Herminigildo and Raymunda Locquiao executed a
deed of donation propter nuptias which was written in
the Ilocano dialect, denominated as Inventario Ti Sagut9 in favor of
their son, respondent Benito Locquiao (hereafter, respondent
Benito) and his prospective bride, respondent Tomasa Mara
(hereafter, respondent Tomasa). By the terms of the deed, the
donees were gifted with four (4) parcels of land, including the land
in question, as well as a male cow and one-third (1/3) portion of the
conjugal house of the donor parents, in consideration of the
impending marriage of the donees.
The donees took their marriage vows on June 4, 1944 and the fact of
their marriage was inscribed at the back of O.C.T. No. 18383.10
Herminigildo and Raymunda died on December 15, 1962 and
January 9, 1968, respectively, leaving as heirs their six (6) children,
namely: respondent Benito, Marciano, Lucio, Emeteria, Anastacia,
and petitioner Romana, all surnamed Locquiao11 . With the
permission of respondents Benito and Tomasa, petitioner Romana
Valencia (hereinafter, Romana) took possession and cultivated the
subject land.12 When respondent Romana’s husband got sick
sometime in 1977, her daughter petitioner Constancia Valencia
(hereafter, petitioner Constancia) took over, and since then, has
been in possession of the land.13
Meanwhile, respondents Benito and Tomasa registered
the Inventario Ti Sagut with the Office of the Register of Deeds of
Pangasinan on May 15, 1970.14 In due course, the original title was
cancelled and in lieu thereof Transfer Certificate of Title No.
8489715 was issued in the name of the respondents Benito and
Tomasa.
On March 18, 1973, the heirs of the Locquiao spouses, including
respondent Benito and petitioner Romana, executed a Deed of
Partition with Recognition of Rights,16 wherein they distributed
among only three (3) of them, the twelve (12) parcels of land left by
their common progenitors, excluding the land in question and other
lots disposed of by the Locquiao spouses earlier. Contained in the
deed is a statement that respondent Benito and Marciano Locquiao,
along with the heirs of Lucio Locquiao, "have already received our
shares in the estates of our parents, by virtue of previous donations
and conveyances," and that for that reason the heirs of Lucio
Locquaio were not made parties to the deed. All the living children
of the Locquaio spouses at the time, including petitioner Romana,
confirmed the previous dispositions and waived their rights to
whomsoever the properties covered by the deed of partition were
adjudicated.17
Later on, disagreements among five (5) heirs or groups of heirs,
including petitioner Romana, concerning the distribution of two (2)
of the lots covered by the deed of partition which are Lots No. 2467
and 5567 of the Urdaneta Cadastral Survey surfaced. As their
differences were settled, the heirs concerned executed a Deed of
Compromise Agreement18 on June 12, 1976, which provided for the
re-distribution of the two (2) lots. Although not directly involved in
the discord, Benito signed the compromise agreement together
with his feuding siblings, nephews and nieces. Significantly, all the
signatories to the compromise agreement, including petitioner
Romana, confirmed all the other stipulations and provisions of the
deed of partition.19
Sometime in 1983, the apparent calm pervading among the heirs
was disturbed when petitioner Constancia filed an action for
annulment of title against the respondents before the Regional Trial
Court of Pangasinan.20 The record shows that the case was
dismissed by the trial court but it does not indicate the reason for
the dismissal.21
On December 13, 1983, respondent Benito filed with the Municipal
Trial Court of Urdaneta, Pangasinan a Complaint22 seeking the
ejectment of petitioner Constancia from the subject property.
On November 25, 1985, the Municipal Trial Court rendered
a Decision,23 ordering the defendant in the case, petitioner
Constancia, to vacate the land in question.
Petitioners Romana and Constancia countered with
a Complaint24 for the annulment of Transfer Certificate of TitleNo.
84897 against respondents Benito and Tomasa 25 which they filed
with the Regional Trial Court of Pangasinan on December 23, 1985.
Petitioners alleged that the issuance of the transfer certificate of
title was fraudulent; that the Inventario Ti Sagut is spurious; that the
notary public who notarized the document had no authority to do
so, and; that the donation did not observe the form required by law
as there was no written acceptance on the document itself or in a
separate public instrument.1a\^/phi1.net
Meanwhile, the decision in the ejectment case was appealed to the
same RTC where the case for annulment of title was also pending.
Finding that the question of ownership was the central issue in both
cases, the court issued an Order26 suspending the proceedings in the
ejectment case until it shall have decided the ownership issue in the
title annulment case.
After trial, the RTC rendered a Decision27 dated January 30, 1989
dismissing the complaint for annulment of title on the grounds of
prescription and laches. It likewise ruled that the Inventario Ti
Sagut is a valid public document which transmitted ownership over
the subject land to the respondents. With the dismissal of the
complaint and the confirmation of the respondents’ title over the
subject property, the RTC affirmed in toto the decision of the MTC in
the ejectment case28 .
Dissatisfied, petitioners elevated the two (2) decisions to the
respondent Court of Appeals. Since they involve the same parties
and the same property, the appealed cases were consolidated by
the appellate court.
On November 24, 1994, the Court of Appeals rendered the
assailed Decision affirming the appealed RTC decisions. The
appellate court upheld the RTC’s conclusion that the petitioners’
cause of action had already prescribed, considering that the
complaint for annulment of title was filed more than fifteen (15)
years after the issuance of the title, or beyond the ten (10) - year
prescriptive period for actions for reconveyance. It likewise rejected
the petitioners’ assertion that the donation propter nuptias is null
and void for want of acceptance by the donee, positing that the
implied acceptance flowing from the very fact of marriage between
the respondents, coupled with the registration of the fact of
marriage at the back of OCT No. 18383, constitutes substantial
compliance with the requirements of the law.
The petitioners filed a Motion for Reconsideration29 but it was
denied by the appellate court in its Resolution30 dated September 8,
1995. Hence, this petition.
We find the petition entirely devoid of merit.
Concerning the annulment case, the issues to be threshed out are:
(1) whether the donation propter nuptias is authentic; (2) whether
acceptance of the donation by the donees is required; (3) if so, in
what form should the acceptance appear, and; (4) whether the
action is barred by prescription and laches.
The Inventario Ti Sagut which contains the donation propter
nuptias was executed and notarized on May 22, 1944. It was
presented to the Register of Deeds of Pangasinan for registration on
May 15, 1970. The photocopy of the document presented in
evidence as Exhibit "8" was reproduced from the original kept in the
Registry of Deeds of Pangasinan.31
The petitioners have launched a two-pronged attack against the
validity of the donation propter nuptias, to wit: first, the Inventario
Ti Sagut is not authentic; and second, even assuming that it is
authentic, it is void for the donee’s failure to accept the donation in
a public instrument.
To buttress their claim that the document was falsified, the
petitioners rely mainly on the Certification32 dated July 9, 1984 of
the Records Management and Archives Office that there was no
notarial record for the year 1944 of Cipriano V. Abenojar who
notarized the document on May 22, 1944 and that therefore a copy
of the document was not available.
The certification is not sufficient to prove the alleged inexistence or
spuriousness of the challenged document. The appellate court is
correct in pointing out that the mere absence of the notarial record
does not prove that the notary public does not have a valid notarial
commission and neither does the absence of a file copy of the
document with the archives effect evidence of the falsification of
the document.33 This Court ruled that the failure of the notary
public to furnish a copy of the deed to the appropriate office is a
ground for disciplining him, but certainly not for invalidating the
document or for setting aside the transaction therein involved.34
Moreover, the heirs of the Locquaio spouses, including petitioner
Romana, made reference in the deed of partition and the
compromise agreement to the previous donations made by the
spouses in favor of some of the heirs. As pointed out by the
RTC,35 respondent Benito was not allotted any share in the deed of
partition precisely because he received his share by virtue of
previous donations. His name was mentioned in the deed of
partition only with respect to the middle portion of Lot No. 2638
which is the eleventh (11th) parcel in the deed but that is the same
one-third (1/3) portion of Lot No. 2638 covered by O.C.T. No. 18259
included in the donation propter nuptias.1awphi1.nétSimilarly,
Marciano Locquiao and the heirs of Lucio Locquiao were not
allocated any more share in the deed of partition since they
received theirs by virtue of prior donations or conveyances.
The pertinent provisions of the deed of partition read:
…
That the heirs of Lucio Locquiao are not included in this Partition by
reason of the fact that in the same manner as we, BENITO and
MARCIANO LOCQUIAO are concerned, we have already received
our shares in the estate of our parents by virtue of previous
donations and conveyances, and that we hereby confirm said
dispositions, waiving our rights to whomsoever will these
properties will now be adjudicated;
…
That we, the Parties herein, do hereby waive and renounce as
against each other any claim or claims that we may have against one
or some of us, and that we recognize the rights of ownership of our
co-heirs with respect to those parcels already distributed and
adjudicated and that in the event that one of us is cultivating or in
possession of any one of the parcels of land already adjudicated in
favor of another heir or has been conveyed, donated or disposed of
previously, in favor of another heir, we do hereby renounce and
waive our right of possession in favor of the heir in whose favor the
donation or conveyance was made previously.36 (Emphasis supplied)
The exclusion of the subject property in the deed of partition dispels
any doubt as to the authenticity of the earlier Inventario Ti Sagut.
This brings us to the admissibility of the Deed of Partition with
Recognition of Rights, marked as Exhibit "2", and the Deed of
Compromise Agreement, marked as Exhibit "3".
The petitioners fault the RTC for admitting in evidence the deed of
partition and the compromise agreement on the pretext that the
documents "were not properly submitted in evidence", pointing out
that "when presented to respondent Tomasa Mara for
identification, she simply stated that she knew about the documents
but she did not actually identify them."37
The argument is not tenable. Firstly, objection to the documentary
evidence must be made at the time it is formally offered. 38 Since the
petitioners did not even bother to object to the documents at the
time they were offered in evidence,39 it is now too late in the day for
them to question their admissibility. Secondly, the documents were
identified during the Pre-Trial, marked as Exhibits "2" and "3" and
testified on by respondent Tomasa. 40 Thirdly, the questioned deeds,
being public documents as they were duly notarized, are admissible
in evidence without further proof of their due execution and are
conclusive as to the truthfulness of their contents, in the absence of
clear and convincing evidence to the contrary.41 A public document
executed and attested through the intervention of the notary public
is evidence of the facts therein expressed in clear, unequivocal
manner.42
Concerning the issue of form, petitioners insist that based on a
provision43 of the Civil Code of Spain (Old Civil Code), the acceptance
by the donees should be made in a public instrument. This
argument was rejected by the RTC and the appellate court on the
theory that the implied acceptance of the donation had flowed from
the celebration of the marriage between the respondents, followed
by the registration of the fact of marriage at the back of OCT No.
18383.
The petitioners, the appellate court and the trial court all erred in
applying the requirements on ordinary donations to the present
case instead of the rules on donation propter nuptias. Underlying
the blunder is their failure to take into account the fundamental
dichotomy between the two kinds of donations.
Unlike ordinary donations, donations propter nuptias or donations
by reason of marriage are those "made before its celebration, in
consideration of the same and in favor of one or both of the future
spouses."44 The distinction is crucial because the two classes of
donations are not governed by exactly the same rules, especially as
regards the formal essential requisites.
Under the Old Civil Code, donations propter nuptias must be made
in a public instrument in which the property donated must be
specifically described.45 However, Article 1330 of the same Code
provides that "acceptance is not necessary to the validity of such
gifts". In other words, the celebration of the marriage between the
beneficiary couple, in tandem with compliance with the prescribed
form, was enough to effectuate the donation propter nuptias under
the Old Civil Code.
Under the New Civil Code, the rules are different. Article 127
thereof provides that the form of donations propter nuptias are
regulated by the Statute of Frauds. Article 1403, paragraph 2, which
contains the Statute of Frauds requires that the contracts
mentioned thereunder need be in writing only to be enforceable.
However, as provided in Article 129, express acceptance "is not
necessary for the validity of these donations." Thus, implied
acceptance is sufficient.
The pivotal question, therefore, is which formal requirements
should be applied with respect to the donation propter nuptias at
hand. Those under the Old Civil Code or the New Civil Code?
It is settled that only laws existing at the time of the execution of a
contract are applicable thereto and not later statutes, unless the
latter are specifically intended to have retroactive
effect.46 Consequently, it is the Old Civil Code which applies in this
case since the donation propter nuptias was executed in 1944 and
the New Civil Code took effect only on August 30, 1950. 47 The fact
that in 1944 the Philippines was still under Japanese occupation is of
no consequence. It is a well-known rule of the Law of Nations that
municipal laws, as contra-distinguished from laws of political nature,
are not abrogated by a change of sovereignty.48 This Court
specifically held that during the Japanese occupation period, the Old
Civil Code was in force.49 As a consequence, applying Article 1330 of
the Old Civil Code in the determination of the validity of the
questioned donation, it does not matter whether or not the donees
had accepted the donation. The validity of the donation is
unaffected in either case.
Even the petitioners agree that the Old Civil Code should be applied.
However, they invoked the wrong provisions50thereof.
Even if the provisions of the New Civil Code were to be applied, the
case of the petitioners would collapse just the same. As earlier
shown, even implied acceptance of a donation propter
nuptias suffices under the New Civil Code.51
With the genuineness of the donation propter nuptias and
compliance with the applicable mandatory form requirements fully
established, petitioners’ hypothesis that their action is
imprescriptible cannot take off.
Viewing petitioners’ action for reconveyance from whatever feasible
legal angle, it is definitely barred by prescription. Petitioners’ right
to file an action for the reconveyance of the land accrued in 1944,
when the Inventario Ti Sagut was executed. It must be remembered
that before the effectivity of the New Civil Code in 1950, the Old
Code of Civil Procedure (Act No. 190) governed prescription.52 Under
the Old Code of Civil Procedure, an action for recovery of the title
to, or possession of, real property, or an interest therein, can only
be brought within ten years after the cause of such action
accrues.53 Thus, petitioners’ action, which was filed on December
23, 1985, or more than forty (40) years from the execution of the
deed of donation on May 22, 1944, was clearly time-barred.
Even following petitioners’ theory that the prescriptive period
should commence from the time of discovery of the alleged fraud,
the conclusion would still be the same. As early as May 15, 1970,
when the deed of donation was registered and the transfer
certificate of title was issued, petitioners were considered to have
constructive knowledge of the alleged fraud, following the
jurisprudential rule that registration of a deed in the public real
estate registry is constructive notice to the whole world of its
contents, as well as all interests, legal and equitable, included
therein.54 As it is now settled that the prescriptive period for the
reconveyance of property allegedly registered through fraud is ten
(10) years, reckoned from the date of the issuance of the certificate
of title,55 the action filed on December 23, 1985 has clearly
prescribed.
In any event, independent of prescription, petitioners’ action is
dismissible on the ground of laches. The elements of laches are
present in this case, viz:
(1) conduct on the part of the defendant, or one under
whom he claims, giving rise to the situation that led to the
complaint and for which the complainant seeks a remedy;
 (2) delay in asserting the complainant’s rights, having had
knowledge or notice of defendant’s conduct and having
been afforded an opportunity to institute a suit;

(3) lack of knowledge or notice on the part of the

defendant that the complainant would assert the right on
which he bases his suit, and

(4) injury or prejudice to the defendant in the event relief is

accorded to the complainant, or the suit is not held
barred.56

Of the facts which support the finding of laches, stress should be

made of the following: (a) the petitioners Romana unquestionably
gained actual knowledge of the donation propter nuptias when the
deed of partition was executed in 1973 and the information must
have surfaced again when the compromise agreement was forged in
1976, and; (b) as petitioner Romana was a party-signatory to the
two documents, she definitely had the opportunity to question the
donation propter nuptias on both occasions, and she should have
done so if she were of the mindset, given the fact that she was still
in possession of the land in dispute at the time. But she did not
make any move. She tarried for eleven (11) more years from the
execution of the deed of partition until she, together with petitioner
Constancia, filed the annulment case in 1985.

Anent the ejectment case, we find the issues raised by the

petitioners to be factual and, therefore, beyond this Court’s power
of review. Not being a trier of facts, the Court is not tasked to go
over the proofs presented by the parties and analyze, assess, and
weigh them to ascertain if the trial court and the appellate court
were correct in according them superior credit in this or that piece
of evidence of one party or the other.57 In any event, implicit in the
affirmance of the Court of Appeals is the existence of substantial
evidence supporting the decisions of the courts below.

WHEREFORE, finding no reversible error in the assailed decision, the

same is hereby AFFIRMED.

Costs against petitioners.

SO ORDERED.
SECOND DIVISION
G.R. No. 146683 November 22, 2001
CIRILA ARCABA, petitioner,
vs.
ERLINDA TABANCURA VDA. DE BATOCAEL, SEIGFREDO C.
TABANCURA, DORIS C. TABANCURA, LUZELLI C. TABANCURA,
BELEN C. TABANCURA, RAUL A. COMILLE, BERNADETTE A.
COMILLE, and ABNER A. COMILLE, respondents.
MENDOZA, J.:
Petitioner Cirila Arcaba seeks review on certiorari of the decision 1 of
the Court of Appeals, which affirmed with modification the
decision2 of the Regional Trial Court, Branch 10, Dipolog City,
Zamboanga del Norte in Civil Case No. 4593, declaring as void a
deed of donation inter vivos executed by the late Francisco T.
Comille in her favor and its subsequent resolution 3 denying
reconsideration.
The facts are as follows:
On January 16, 1956, Francisco Comille and his wife Zosima
Montallana became the registered owners of Lot No. 437-A located
at the corner of Calle Santa Rosa (now Balintawak Street) and Calle
Rosario (now Rizal Avenue) in Dipolog City, Zamboanga del Norte.
The total area of the lot was 418 square meters. 4 After the death of
Zosima on October 3, 1980, Francisco and his mother-in-law, Juliana
Bustalino Montallana, executed a deed of extrajudicial partition
with waiver of rights, in which the latter waived her share consisting
of one-fourth (1/4) of the property to Francisco.5 On June 27, 1916,
Francisco registered the lot in his name with the Registry of Deeds. 6
Having no children to take care of him after his retirement,
Francisco asked his niece Leticia Bellosillo,7 the latter's cousin,
Luzviminda Paghacian,8 and petitioner Cirila Arcaba, then a widow,
to take care of his house, as well as the store inside.9
Conflicting testimonies were offered as to the nature of the
relationship between Cirila and Francisco. Leticia Bellosillo said
Francisco and Cirila were lovers since they slept in the same
room,10 while Erlinda Tabancura,11another niece of Francisco,
claimed that the latter had told her that Cirila was his mistress. 12 On
the other hand, Cirila said she was a mere helper who could enter
the master's bedroom only when the old man asked her to and that
Francisco in any case was too old for her. She denied they ever had
sexual intercourse.13
It appears that when Leticia and Luzviminda were married, only
Cirila was left to take care of Francisco. 14 Cirila testified that she was
a 34-year old widow while Francisco was a 75-year old widower
when she began working for the latter; that he could still walk with
her assistance at that time;15 and that his health eventually
deteriorated and he became bedridden.16 Erlinda Tabancura
testified that Francisco's sole source of income consisted of rentals
from his lot near the public streets. 17 He did not pay Cirila a regular
cash wage as a househelper , though he provided her family with
food and lodging.18
On January 24, 1991, a few months before his death, Francisco
executed an instrument denominated "Deed of Donation Inter
Vivos," in which he ceded a portion of Lot 437-A, consisting of 150
square meters, together with his house, to Cirila, who accepted the
donation in the same instrument. Francisco left the larger portion of
268 square meters in his name. The deed stated that the donation
was being made in consideration of "the faithful services [Cirila
Arcaba] had rendered over the past ten (10) years." The deed was
notarized by Atty. Vic T. Lacaya, Sr.19 and later registered by Cirila as
its absolute owner .20
On October 4, 1991, Francisco died without any children. In 1993,
the lot which Cirila received from Francisco had a market value of
P57,105.00 and an assessed value of P28,550.00.21
On February 18, 1993, respondents filed a complaint against
petitioner 'for declaration of nullity of a deed of donation inter
vivos, recovery of possession, and damages. Respondents, who are
the decedent's nephews and nieces and his heirs by intestate
succession, alleged that Cirila was the common-law wife of
Francisco and the donation inter vivos made by Francisco in her
favor is void under Article 87 of the Family Code, which provides:
Every donation or grant of gratuitous advantage, direct or
indirect, between the spouses during the marriage shall be
void, except moderate gifts which the spouses may give
each other on the occasion of any family rejoicing. The
prohibition shall also apply to persons living together as
husband and wife without a valid marriage.
On February 25, 1999, the trial court rendered judgment in favor of
respondents, holding the donation void under this provision of the
Family Code. The trial court reached this conclusion based on the
testimony of Erlinda Tabancura and certain documents bearing the
signature of one "Cirila Comille." The documents were (1) an
application for a business permit to operate as real estate lessor,
dated January 8, 1991, with a carbon copy of the signature "Cirila
Comille";22 (2) a sanitary permit to operate as real estate lessor with
a health certificate showing the signature "Cirila Comille" in black
ink;23 and (3) the death certificate of the decedent with the
signature "Cirila A. Comille" written in black ink.24 The dispositive
portion of the trial court's decision states:
WHEREFORE, in view of the foregoing, judgment is
rendered:
1. Declaring the Deed of Donation Inter Vivos executed by
the late Francisco Comille recorded as Doc. No. 7; Page No.
3; Book No. V; Series of 1991 in the Notarial Register of
Notary Public Vic T. Lacaya (Annex " A " to the Complaint)
null and void;
2. Ordering the defendant to deliver possession of the
house and lot subject of the deed unto the plaintiffs within
thirty (30) days after finality of this decision; and finally
3. Ordering the defendant to pay attorney's fees in the sum
of P10,000.00.
SO ORDERED.25
Petitioner appealed to the Court of Appeals, which rendered on
June 19, 2000 the decision subject of this appeal. As already stated,
the appeals court denied reconsideration. Its conclusion was based
on (1) the testimonies of Leticia, Erlinda, and Cirila; (2) the copies of
documents purportedly showing Cirila's use of Francisco's surname;
(3) a pleading in another civil case mentioning payment of rentals to
Cirila as Francisco's common-law wife; and (4) the fact that Cirila did
not receive a regular cash wage.
Petitioner assigns the following errors as having been committed by
the Court of Appeals:
(a) The judgment of the Court of Appeals that petitioner
was the common-law wife of the late Francisco Comille is
not correct and is a reversible error because it is based on a
misapprehension of facts, and unduly breaks the chain of
circumstances detailed by the totality of the evidence, its
findings being predicated on totally incompetent or
hearsay evidence, and grounded on mere speculation,
conjecture or possibility. (Salazar v. Gutierrez, 33 SCRA 243
and other cases; cited in Quiason, Philippine Courts and
their J urisdictions, 1993 ed., p. 604)
(b) The Court of Appeals erred in shifting the burden of
evidence from the plaintiff to defendant. (Bunyi v. Reyes,
39 SCRA 504; Quiason, id.)
(c) The Court of Appeals decided the case in away probably
not in accord with law or with the applicable jurisprudence
in Rodriguez v. Rodriguez, 20 SCRA 908, and Liguez v. CA,
102 Phil. 577, 584.26
The issue in this case is whether the Court of Appeals correctly
applied Art. 87 of the Family Code to the circumstances of this case.
After a review of the records, we rule in the affirmative.
The general rule is that only questions of law may be raised in a
petition for review under Rule 45 of the Rules of Court, subject only
to certain exceptions: (a) when the conclusion is a finding grounded
entirely on speculations, surmises, or conjectures; (b) when the
inference made is manifestly mistaken, absurd, or impossible; (c)
where there is grave abuse of discretion; (d) when the judgment is
based on a misapprehension of facts; (e) when the findings of fact
are conflicting; (f) when the Court of Appeals, in making its findings,
went beyond the issues of the case and the same are contrary to the
admissions of both appellant and appellee; (g) when the findings of
the Court of Appeals are contrary to those of the trial court; (h)
when the findings of fact are conclusions without citation of specific
evidence on which they are based; (i) when the finding of fact of the
Court of Appeals is premised on the supposed absence of evidence
but is contradicted by the evidence on record; and G) when the
Court of Appeals manifestly overlooked certain relevant facts not
disputed by the parties and which, if properly considered, would demand from Francisco a regular cash wage is an indication that she
justify a different conclusion.27 It appearing that the Court of was not simply a caregiver-employee, but Francisco's common law
Appeals based its findings on evidence presented by both parties, spouse. She was, after all, entitled to a regular cash wage under the
the general rule should apply. law.36 It is difficult to believe that she stayed with Francisco and
served him out of pure beneficence. Human reason would thus lead
In Bitangcor v. Tan,28 we held that the term "cohabitation" or "living to the conclusion that she was Francisco's common-law spouse.
together as husband and wife" means not only residing under one
roof, but also having repeated sexual intercourse. Cohabitation, of Respondents having proven by a preponderance of evidence that
course, means more than sexual intercourse, especially when one of Cirila and Francisco lived together as husband and wife without a
the parties is already old and may no longer be interested in sex. At valid marriage, the inescapable conclusion is that the donation
the very least, cohabitation is public assumption by a man and a made by Francisco in favor of Cirila is void under Art. 87 of the
woman of the marital relation, and dwelling together as man and Family Code.1âwphi1.nêt
wife, thereby holding themselves out to the public as such. Secret
meetings or nights clandestinely spent together, even if often WHEREFORE, the decision of the Court of Appeals affirming the
repeated, do not constitute such kind of cohabitation; they are decision of the trial court is hereby AFFIRMED.
merely meretricious.29 In this jurisdiction, this Court has considered
as sufficient proof of common-law relationship the stipulations SO ORDERED.
between the parties,30 a conviction of concubinage,31 or the
existence of legitimate children.32
Bellosillo, Quisumbing, Buena, De Leon, Jr., JJ., concur.
Was Cirila Francisco's employee or his common-law wife? Cirila
admitted that she and Francisco resided under one roof for a long
time, It is very possible that the two consummated their
relationship, since Cirila gave Francisco therapeutic massage and
Leticia said they slept in the same bedroom. At the very least, their
public conduct indicated that theirs was not just a relationship of
caregiver and patient, but that of exclusive partners akin to husband
and wife.
Aside from Erlinda Tabancura's testimony that her uncle told her
that Cirila was his mistress, there are other indications that Cirila
and Francisco were common-law spouses. Seigfredo Tabancura
presented documents apparently signed by Cirila using the surname
"Comille." As previously stated, these are an application for a
business permit to operate as a real estate lessor,33 a sanitary
permit to operate as real estate lessor with a health
certificate,34 and the death certificate of Francisco.35 These
documents show that Cirila saw herself as Francisco's common-law
wife, otherwise, she would not have used his last name. Similarly, in
the answer filed by Francisco's lessees in "Erlinda Tabancura, et al.
vs. Gracia Adriatico Sy and Antonio Sy," RTC Civil Case No.4719 (for
collection of rentals), these lessees referred to Cirila as "the
common-law spouse of Francisco." Finally, the fact that Cirila did not
THIRD DIVISION
G.R. No. 193038, March 11, 2015
JOSEFINA V. NOBLEZA, Petitioner, v. SHIRLEY B.
NUEGA, Respondent.
DECISION
VILLARAMA, JR., J.:
At bar is a petition for review on certiorari of the Decision 1 dated
May 14, 2010 and the Resolution2 dated July 21, 2010 of the Court
of Appeals (CA) in CA-G.R. CV No. 70235, which affirmed with
modification the assailed Decision3 dated February 14, 2001 of the
Regional Trial Court (RTC) of Marikina City, Branch 273, in Civil Case
No. 96-274-MK.
The following facts are found by the trial court and affirmed by the
appellate court:
Respondent Shirley B. Nuega (Shirley) was married to Rogelio A.
Nuega (Rogelio) on September 1, 1990.4 Sometime in 1988 when
the parties were still engaged, Shirley was working as a domestic
helper in Israel. Upon the request of Rogelio, Shirley sent him
money5 for the purchase of a residential lot in Marikina where they
had planned to eventually build their home. Rogelio was then also
working abroad as a seaman. The following year, or on September
13, 1989, Rogelio purchased the subject house and lot for One
Hundred Two Thousand Pesos (P102,000.00)6 from Rodeanna Realty
Corporation. The subject property has an aggregate area of one
hundred eleven square meters (111 sq. m.) covered by Transfer
Certificate of Title (TCT) No. N-133844.7 Shirley claims that upon her
arrival in the Philippines sometime in 1989, she settled the balance
for the equity over the subject property with the developer through
SSS8financing. She likewise paid for the succeeding monthly
amortizations. On October 19, 1989, TCT No. 1719639 over the
subject property was issued by the Registry of Deeds of Marikina,
Rizal solely under the name of Rogelio.
On September 1, 1990, Shirley and Rogelio got married and lived in
the subject property. The following year, Shirley returned to Israel
for work. While overseas, she received information that Rogelio had
brought home another woman, Monica Escobar, into the family
home. She also learned, and was able to confirm upon her return to
the Philippines in May 1992, that Rogelio had been introducing
Escobar as his wife.
In June 1992, Shirley filed two cases against Rogelio: one for
Concubinage before the Provincial Prosecution Office of Rizal, and
another for Legal Separation and Liquidation of Property before the
RTC of Pasig City. Shirley later withdrew the complaint for legal
separation and liquidation of property, but re-filed10 the same on
January 29, 1993. In between the filing of these cases, Shirley
learned that Rogelio had the intention of selling the subject
property. Shirley then advised the interested buyers - one of whom
was their neighbor and petitioner Josefina V. Nobleza (petitioner) -
of the existence of the cases that she had filed against Rogelio and
cautioned them against buying the subject property until the cases
are closed and terminated. Nonetheless, under a Deed of Absolute
Sale11 dated December 29, 1992, Rogelio sold the subject property
to petitioner without Shirley's consent in the amount of Three
Hundred Eighty Thousand Pesos (P380,000.00), including
petitioner's undertaking to assume the existing mortgage on the
property with the National Home Mortgage Finance Corporation
and to pay the real property taxes due thereon.
Meanwhile, in a Decision12 dated May 16, 1994, the RTC of Pasig
City, Branch 70, granted the petition for legal separation and
ordered the dissolution and liquidation of the regime of absolute
community of property between Shirley and
Rogelio, viz.:chanroblesvirtuallawlibrary
WHEREFORE, in view of the foregoing, the Court hereby grants the
instant petition for legal separation between the subject spouses
with all its legal effects as provided for in Art. 63 of the Family Code.
Their community property is consequently dissolved and must be
liquidated in accordance with Art. 102 of the New Family Code. The
respondent is thus hereby enjoined from selling, encumbering or in
any way disposing or alienating any of their community property
including the subject house and lot before the required liquidation.
Moreover, he, being the guilty spouse, must forfeit the net profits of
the community property in favor of the petitioner who is the
innocent spouse pursuant to Art. 43 of the aforesaid law. Finally, in
the light of the claim of ownership by the present occupants who
have not been impleaded in the instant case, a separate action must
be instituted by the petitioner against the alleged buyer or buyers
thereof to determine their respective rights thereon.
Let a copy of this decision be furnished the Local Civil Registrar of
Manila, the Register of Deeds of Marikina, Metro Manila and the
National Statistics Office (NSO), sta. Mesa, Manila.
SO ORDERED.13cralawlawlibrary
Rogelio appealed the above-quoted ruling before the CA which
denied due course and dismissed the petition. It became final and
executory and a writ of execution was issued in August 1995.14
On August 27, 1996, Shirley instituted a Complaint 15 for Rescission
of Sale and Recoveiy of Property against petitioner and Rogelio
before the RTC of Marikina City, Branch 273. After trial on the
merits, the trial court rendered its decision on February 14,
2001, viz.:chanroblesvirtuallawlibrary
WHEREFORE, foregoing premises considered, judgment is hereby
rendered in favor of plaintiff Shirley Nuega and against defendant
Josefina Nobleza, as follows:
1) the Deed of Absolute Sale dated December 29, 1992 insofar as
the 55.05 square meters representing the one half (1/2) portion
of plaintiff Shirley Nuega is concerned, is hereby ordered
rescinded, the same being null and void;
2) defendant Josefina Nobleza is ordered to reconvey said 55.05
square meters to plaintiff Shirley Nuega, or in the alternative to
pay plaintiff Shirley Nuega the present market value of said
55.05 square meters; and
3) to pay plaintiff Shirley Nuega attorney's fees in the sum of
Twenty Thousand Pesos (P20,000.00).
For lack of merit, defendant's counterclaim is hereby DENIED.
SO ORDERED.16
Petitioner sought recourse with the CA, while Rogelio did not appeal
the ruling of the trial court. In its assailed Decision promulgated on
May 14, 2010, the appellate court affirmed with modification the
trial court's ruling, viz.:chanroblesvirtuallawlibrary
WHEREFORE, subject to the foregoing disquisition, the appeal
is DENIED. The Decision dated 14 February 2001 of the Regional
Trial Court of Marikina City, Branch 273 in Civil Case No. 96-274-
MK is AFFIRMED with MODIFICATION in that the Deed of Absolute
Sale dated 29 December 1992 is hereby declared null and void in its
entirety, and defendant-appellant Josefina V. Nobleza is ordered to
reconvey the entire subject property to plaintiff-appellee Shirley B.
Nuega and defendant Rogelio Nuega, without prejudice to said
defendant-appellant's right to recover from defendant Rogelio
whatever amount she paid for the subject property. Costs against
defendant-appellant Nobleza.
SO ORDERED.17cralawlawlibrary
Petitioner moved for reconsideration. In a Resolution dated July 21,
2010, the appellate court denied the motion for lack of merit.
Hence, this petition raising the following assignment of
errors:chanroblesvirtuallawlibrary
[I.] THE HONORABLE COURT OF APPEALS ERRED WHEN IT AFFIRMED
THE DECISION OF THE REGIONAL TRIAL COURT BY SUSTAINING
THE FINDING THAT PETITIONER WAS NOT A PURCHASER IN
GOOD FAITH.
[II.] THE HONORABLE COURT OF APPEALS ERRED WHEN IT MODIFIED
THE DECISION OF THE REGIONAL TRIAL COURT BY DECLARING AS
NULL AND VOID THE DEED OF ABSOLUTE SALE DATED 29
DECEMBER 1992 IN ITS ENTIRETY.18
We deny the petition.
Petitioner is not a buyer in good faith.
An innocent purchaser for value is one who buys the property of
another, without notice that some other person has a right or
interest in the property, for which a full and fair price is paid by the
buyer at the time of the purchase or before receipt of any notice of
claims or interest of some other person in the property. 19 It is the
party who claims to be an innocent purchaser for value who has the
burden of proving such assertion, and it is not enough to invoke the
ordinary presumption of good faith.20 To successfully invoke and be
considered as a buyer in good faith, the presumption is that first and
foremost, the "buyer in good faith" must have shown prudence and
due diligence in the exercise of his/her rights. It presupposes that
the buyer did everything that an ordinary person would do for the
protection and defense of his/her rights and interests against
prejudicial or injurious concerns when placed in such a situation.
The prudence required of a buyer in good faith is "not that of a
person with training in law, but rather that of an average man who
'weighs facts and circumstances without resorting to the calibration
of our technical rules of evidence of which his knowledge is nil.'" 21 A
buyer in good faith does his homework and verifies that the
particulars are in order such as the title, the parties, the mode of
transfer and the provisions in the deed/contract of sale, to name a
few. To be more specific, such prudence can be shown by making an
ocular inspection of the property, checking the title/ownership with
the proper Register of Deeds alongside the payment of taxes
therefor, or inquiring into the minutiae such as the parameters or
lot area, the type of ownership, and the capacity of the seller to
dispose of the property, which capacity necessarily includes an
inquiry into the civil status of the seller to ensure that if married,
marital consent is secured when necessary. In fine, for a purchaser
of a property in the possession of another to be in good faith, he
must exercise due diligence, conduct an investigation, and weigh
the surrounding facts and circumstances like what any prudent man
in a similar situation would do.22
In the case at bar, petitioner claims that she is a buyer in good faith
of the subject property which is titled under the name of the seller
Rogelio A. Nuega alone as evidenced by TCT No. 171963 and Tax
Declaration Nos. D-012-04723 and D-012-04724.23 Petitioner argues,
among others, that since she has examined the TCT over the subject
property and found the property to have been registered under the
name of seller Rogelio alone, she is an innocent purchaser for value
and "she is not required to go beyond the face of the title in
verifying the status of the subject property at the time of the
consummation of the sale and at the date of the sale." 24
We disagree with petitioner.
A buyer cannot claim to be an innocent purchaser for value by
merely relying on the TCT of the seller while ignoring all the other
surrounding circumstances relevant to the sale.
In the case of Spouses Raymundo v. Spouses Bandong,25 petitioners
therein - as does petitioner herein - were also harping that due to
the indefeasibility of a Torrens title, there was nothing in the TCT of
the property in litigation that should have aroused the buyer's
suspicion as to put her on guard that there was a defect in the title
of therein seller. The Court held in the Spouses Raymundo case that
the buyer therein could not hide behind the cloak of being an
innocent purchaser for value by merely relying on the TCT which
showed that the registered owner of the land purchased is the
seller. The Court ruled in this case that the buyer was not an
innocent purchaser for value due to the following attendant
circumstances, viz.:chanroblesvirtuallawlibrary
In the present case, we are not convinced by the petitioners'
incessant assertion that Jocelyn is an innocent purchaser for value.
To begin with, she is a grandniece of Eulalia and resides in the same
locality where the latter lives and conducts her principal business. It
is therefore impossible for her not to acquire knowledge of her
grand aunt's business practice of requiring her biyaheros to
surrender the titles to their properties and to sign the
corresponding deeds of sale over said properties in her favor, as
security. This alone should have put Jocelyn on guard for any
possible abuses that Eulalia may commit with the titles and the
deeds of sale in her possession.26cralawlawlibrary
Similarly, in the case of Arrofo v. Qui�o,27 the Court held that while
"the law does not require a person dealing with registered land to
inquire further than what the Torrens Title on its face indicates," the
rule is not absolute.28 Thus, finding that the buyer therein failed to
take the necessary precaution required of a prudent man, the Court
held that Arrofo was not an innocent purchaser for
value, viz.:chanroblesvirtuallawlibrary
In the present case, the records show that Arrofo failed to act as a
prudent buyer. True, she asked her daughter to verify from the
Register of Deeds if the title to the Property is free from
encumbrances. However, Arrofo admitted that the Property is
within the neighborhood and that she conducted an ocular
inspection of the Property. She saw the house constructed on the
Property. Yet, Arrofo did not even bother to inquire about the
occupants of the house. Arrofo also admitted that at the time of the
sale, Myrna was occupying a room in her house as her lessee. The
fact that Myrna was renting a room from Arrofo yet selling a land
with a house should have put Arrofo on her guard. She knew that
Myrna was not occupying the house. Hence, someone else must
have been occupying the house.
Thus, Arrofo should have inquired who occupied the house, and if a
lessee, who received the rentals from such lessee. Such inquiry
would have led Arrofo to discover that the lessee was paying rentals
to Quino, not to Renato and Myrna, who claimed to own the
Property.29cralawlawlibrary
An analogous situation obtains in the case at bar.
The TCT of the subject property states that its sole owner is the
seller Rogelio himself who was therein also described as "single".
However, as in the cases of Spouses Raymundo and Arrofo, there are
circumstances critical to the case at bar which convince us to affirm
the ruling of both the appellate and lower courts that herein
petitioner is not a buyer in good faith.
First, petitioner's sister Hilda Bautista, at the time of the sale, was
residing near Rogelio and Shirley's house - the subject property - in
Ladislao Diwa Village, Marikina City. Had petitioner been more
prudent as a buyer, she could have easily checked if Rogelio had the
capacity to dispose of the subject property. Had petitioner been
more vigilant, she could have inquired with such facility -
considering that her sister lived in the same Ladislao Diwa Village
where the property is located - if there was any person other than
Rogelio who had any right or interest in the subject property.
To be sure, respondent even testified that she had warned their
neighbors at Ladislao Diwa Village - including petitioner's sister - not
to engage in any deal with Rogelio relative to the purchase of the
subject property because of the cases she had filed against Rogelio.
Petitioner denies that respondent had given such warning to her
neighbors, which includes her sister, therefore arguing that such
warning could not be construed as "notice" on her part that there is
a person other than the seller himself who has any right or interest
in the subject property. Nonetheless, despite petitioner's adamant
denial, both courts a quo gave probative value to the testimony of
respondent, and the instant petition failed to present any
convincing evidence for this Court to reverse such factual finding. To
be sure, it is not within our province to second-guess the courts a
quo, and the re-determination of this factual issue is beyond the
reach of a petition for review on certiorari where only questions of
law may be reviewed.30
Second, issues surrounding the execution of the Deed of Absolute
Sale also pose question on the claim of petitioner that she is a buyer
in good faith. As correctly observed by both courts a quo, the Deed
of Absolute Sale was executed and dated on December 29, 1992.
However, the Community Tax Certificates of the witnesses therein
were dated January 2 and 20, 1993. 31 While this irregularity is not a
direct proof of the intent of the parties to the sale to make it appear
that the Deed of Absolute Sale was executed on December 29, 1992
- or before Shirley filed the petition for legal separation on January
29, 1993 - it is circumstantial and relevant to the claim of herein
petitioner as an innocent purchaser for value.
That is not all.
In the Deed of Absolute Sale dated December 29, 1992, the civil
status of Rogelio as seller was not stated, while petitioner as buyer
was indicated as "single," viz.:chanroblesvirtuallawlibrary
ROGELIO A. NUEGA, of legal age, Filipino citizen and with postal
address at 2-A-2 Ladislao Diwa St., Concepcion, Marikina, Metro
Manila, hereinafter referred to as the VENDOR
And
JOSEFINA V. NOBLEZA, of legal age, Filipino citizen, single and with
postal address at No. L-2-A-3 Ladislao Diwa St., Concepcion,
Marikina, Metro Manila, hereinafter referred to as the
VENDEE.32cralawlawlibrary
It puzzles the Court that while petitioner has repeatedly claimed
that Rogelio is "single" under TCT No. 171963 and Tax Declaration
Nos. D-012-04723 and D-012-04724, his civil status as seller was not
stated in the Deed of Absolute Sale - further creating a cloud on the
claim of petitioner that she is an innocent purchaser for value.
As to the second issue, we rule that the appellate court did not err
when it modified the decision of the trial court and declared that
the Deed of Absolute Sale dated December 29, 1992 is void in its
entirety.
The trial court held that while the TCT shows that the owner of the
subject property is Rogelio alone, respondent was able to prove at
the trial court that she contributed in the payment of the purchase
price of the subject property. This fact was also settled with finality
by the RTC of Pasig City, Branch 70, and affirmed by the CA, in the
case for legal separation and liquidation of property docketed as
JDRC Case No. 2510. The pertinent portion of the decision
reads:chanroblesvirtuallawlibrary
xxx Clearly, the house and lot jointly acquired by the parties prior to
their marriage forms part of their community property regime, xxx
From the foregoing, Shirley sufficiently proved her financial
contribution for the purchase of the house and lot covered by TCT
171963. Thus, the present lot which forms part of their community
property should be divided equally between them upon the grant of
the instant petition for legal separation. Having established by
preponderance of evidence the fact of her husband's guilt in
contracting a subsequent marriage xxx, Shirley alone should be
entitled to the net profits earned by the absolute community
property.33cralawlawlibrary
However, the nullity of the sale made by Rogelio is not premised on
proof of respondent's financial contribution in the purchase of the
subject property. Actual contribution is not relevant in determining
whether a piece of property is community property for the law itself
defines what constitutes community property.
Article 91 of the Family Code thus
provides:chanroblesvirtuallawlibrary
Art. 91. Unless otherwise provided in this Chapter or in the marriage
settlements, the community property shall consist of all the
property owned by the spouses at the time of the celebration of the
marriage or acquired thereafter.
The only exceptions from the above rule are: (1) those excluded
from the absolute community by the Family Code; and (2) those
excluded by the marriage settlement.
Under the first exception are properties enumerated in Article 92 of
the Family Code, which states:chanroblesvirtuallawlibrary
Art. 92. The following shall be excluded from the community
property:
(1) Property acquired during the marriage by gratuitous title by
either spouse, and the fruits as well as the income thereof, if any,
unless it is expressly provided by the donor, testator or grantor that
they shall form part of the community property;
(2) Property for personal and exclusive use of either spouse;
however, jewelry shall form part of the community property;
(3) Property acquired before the marriage by either spouse who has
legitimate descendants by a former marriage, and the fruits as well
as the income, if any, of such property.
As held in Quiao v. Quiao:34ChanRoblesVirtualawlibrary
When a couple enters into a regime of absolute community, the
husband and the wife becomes joint owners of all the properties of
the marriage. Whatever property each spouse brings into the
marriage, and those acquired during the marriage (except those
excluded under Article 92 of the Family Code) form the common
mass of the couple's properties. And when the couple's marriage or
community is dissolved, that common mass is divided between the
spouses, or their respective heirs, equally or in the proportion the
parties have established, irrespective of the value each one may
have originally owned.
Since the subject property does not fall under any of the exclusions
provided in Article 92, it therefore forms part of the absolute
community property of Shirley and Rogelio. Regardless of their
respective contribution to its acquisition before their marriage, and
despite the fact that only Rogelio's name appears in the TCT as
owner, the property is owned jointly by the spouses Shirley and
Rogelio.
Respondent and Rogelio were married on September 1, 1990.
Rogelio, on his own and without the consent of herein respondent
as his spouse, sold the subject property via a Deed of Absolute Sale
dated December 29, 1992 - or during the subsistence of a valid
contract of marriage. Under Article 96 of Executive Order No. 209,
otherwise known as The Family Code of the Philippines, the said
disposition of a communal property is
void, viz.:chanroblesvirtuallawlibrary
Art. 96. The administration and enjoyment of the community
property shall belong to both spouses jointly. In case of
disagreement, the husband's decision shall prevail, subject to
recourse to the court by the wife for a proper remedy, which must
be availed of within five years from the date of the contract
implementing such decision.
In the event that one spouse is incapacitated or otherwise unable to
participate in the administration of the common properties, the
other spouse may assume sole powers of administration. These
powers do not include the powers of disposition or encumbrance
without the authority of the court or the written consent of the
other spouse. In the absence of such authority or consent, the
disposition or encumbrance shall be void. However, the transaction
shall be construed as a continuing offer on the part of the
consenting spouse and the third person, and may be perfected as a
binding contract upon the acceptance by the other spouse or
authorization by the court before the offer is withdrawn by either or
both offerors.35cralawlawlibrary
It is clear under the foregoing provision of the Family Code that
Rogelio could not sell the subject property without the written
consent of respondent or the authority of the court. Without such
consent or authority, the entire sale is void. As correctly explained
by the appellate court:chanroblesvirtuallawlibrary
In the instant case, defendant Rogelio sold the entire subject
property to defendant-appellant Josefina on 29 December 1992 or
during the existence of Rogelio's marriage to plaintiff-appellee
Shirley, without the consent of the latter. The subject property
forms part of Rogelio and Shirley's absolute community of property.
Thus, the trial court erred in declaring the deed of sale null and void
only insofar as the 55.05 square meters representing the one-half
(1/2) portion of plaintiff-appellee Shirley. In absolute community of
property, if the husband, without knowledge and consent of the
wife, sells (their) property, such sale is void. The consent of both the
husband Rogelio and the wife Shirley is required and the absence of
the consent of one renders the entire sale null and void including
the portion of the subject property pertaining to defendant Rogelio
who contracted the sale with defendant-appellant Josefina. Since
the Deed of Absolute Sale x x x entered into by and between
defendant-appellant Josefina and defendant Rogelio dated 29
December 1992, during the subsisting marriage between plaintiff-
appellee Shirley and Rogelio, was without the written consent of
Shirley, the said Deed of Absolute Sale is void in its entirety. Hence,
the trial court erred in declaring the said Deed of Absolute Sale as
void only insofar as the 1/2 portion pertaining to the share of Shirley
is concerned.36cralawlawlibrary
Finally, consistent with our ruling that Rogelio solely entered into
the contract of sale with petitioner and acknowledged receiving the
entire consideration of the contract under the Deed of Absolute
Sale, Shirley could not be held accountable to petitioner for the
reimbursement of her payment for the purchase of the subject
property. Under Article 94 of the Family Code, the absolute
community of property shall only be "liable for x x x [d]ebts and
obligations contracted by either spouse without the consent of the
other to the extent that the family may have been benefited x x x."
As correctly stated by the appellate court, there being no evidence
on record that the amount received by Rogelio redounded to the
benefit of the family, respondent cannot be made to reimburse any
amount to petitioner.37
WHEREFORE, in view of the foregoing, the petition is DENIED. The
assailed Decision and Resolution of the Court of Appeals dated May
14, 2010 and July 21, 2010, respectively, in CA-G.R. CV No. 70235
are AFFIRMED.
Costs against petitioner.
SO ORDERED. chanroblesvi rtua llawli bra ry
SECOND DIVISION
G.R. No. 183984 April 13, 2011
ARTURO SARTE FLORES, Petitioner,
vs.
SPOUSES ENRICO L. LINDO, JR. and EDNA C. LINDO, Respondents.
DECISION
CARPIO, J.:
The Case
Before the Court is a petition for review1 assailing the 30 May 2008
Decision2 and the 4 August 2008 Resolution3 of the Court of Appeals
in CA-G.R. SP No. 94003.
The Antecedent Facts
The facts, as gleaned from the Court of Appeals’ Decision, are as
follows:
On 31 October 1995, Edna Lindo (Edna) obtained a loan from Arturo
Flores (petitioner) amounting to ₱400,000 payable on 1 December
1995 with 3% compounded monthly interest and 3% surcharge in
case of late payment. To secure the loan, Edna executed a Deed of
Real Estate Mortgage4 (the Deed) covering a property in the name
of Edna and her husband Enrico (Enrico) Lindo, Jr. (collectively,
respondents). Edna also signed a Promissory Note5and the Deed for
herself and for Enrico as his attorney-in-fact.
Edna issued three checks as partial payments for the loan. All checks
were dishonored for insufficiency of funds, prompting petitioner to
file a Complaint for Foreclosure of Mortgage with Damages against
respondents. The case was raffled to the Regional Trial Court of
Manila, Branch 33 (RTC, Branch 33) and docketed as Civil Case No.
00-97942.
In its 30 September 2003 Decision,6 the RTC, Branch 33 ruled that
petitioner was not entitled to judicial foreclosure of the mortgage.
The RTC, Branch 33 found that the Deed was executed by Edna
without the consent and authority of Enrico. The RTC, Branch 33
noted that the Deed was executed on 31 October 1995 while the
Special Power of Attorney (SPA) executed by Enrico was only dated
4 November 1995.
The RTC, Branch 33 further ruled that petitioner was not precluded
from recovering the loan from Edna as he could file a personal
action against her. However, the RTC, Branch 33 ruled that it had no
jurisdiction over the personal action which should be filed in the
place where the plaintiff or the defendant resides in accordance
with Section 2, Rule 4 of the Revised Rules on Civil Procedure.
Petitioner filed a motion for reconsideration. In its Order 7 dated 8
January 2004, the RTC, Branch 33 denied the motion for lack of
merit.
On 8 September 2004, petitioner filed a Complaint for Sum of
Money with Damages against respondents. It was raffled to Branch
42 (RTC, Branch 42) of the Regional Trial Court of Manila, and
docketed as Civil Case No. 04-110858.
Respondents filed their Answer with Affirmative Defenses and
Counterclaims where they admitted the loan but stated that it only
amounted to ₱340,000. Respondents further alleged that Enrico was
not a party to the loan because it was contracted by Edna without
Enrico’s signature. Respondents prayed for the dismissal of the case
on the grounds of improper venue, res judicata and forum-
shopping, invoking the Decision of the RTC, Branch 33. On 7 March
2005, respondents also filed a Motion to Dismiss on the grounds of
res judicata and lack of cause of action.
The Decision of the Trial Court
On 22 July 2005, the RTC, Branch 42 issued an Order8 denying the
motion to dismiss. The RTC, Branch 42 ruled that res judicata will
not apply to rights, claims or demands which, although growing out
of the same subject matter, constitute separate or distinct causes of
action and were not put in issue in the former action. Respondents
filed a motion for reconsideration. In its Order9 dated 8 February
2006, the RTC, Branch 42 denied respondents’ motion. The RTC,
Branch 42 ruled that the RTC, Branch 33 expressly stated that its
decision did not mean that petitioner could no longer recover the
loan petitioner extended to Edna.
Respondents filed a Petition for Certiorari and Mandamus with
Prayer for a Writ of Preliminary Injunction and/or Temporary
Restraining Order before the Court of Appeals.
The Decision of the Court of Appeals
In its 30 May 2008 Decision, the Court of Appeals set aside the 22
July 2005 and 8 February 2006 Orders of the RTC, Branch 42 for
having been issued with grave abuse of discretion.
The Court of Appeals ruled that while the general rule is that a
motion to dismiss is interlocutory and not appealable, the rule
admits of exceptions. The Court of Appeals ruled that the RTC,
Branch 42 acted with grave abuse of discretion in denying
respondents’ motion to dismiss.
The Court of Appeals ruled that under Section 3, Rule 2 of the 1997
Rules of Civil Procedure, a party may not institute more than one
suit for a single cause of action. If two or more suits are instituted
on the basis of the same cause of action, the filing of one on a
judgment upon the merits in any one is available ground for the
dismissal of the others. The Court of Appeals ruled that on a
nonpayment of a note secured by a mortgage, the creditor has a
single cause of action against the debtor, that is recovery of the
credit with execution of the suit. Thus, the creditor may institute
two alternative remedies: either a personal action for the collection
of debt or a real action to foreclose the mortgage, but not both. The
Court of Appeals ruled that petitioner had only one cause of action
against Edna for her failure to pay her obligation and he could not
split the single cause of action by filing separately a foreclosure
proceeding and a collection case. By filing a petition for foreclosure
of the real estate mortgage, the Court of Appeals held that
petitioner had already waived his personal action to recover the
amount covered by the promissory note.
Petitioner filed a motion for reconsideration. In its 4 August 2008
Resolution, the Court of Appeals denied the motion.
Hence, the petition before this Court.
The Issue
The sole issue in this case is whether the Court of Appeals
committed a reversible error in dismissing the complaint for
collection of sum of money on the ground of multiplicity of suits.
The Ruling of this Court
The petition has merit.
The rule is that a mortgage-creditor has a single cause of action
against a mortgagor-debtor, that is, to recover the debt.10 The
mortgage-creditor has the option of either filing a personal action
for collection of sum of money or instituting a real action to
foreclose on the mortgage security.11 An election of the first bars
recourse to the second, otherwise there would be multiplicity of
suits in which the debtor would be tossed from one venue to
another depending on the location of the mortgaged properties and
the residence of the parties.12
The two remedies are alternative and each remedy is complete by
itself.13 If the mortgagee opts to foreclose the real estate mortgage,
he waives the action for the collection of the debt, and vice
versa.14 The Court explained:
x x x in the absence of express statutory provisions, a mortgage
creditor may institute against the mortgage debtor either a personal
action for debt or a real action to foreclose the mortgage. In other
words, he may pursue either of the two remedies, but not both. By
such election, his cause of action can by no means be impaired, for
each of the two remedies is complete in itself. Thus, an election to
bring a personal action will leave open to him all the properties of
the debtor for attachment and execution, even including the
mortgaged property itself. And, if he waives such personal action
and pursues his remedy against the mortgaged property, an
unsatisfied judgment thereon would still give him the right to sue
for deficiency judgment, in which case, all the properties of the
defendant, other than the mortgaged property, are again open to
him for the satisfaction of the deficiency. In either case, his remedy
is complete, his cause of action undiminished, and any advantages
attendant to the pursuit of one or the other remedy are purely
accidental and are all under his right of election. On the other hand,
a rule that would authorize the plaintiff to bring a personal action
against the debtor and simultaneously or successively another
action against the mortgaged property, would result not only in
multiplicity of suits so offensive to justice (Soriano v. Enriques, 24
Phil. 584) and obnoxious to law and equity (Osorio v. San Agustin, 25
Phil. 404), but also in subjecting the defendant to the vexation of
being sued in the place of his residence or of the residence of the
plaintiff, and then again in the place where the property lies.15
The Court has ruled that if a creditor is allowed to file his separate
complaints simultaneously or successively, one to recover his credit
and another to foreclose his mortgage, he will, in effect, be
authorized plural redress for a single breach of contract at so much
costs to the court and with so much vexation and oppressiveness to
the debtor.16
In this case, however, there are circumstances that the Court takes
into consideration.
Petitioner filed an action for foreclosure of mortgage. The RTC,
Branch 33 ruled that petitioner was not entitled to judicial
foreclosure because the Deed of Real Estate Mortgage was executed
without Enrico’s consent. The RTC, Branch 33 stated:
All these circumstances certainly conspired against the plaintiff who
has the burden of proving his cause of action. On the other hand,
said circumstances tend to support the claim of defendant Edna
Lindo that her husband did not consent to the mortgage of their
conjugal property and that the loan application was her personal
decision.
Accordingly, since the Deed of Real Estate Mortgage was executed
by defendant Edna Lindo lacks the consent or authority of her
husband Enrico Lindo, the Deed of Real Estate Mortgage is void
pursuant to Article 96 of the Family Code.
This does not mean, however, that the plaintiff cannot recover the
₱400,000 loan plus interest which he extended to defendant Edna
Lindo. He can institute a personal action against the defendant for
the amount due which should be filed in the place where the
plaintiff resides, or where the defendant or any of the principal
defendants resides at the election of the plaintiff in accordance with
Section 2, Rule 4 of the Revised Rules on Civil Procedure. This Court
has no jurisdiction to try such personal action.17
Edna did not deny before the RTC, Branch 33 that she obtained the
loan. She claimed, however, that her husband did not give his
consent and that he was not aware of the transaction.18 Hence, the
RTC, Branch 33 held that petitioner could still recover the amount
due from Edna through a personal action over which it had no
jurisdiction.
Edna also filed an action for declaratory relief before the RTC,
Branch 93 of San Pedro Laguna (RTC, Branch 93), which ruled:
At issue in this case is the validity of the promissory note and the
Real Estate Mortgage executed by Edna Lindo without the consent
of her husband.
The real estate mortgage executed by petition Edna Lindo over their
conjugal property is undoubtedly an act of strict dominion and must
be consented to by her husband to be effective. In the instant case,
the real estate mortgage, absent the authority or consent of the
husband, is necessarily void. Indeed, the real estate mortgage is this
case was executed on October 31, 1995 and the subsequent special
power of attorney dated November 4, 1995 cannot be made to
retroact to October 31, 1995 to validate the mortgage previously
made by petitioner.
The liability of Edna Lindo on the principal contract of the loan
however subsists notwithstanding the illegality of the mortgage.
Indeed, where a mortgage is not valid, the principal obligation which
it guarantees is not thereby rendered null and void. That obligation
matures and becomes demandable in accordance with the
stipulation pertaining to it. Under the foregoing circumstances, what
is lost is merely the right to foreclose the mortgage as a special
remedy for satisfying or settling the indebtedness which is the
principal obligation. In case of nullity, the mortgage deed remains as
evidence or proof of a personal obligation of the debtor and the
amount due to the creditor may be enforced in an ordinary action.
In view of the foregoing, judgment is hereby rendered declaring the
deed of real estate mortgage as void in the absence of the authority
or consent of petitioner’s spouse therein. The liability of petitioner
on the principal contract of loan however subsists notwithstanding
the illegality of the real estate mortgage.19
The RTC, Branch 93 also ruled that Edna’s liability is not affected by
the illegality of the real estate mortgage.
Both the RTC, Branch 33 and the RTC, Branch 93 misapplied the
rules.
Article 124 of the Family Code provides:
Art. 124. The administration and enjoyment of the conjugal
partnership property shall belong to both spouses jointly. In case of
disagreement, the husband’s decision shall prevail, subject to
recourse to the court by the wife for proper remedy, which must be
availed of within five years from the date of contract implementing
such decision.
In the event that one spouse is incapacitated or otherwise unable to
participate in the administration of the conjugal properties, the
other spouse may assume sole powers of administration. These
powers do not include disposition or encumbrance without
authority of the court or the written consent of the other spouse. In
the absence of such authority or consent the disposition or
encumbrance shall be void. However, the transaction shall be
construed as a continuing offer on the part of the consenting
spouse and the third person, and may be perfected as a binding
contract upon the acceptance by the other spouse or authorization
by the court before the offer is withdrawn by either or both
offerors. (Emphasis supplied)
Article 124 of the Family Code of which applies to conjugal
partnership property, is a reproduction of Article 96 of the Family
Code which applies to community property.
Both Article 96 and Article 127 of the Family Code provide that the
powers do not include disposition or encumbrance without the
written consent of the other spouse. Any disposition or
encumbrance without the written consent shall be void. However,
both provisions also state that "the transaction shall be construed as
a continuing offer on the part of the consenting spouse and the
third person, and may be perfected as a binding contract upon the
acceptance by the other spouse x x x before the offer is withdrawn
by either or both offerors."
In this case, the Promissory Note and the Deed of Real Estate
Mortgage were executed on 31 October 1995. The Special Power of
Attorney was executed on 4 November 1995. The execution of the
SPA is the acceptance by the other spouse that perfected the
continuing offer as a binding contract between the parties, making
the Deed of Real Estate Mortgage a valid contract.
However, as the Court of Appeals noted, petitioner allowed the
decisions of the RTC, Branch 33 and the RTC, Branch 93 to become
final and executory without asking the courts for an alternative
relief. The Court of Appeals stated that petitioner merely relied on
the declarations of these courts that he could file a separate
personal action and thus failed to observe the rules and settled
jurisprudence on multiplicity of suits, closing petitioner’s avenue for
recovery of the loan.
Nevertheless, petitioner still has a remedy under the law.
In Chieng v. Santos,20 this Court ruled that a mortgage-creditor may
institute against the mortgage-debtor either a personal action for
debt or a real action to foreclose the mortgage. The Court ruled that
the remedies are alternative and not cumulative and held that the
filing of a criminal action for violation of Batas Pambansa Blg. 22
was in effect a collection suit or a suit for the recovery of the
mortgage-debt.21 In that case, however, this Court pro hac vice,
ruled that respondents could still be held liable for the balance of
the loan, applying the principle that no person may unjustly enrich
himself at the expense of another.22
The principle of unjust enrichment is provided under Article 22 of
the Civil Code which provides:
Art. 22. Every person who through an act of performance by
another, or any other means, acquires or comes into possession of
something at the expense of the latter without just or legal ground,
shall return the same to him.
There is unjust enrichment "when a person unjustly retains a benefit
to the loss of another, or when a person retains money or property
of another against the fundamental principles of justice, equity and
good conscience."23 The principle of unjust enrichment requires two
conditions: (1) that a person is benefited without a valid basis or
justification, and (2) that such benefit is derived at the expense of
another.241avvphi1
The main objective of the principle against unjust enrichment is to
prevent one from enriching himself at the expense of another
without just cause or consideration.25 The principle is applicable in
this case considering that Edna admitted obtaining a loan from
petitioners, and the same has not been fully paid without just cause.
The Deed was declared void erroneously at the instance of Edna,
first when she raised it as a defense before the RTC, Branch 33 and
second, when she filed an action for declaratory relief before the
RTC, Branch 93. Petitioner could not be expected to ask the RTC,
Branch 33 for an alternative remedy, as what the Court of Appeals
ruled that he should have done, because the RTC, Branch 33 already
stated that it had no jurisdiction over any personal action that
petitioner might have against Edna.
Considering the circumstances of this case, the principle against
unjust enrichment, being a substantive law, should prevail over the
procedural rule on multiplicity of suits. The Court of Appeals, in the
assailed decision, found that Edna admitted the loan, except that
she claimed it only amounted to ₱340,000. Edna should not be
allowed to unjustly enrich herself because of the erroneous
decisions of the two trial courts when she questioned the validity of
the Deed. Moreover, Edna still has an opportunity to submit her
defenses before the RTC, Branch 42 on her claim as to the amount
of her indebtedness.
WHEREFORE, the 30 May 2008 Decision and the 4 August 2008
Resolution of the Court of Appeals in CA-G.R. SP No. 94003 are SET
ASIDE. The Regional Trial Court of Manila, Branch 42 is directed to
proceed with the trial of Civil Case No. 04-110858.
SO ORDERED.
EN BANC
G.R. No. L-19565 January 30, 1968
ESTRELLA DE LA CRUZ, plaintiff-appellee,
vs.
SEVERINO DE LA CRUZ, defendant-appellant.
Estacion and Paltriguera for plaintiff-appellee.
Manuel O. Soriano and Pio G. Villoso for defendant-appellant.
CASTRO, J.:
The plaintiff Estrella de la Cruz filed a complaint on July 22, 1958
with the Court of First Instance of Negros Occidental, alleging in
essence that her husband, the defendant Severino de la Cruz, had
not only abandoned her but as well was mismanaging their conjugal
partnership properties, and praying for (1) separation of property,
(2) monthly support of P2,500 during the pendency of the action,
and (3) payment of P20,000 as attorney's fees, and costs.
The court a quo forthwith issued an order allowing the plaintiff the
amount prayed for as alimony pendente lite, which however, upon
defendant's motion, was reduced to P2,000.
On June 1, 1961 the trial court rendered judgment ordering
separation and division of the conjugal assets, and directing the
defendant to pay to the plaintiff the sum of P20,000 as attorney's
fees, with legal interest from the date of the original complaint, that
is, from July 22, 1958, until fully paid, plus costs. From this judgment
the defendant appealed to the Court of Appeals, which certified the
case to us, "it appearing that the total value of the conjugal assets is
over P500,000".
The basic facts are not controverted. The plaintiff and the defendant
were married in Bacolod City on February 1, 1938. Six children were
born to them, namely, Zenia (1939), Ronnie (1942), Victoria (1944),
Jessie 1945), Bella (1946), and Felipe (1948). During their coverture
they acquired seven parcels of land of the Bacolod Cadastre, all
assessed at P45,429, and three parcels of the Silay Cadastre, all
assessed at P43,580. All these parcels are registered in their names.
The hacienda in Silay yielded for the year 1957 a net profit of
P3,390.49.
They are also engaged in varied business ventures with fixed assets
valued as of December 31, 1956 at P496,006.92, from which they
obtained for that year a net profit of P75,655.78. The net gain of the
Philippine Texboard Factory, the principal business of the spouses,
was P90,454.48 for the year 1957. As of December 31, 1959, the
total assets of the various enterprises of the conjugal partnership
were valued at P1,021,407.68, not including those of the Top
Service Inc., of which firm the defendant has been the president
since its organization in 1959 in Manila with a paid-up capital of
P50,000, P10,000 of which was contributed by him. This corporation
was the Beverly Hills Subdivision in Antipolo, Rizal, the Golden Acres
Subdivision and the Green Valley Subdivision in Las Piñas, Rizal, and
a lot and building located at M. H. del Pilar, Manila purchased for
P285,000, an amount borrowed from the Manufacturer's Bank and
Trust Company.
The spouses are indebted to the Philippine National Bank and the
Development Bank of the Philippines for loans obtained, to secure
which they mortgaged the Philippine Texboard Factory, the
Silay hacienda, their conjugal house, and all their parcels of land
located in Bacolod City.
The essential issues of fact may be gleaned from the nine errors the
defendant imputes to the court a quo, namely,
1. In finding that the only visit, from May 15, 1955 to the
rendition of the decision, made by the defendant to the
conjugal abode to see his wife was on June 15, 1955;
2. In finding that the letter exh. 3 was written by one
Nenita Hernandez and that she and the defendant are
living as husband and wife;
3. In finding that since 1951 the relations between the
plaintiff and the defendant were far from cordial, and that
it was from 1948 that the former has been receiving an
allowance from the latter;
4. In finding that the defendant has abandoned the
plaintiff;
5. In finding that the defendant since 1956 has not
discussed with his wife the business activities of the
partnership, and that this silence constituted "abuse of
administration of the conjugal partnerships";
6. In declaring that the defendant mortgaged the conjugal
assets without the knowledge of the plaintiff and thru false
pretences to which the latter was prey;
7. In allowing the plaintiff, on the one hand, to testify on
facts not actually known by her, and, on the other hand, in
not allowing the defendant to establish his special
defenses;
8. In ordering separation of the conjugal partnership
properties; and
9. In sentencing the defendant to pay to the plaintiff
attorney's fees in the amount of P20,000, with interest at
the legal rate.1äwphï1.ñët
Two issues of law as well emerge, requiring resolution petition: (1)
Did the separation of the defendant from the plaintiff constitute
abandonment in law that would justify a separation of the conjugal
partnership properties? (2) Was the defendant's failure and/or
refusal to inform the plaintiff of the state of their business
enterprises such an abuse of his powers of administration of the
conjugal partnership as to warrant a division of the matrimonial
assets?
The plaintiff's evidence may be summarized briefly. The defendant
started living in Manila in 1955, although he occasionally returned
to Bacolod City, sleeping in his office at the Philippine Texboard
Factory in Mandalagan, instead of in the conjugal home at 2nd
Street, Bacolod City. Since 1955 the defendant had not slept in the
conjugal dwelling, although in the said year he paid short visits
during which they engaged in brief conversations. After 1955 up to
the time of the trial, the defendant had never visited the conjugal
abode, and when he was in Bacolod, she was denied communication
with him. He has abandoned her and their children, to live in Manila
with his concubine, Nenita Hernandez. In 1949 she began to suspect
the existence of illicit relations between her husband and Nenita.
This suspicion was confirmed in 1951 when she found an unsigned
note in a pocket of one of her husband's polo shirt which was
written by Nenita and in which she asked "Bering" to meet her near
the church. She confronted her husband who forthwith tore the
note even as he admitted his amorous liaison with Nenita. He then
allayed her fears by vowing to forsake his mistress. Subsequently, in
November 1951, she found in the iron safe of her husband a letter,
exh. C, also written by Nenita. In this letter the sender (who signed
as "D") apologized for her conduct, and expressed the hope that the
addressee ("Darling") could join her in Baguio as she was alone in
the Patria Inn and lonely in "a place for honeymooners".
Immediately after her husband departed for Manila the following
morning, the plaintiff enplaned for Baguio, where she learned that
Nenita had actually stayed at the Patria Inn, but had already left for
Manila before her arrival. Later she met her husband in the house of
a relative in Manila from whence they proceeded to the Avenue
Hotel where she again confronted him about Nenita. He denied
having further relations with this woman.
Celia Bañez, testifying for the plaintiff, declared that she was
employed as a cook in the home of the spouses from May 15, 1955
to August 15, 1958, and that during the entire period of her
employment she saw the defendant in the place only once. This
declaration is contradicted, however, by the plaintiff herself who
testified that in 1955 the defendant "used to have a short visit
there," which statement implies more than one visit.
The defendant, for his part, denied having abandoned his wife and
children, but admitted that in 1957, or a year before the filing of the
action, he started to live separately from his wife. When he
transferred his living quarters to his office in Mandalagan, Bacolod
City, his intention was not, as it never has been, to abandon his wife
and children, but only to teach her a lesson as she was quarrelsome
and extremely jealous of every woman. He decided to live apart
from his wife temporarily because at home he could not
concentrate on his work as she always quarreled with him, while in
Mandalagan he could pass the nights in peace. Since 1953 he stayed
in Manila for some duration of time to manage their expanding
business and look for market outlets for their texboard products.
Even the plaintiff admitted in both her original and amended
complaints that "sometime in 1953, because of the expanding
business of the herein parties, the defendant established an office in
the City of Manila, wherein some of the goods, effects and
merchandise manufactured or produced in the business enterprises
of the parties were sold or disposed of". From the time he started
living separately in Mandalagan up to the filing of the complaint, the
plaintiff herself furnished him food and took care of his laundry. This
latter declaration was not rebutted by the plaintiff.
The defendant, with vehemence, denied that he has abandoned his
wife and family, averring that he has never failed, even for a single
month, to give them financial support, as witnessed by the plaintiff's
admission in her original and amended complaints as well as in open
court that during the entire period of their estrangement, he was
giving her around P500 a month for support. In point of fact, his wife
and children continued to draw allowances from his office of a total
ranging from P1,200 to P1,500 a month. He financed the education
of their children, two of whom were studying in Manila at the time
of the trial and were not living with the plaintiff. While in Bacolod
City, he never failed to visit his family, particularly the children. His
wife was always in bad need of money because she played mahjong,
an accusation which she did not traverse, explaining that she
played mahjong to entertain herself and forget the infidelities of her
husband.
Marcos V. Ganaban, the manager of the Philippine Texboard
Factory, corroborated the testimony of the defendant on the matter
of the support the latter gave to his family, by declaring in court that
since the start of his employment in 1950 as assistant general
manager, the plaintiff has been drawing an allowance of P1,000 to
P1,500 monthly, which amount was given personally by the
defendant or, in his absence, by the witness himself.
The defendant denied that he ever maintained a mistress in Manila.
He came to know Nenita Hernandez when she was barely 12 years
old, but had lost track of her thereafter. His constant presence in
Manila was required by the pressing demands of an expanding
business. He denied having destroyed the alleged note which the
plaintiff claimed to have come from Nenita, nor having seen,
previous to the trial, the letter exh. C. The allegation of his wife that
he had a concubine is based on mere suspicion. He had always been
faithful to his wife, and not for a single instance had he been caught
or surprised by her with another woman.
On the matter of the alleged abuse by the defendant of his powers
of administration of the conjugal partnership, the plaintiff declared
that the defendant refused and failed to inform her of the progress
of their various business concerns. Although she did not allege,
much less prove, that her husband had dissipated the conjugal
properties, she averred nevertheless that her husband might
squander and dispose of the conjugal assets in favor of his
concubine. Hence, the urgency of separation of property.
The defendant's answer to the charge of mismanagement is that he
has applied his industry, channeled his ingenuity, and devoted his
time, to the management, maintenance and expansion of their
business concerns, even as his wife threw money away at
the mahjong tables. Tangible proof of his endeavors is that from a
single cargo truck which he himself drove at the time of their
marriage, he had built up one business after another, the Speedway
Trucking Service, the Negros Shipping Service, the Bacolod Press,
the Philippine Texboard Factory, and miscellaneous other business
enterprises worth over a million pesos; that all that the spouses now
own have been acquired through his diligence, intelligence and
industry; that he has steadily expanded the income and assets of
said business enterprises from year to year, contrary to the
allegations of the complainant, as proved by his balance sheet and
profit and loss statements for the year 1958 and 1959 (exhibits 1
and 2); and that out of the income of their enterprises he had
purchased additional equipment and machineries and has partially
paid their indebtedness to the Philippine National Bank and the
Development Bank of the Philippines.
It will be noted that the plaintiff does not ask for legal separation.
The evidence presented by her to prove concubinage on the part of
the defendant, while pertinent and material in the determination of
the merits of a petition for legal separation, must in this case be
regarded merely as an attempt to bolster her claim that the
defendant had abandoned her, which abandonment, if it constitutes
abandonment in law, would justify separation of the conjugal assets
under the applicable provisions of article 178 of the new Civil Code
which read: "The separation in fact between husband and wife
without judicial approval, shall not affect the conjugal partnership,
except that . . . if the husband has abandoned the wife without just
cause for at least one year, she may petition the court for a
receivership, or administration by her of the conjugal partnership
property, or separation of property". In addition to abandonment as
a ground, the plaintiff also invokes article 167 of the new Civil Code
in support of her prayer for division of the matrimonial assets. This
article provides that "In case of abuse of powers of administration of
the conjugal partnership property by the husband, the courts, on
the petition of the wife, may provide for a receivership, or
administration by the wife, or separation of property". It behooves
us, therefore, to inquire, in the case at bar, whether there has been
abandonment, in the legal sense, by the defendant of the plaintiff,
and/or whether the defendant has abused his powers of
administration of the conjugal partnership property, so as to justify
the plaintiff's plea for separation of property.
We have made a searching scrutiny of the record, and it is our
considered view that the defendant is not guilty of abandonment of
his wife, nor of such abuse of his powers of administration of the
conjugal partnership, as to warrant division of the conjugal assets.
The extraordinary remedies afforded to the wife by article 178 when
she has been abandoned by the husband for at least one year are
the same as those granted to her by article 167 in case of abuse of
the powers of administration by the husband. To entitle her to any
of these remedies, under article 178, there must be real
abandonment, and not mere separation. 1 The abandonment must
not only be physical estrangement but also amount to financial and
moral desertion.
Although an all-embracing definition of the term "abandonment " is
yet to be spelled out in explicit words, we nevertheless can
determine its meaning from the context of the Law as well as from
its ordinary usage. The concept of abandonment in article 178 may
be established in relation to the alternative remedies granted to the
wife when she has been abandoned by the husband, namely,
receivership, administration by her, or separation of property, all of
which are designed to protect the conjugal assets from waste and
dissipation rendered imminent by the husband's continued absence
from the conjugal abode, and to assure the wife of a ready and
steady source of support. Therefore, physical separation alone is not
the full meaning of the term "abandonment", if the husband,
despite his voluntary departure from the society of his spouse,
neither neglects the management of the conjugal partnership nor
ceases to give support to his wife.
The word "abandon", in its ordinary sense, means to forsake
entirely; to forsake or renounce utterly. 2 The dictionaries trace this
word to the root idea of "putting under a bar". The emphasis is on
the finality and the publicity with which some thing or body is thus
put in the control of another, and hence the meaning of giving up
absolutely, with intent never again to resume or claim one's rights
or interests. 3 When referring to desertion of a wife by a husband,
the word has been defined as "the act of a husband in voluntarily
leaving his wife with intention to forsake her entirely, never to
return to her, and never to resume his marital duties towards her,
or to claim his marital rights; such neglect as either leaves the wife
destitute of the common necessaries of life, or would leave her
destitute but for the charity of others." 4 The word "abandonment",
when referring to the act of one consort of leaving the other, is "the
act of the husband or the wife who leaves his or her consort wilfully,
and with an intention of causing per perpetual separation." 5 Giving
to the word "abandoned", as used in article 178, the meaning drawn
from the definitions above reproduced, it seems rather clear that to
constitute abandonment of the wife by the husband, there must be
absolute cessation of marital relations and duties and rights, with
the intention of perpetual separation.
Coming back to the case at bar, we believe that the defendant did
not intend to leave his wife and children permanently. The record
conclusively shows that he continued to give support to his family
despite his absence from the conjugal home. This fact is admitted by
the complainant, although she minimized the amount of support
given, saying that it was only P500 monthly. There is good reason to
believe, however, that she and the children received more than this
amount, as the defendant's claim that his wife and children
continued to draw from his office more than P500 monthly was
substantially corroborated by Marcos Ganaban, whose declarations
were not rebutted by the plaintiff. And then there is at all no
showing that the plaintiff and the children were living in want. On
the contrary, the plaintiff admitted, albeit reluctantly, that she
frequently played mahjong, from which we can infer that she had
money; to spare.
The fact that the defendant never ceased to give support to his wife
and children negatives any intent on his part not to return to the
conjugal abode and resume his marital duties and rights. In People v.
Schelske, 6 it was held that where a husband, after leaving his wife,
continued to make small contributions at intervals to her support
and that of their minor child, he was not guilty of their
"abandonment", which is an act of separation with intent that it
shall be perpetual, since contributing to their support negatived
such intent. In re Hoss' Estate, supra, it was ruled that a father did
not abandon his family where the evidence disclosed that he almost
always did give his wife part of his earnings during the period of
their separation and that he gradually paid some old rental and
grocery bills.
With respect to the allegation that the defendant maintained a
concubine, we believe, contrary to the findings of the court a quo,
that the evidence on record fails to preponderate in favor of the
plaintiff's thesis. The proof that Nenita Hernandez was the
concubine of the defendant and that they were living as husband
and wife in Manila, is altogether too indefinite. Aside from the
uncorroborated statement of the plaintiff that she knew that Nenita
Hernandez was her husband's concubine, without demonstrating by
credible evidence the existence of illicit relations between Nenita
and the defendant, the only evidence on record offered to link the
defendant to his alleged mistress is exh. C. The plaintiff however
failed to connect authorship of the said letter with Nenita, on the
face whereof the sender merely signed as "D" and the addressee
was one unidentified "Darling". The plaintiff's testimony on cross-
examination, hereunder quoted, underscores such failure:
Q. You personally never received any letter from Nenita?
A. No.
Q. Neither have you received on any time until today from
1949 from Nenita?
A. No.
Q. Neither have you written to her any letter yourself until
now?
A. Why should I write a letter to her.
Q. In that case, Mrs. De la Cruz, you are not familiar with
the handwriting of Nenita. Is that right?
A. I can say that Nenita writes very well.
Q. I am not asking you whether she writes very well or not
but, my question is this: In view of the fact that you have
never received a letter from Nenita, you have ot sent any
letter to her, you are not familiar with her handwriting?
 A. Yes.
Q. You have not seen her writing anybody?
A. Yes.
Anent the allegation that the defendant had mismanaged the
conjugal partnership property, the record presents a different
picture. There is absolutely no evidence to show that he has
squandered the conjugal assets. Upon the contrary, he proved that
through his industry and zeal, the conjugal assets at the time of the
trial had increased to a value of over a million pesos.
The lower court likewise erred in holding that mere refusal or failure
of the husband as administrator of the conjugal partnership to
inform the wife of the progress of the family businesses constitutes
abuse of administration. For "abuse" to exist, it is not enough that
the husband perform an act or acts prejudicial to the wife. Nor is it
sufficient that he commits acts injurious to the partnership, for
these may be the result of mere inefficient or negligent
administration. Abuse connotes willful and utter disregard of the
interests of the partnership, evidenced by a repetition of deliberate
acts and/or omissions prejudicial to the latter. 7
If there is only physical separation between the spouses (and
nothing more), engendered by the husband's leaving the conjugal
abode, but the husband continues to manage the conjugal
properties with the same zeal, industry, and efficiency as he did
prior to the separation, and religiously gives support to his wife and
children, as in the case at bar, we are not disposed to grant the
wife's petition for separation of property. This decision may appear
to condone the husband's separation from his wife; however, the
remedies granted to the wife by articles 167 and 178 are not to be
construed as condonation of the husband's act but are designed to
protect the conjugal partnership from waste and shield the wife
from want. Therefore, a denial of the wife's prayer does not imply a
condonation of the husband's act but merely points up the
insufficiency or absence of a cause of action.1äwphï1.ñët
Courts must need exercise judicial restraint and reasoned hesitance
in ordering a separation of conjugal properties because the basic
policy of the law is homiletic, to promote healthy family life and to
preserve the union of the spouses, in person, in spirit and in conjugal harmony may return and, on the basis of mutual respect
property. and understanding, endure.
Consistent with its policy of discouraging a regime of ACCORDINGLY, the judgment a quo, insofar as it decrees separation
separation as not in harmony with the unity of the family of the conjugal properties, is reversed and set aside. Conformably to
and the mutual affection and help expected of the spouses, our observations, however, the defendant is ordered to pay to the
the Civil Code (both old and new) requires that separation plaintiff, in the concept of support, the amount of P3,000 per
of property shall not prevail unless expressly stipulated in month, until he shall have rejoined her in the conjugal home, which
marriage settlements before the union is solemnized or by amount may, in the meantime, be reduced or increased in the
formal judicial decree during the existence of the marriage discretion of the court a quo as circumstances warrant. The award
(Article 190, new Civil Code, Article 1432, old Civil Code): of attorney's fees to the plaintiff is reduced to P10,000, without
and in the latter case, it may only be ordered by the court interest. No pronouncement as to costs.
for causes specified in Article 191 of the new Civil Code. 8
Furthermore, a judgment ordering the division of conjugal assets
where there has been no real abandonment, the separation not
being wanton and absolute, may altogether slam shut the door for
possible reconciliation. The estranged spouses may drift irreversibly
further apart; the already broken family solidarity may be
irretrievably shattered; and any flickering hope for a new life
together may be completely and finally extinguished.
The monthly alimony in the sum of P2,000 which was allowed to the
wife in 1958, long before the devaluation of the Philippine peso in
1962, should be increased to P3,000.
On the matter of attorney's fees, it is our view that because the
defendant, by leaving the conjugal abode, has given cause for the
plaintiff to seek redress in the courts, and ask for adequate support,
an award of attorney's fees to the plaintiff must be made. Ample
authority for such award is found in paragraphs 6 and 11 of article
2208 of the new Civil Code which empower courts to grant counsel's
fees "in actions for legal support" and in cases "where the court
deems it just and equitable that attorney's fees . . . should be
recovered." However, an award of P10,000, in our opinion, is, under
the environmental circumstances, sufficient.
This Court would be remiss if it did not, firstly, remind the plaintiff
and the defendant that the law enjoins husband and wife to live
together, and, secondly, exhort them to avail of — mutually,
earnestly and steadfastly — all opportunities for reconciliation to
the end that their marital differences may be happily resolved, and
FIRST DIVISION
follows:
G.R. No. 143286 April 14, 2004
PROCOPIO VILLANUEVA, NICOLAS RETUYA and PACITA
VILLANUEVA, petitioners,
vs.
COURT OF APPEALS and THE HEIRS OF EUSEBIA NAPISA
RETUYA, respondents.
DECISION
CARPIO, J.:
This petition for review on certiorari1 seeks the reversal of the Court
of Appeals’ Decision dated 31 January 2000 as well as its Resolution
dated 25 April 2000 in CA-G.R. No. CV-46716. The assailed Decision
dismissed petitioners’ appeal of the Decision of the Regional Trial
Court, Branch 55, Mandaue City ("trial court").
On 13 October 1988, Eusebia Napisa Retuya ("Eusebia") filed a
complaint before the trial court against her husband Nicolas Retuya
("Nicolas"), Pacita Villanueva ("Pacita"), and Nicolas’ son with Pacita,
Procopio Villanueva ("Procopio"). Eusebia sought the reconveyance
from Nicolas and Pacita of several properties listed in paragraph 2 of
the complaint ("subject properties"), claiming the subject properties
are her conjugal properties with Nicolas. Eusebia also prayed for
accounting, damages and the delivery of rent and other income
from the subject properties.
Antecedent Facts
The facts as found by the trial court are as follows:
Plaintiff Eusebia Napisa Retuya, is the legal wife of
defendant Nicolas Retuya, having been married to the
latter on October 7, 1926. Out of the lawful wedlock, they
begot five (5) children, namely, Natividad, Angela,
Napoleon, Salome, and Roberta. Spouses Retuya resided at
Tipolo, Mandaue City. During their marriage they acquired
real properties and all improvements situated in Mandaue
City, and Consolacion, Cebu, more particularly described as
‘1. A parcel of land located at Pulpugan,
Consolacion, Cebu under tax dec. No. 24951;
2. A parcel of land located at Pulpugan,
Consolacion, Cebu under tax dec. No. 24952;
3. A parcel of land located at Pulpugan,
Consolacion, Cebu under tax dec. No. 24953;
4. A parcel of land located at Pulpugan,
Consolacion, Cebu under tax dec. No. 24954;
5. A parcel of land located at Pulpugan,
Consolacion, Cebu under tax dec. No. 24956;
6. A parcel of land located at Pulpugan,
Consolacion, Cebu under tax dec. No. 24957;
7. A parcel of land located at Pulpugan,
Consolacion, Cebu under tax dec. No. 24958;
8. A parcel of land located at Tipolo, Mandaue
City, covered by tax dec. No. 01042;
9. A parcel of land located at Tipolo, Mandaue
City, covered by tax dec. No. 01043;
10. A parcel of land located at Tipolo, Mandaue
City, covered by tax dec. No. 01046;
11. A parcel of land located at Tipolo, Mandaue
City, covered by tax dec. No. 01041;
12. A parcel of land located at Nawanao-
Subangdaku, Mandaue City covered by tax dec.
No. 01488;
13. A parcel of land located at Baklid, Mandaue
City, covered by tax dec. No. 00492;
14. A parcel of land located at Tipolo, Mandaue
City covered by tax dec. No. 01044;
15. A residential house located at Tipolo, Mandaue
City covered by tax dec. No. 01050;
16. A parcel of land located at Tipolo, Mandaue
City covered by tax dec. No. 01048;
17. A parcel of land located at Tipolo, Mandaue
City covered by tax dec. No. 01051;
18. A parcel of land located at Tipolo, Mandaue
City covered by tax dec. No. 01047;
19. A parcel of land located at Banilad, Mandaue
City covered by tax dec. No. 02381;
20. A parcel of land located at Tipolo, Mandaue
City covered by tax dec. No. 01049;
21. A parcel of land located at Tipolo, Mandaue
City covered by tax dec. No. 01045;
22. A parcel of land located at Tipolo, Mandaue
City covered by tax dec. No. 01450 (in the name of
Pacita Villanueva).’
Also, defendant, Nicolas Retuya, is co-owner of a parcel of
land situated in Mandaue City which he inherited from his
parents Esteban Retuya and Balbina Solon as well as the
purchasers of hereditary shares of approximately eight (8)
parcels of land in Mandaue City.
Some of these properties above-mentioned earn income
from coconuts and the other lands/houses are leased to
the following:
a) Mandaue Food Products Company – for Lot
121-F, Lot 121-G and Lot 121-H under TCT No.
11300 at an annual rental of ₱10,800.00;
 b) Barben Wood Industries, Inc. – for Lot 148
covered by TCT No. l731 for an annual rental of
₱21,600.00;
c) Metaphil, Inc. – parcel of land consisting of
2,790.51 sq. meters at the rate of ₱2,700.00
annually for the first five (5) years, and ₱3,240.00
for the second years;
d) Benedicto Development Corp. – for a portion of
Lot 148 covered by TCT No. 1731 for a period of 20
years at an annual rate of ₱3,500.00 renewable for
another 20 years after April 1, 1995 at an annual
rate of ₱4,000.00;
e) Benedicto Development Corporation – for a
portion of Lot No. 148 covered by Certificate of
Title No. 1731 over an area of 6,000 sq. meters for
an annual rental of ₱9,500.00 for a period of 2
years from June 1, 1982;
f) Visayan Timber and Machinery Corp. – over a
parcel of land at Nawanaw, Mandaue City, for a
period of 2 years from June 1, 1987 and renewable
for another 12 years at an annual income of
₱4,000.00;
g) House lessees listed in Exhibit "13" with total
monthly rentals of ₱1,975.00 a month for the 24
lessees or ₱24,700.00 annually. (Exhs. "7" to "13")
The trial court rendered its Decision on 16 February 1994 in favor of
Eusebia. The dispositive portion of the Decision states:
In 1945, defendant Nicolas Retuya no longer lived with his
legitimate family and cohabited with defendant, Pacita
Villanueva, wherein defendant, Procopio Villanueva, is their
illegitimate son. Nicolas, then, was the only person who
received the income of the above-mentioned properties.
Defendant, Pacita Villanueva, from the time she started
living in concubinage with Nicolas, has no occupation, she
had no properties of her own from which she could derive
income.
In 1985, Nicolas suffered a stroke and cannot talk anymore,
cannot walk anymore and they have to raise him up in
order to walk. Natividad Retuya knew of the physical
condition of her father because they visited him at the
hospital. From the time defendant Nicolas Retuya suffered
a stroke on January 27, 1985 and until the present, it is
defendant Procopio Villanueva, one of Nicolas’ illegitimate
children who has been receiving the income of these
properties. Witness Natividad Retuya went to Procopio to
negotiate because at this time their father Nicolas was
already senile and has a childlike mind. She told defendant,
Procopio that their father was already incapacitated and
they had to talk things over and the latter replied that it
was not yet the time to talk about the matter.
Plaintiff, then, complained to the Barangay Captain for
reconciliation/mediation but no settlement was reached,
hence, the said official issued a certification to file action.
Written demands were made by plaintiff, through her
counsel, to the defendants, including the illegitimate family
asking for settlement but no settlement was reached by
the parties.
Further, plaintiff’s witness, Natividad Retuya, testified that
the parcel of land covered by tax declaration marked
Exhibit "T" was the property bought by her father from
Adriano Marababol for at the time of purchase of the
property, defendant Pacita Villanueva had no means of
livelihood (TSN, p. 6).
WHEREFORE, in view of the foregoing considerations,
judgment is rendered in favor of the plaintiff Eusebia
Napisa Retuya and against defendants Procopio Villanueva,
Nicolas Retuya and Pacita Villanueva:
1. Declaring the properties listed in paragraph 2 of
the amended complaint as conjugal properties of
the spouses plaintiff Eusebia Retuya and the
defendant Nicolas Retuya;
2. Ordering the transfer of the sole administration
of conjugal properties of the spouses Eusebia
Retuya and Nicolas Retuya in accordance with Art.
124 of the Family Code to the plaintiff Eusebia
Napisa Retuya;
3. Ordering defendant Procopio Villanueva to
account and turnover all proceeds or rentals or
income of the conjugal properties from January
27, 1985 when he took over as ‘administrator’
thereof and until he shall have ceased
administering the same in accordance with the
judgment of this Court;
4. Ordering defendants jointly and severally to
reconvey the parcel of land situated at Tipolo,
Mandaue City now in the name of defendant
Pacita Villanueva under tax dec. No. 01450 and
transfer the same into the names of the conjugal
partners Eusebia N. Retuya and Nicolas Retuya;
5. Ordering the City Assessor’s Office of Mandaue
City to cancel tax declaration No. 01450 in the
name of Pacita Villanueva and direct the issuance
of a new title and tax declaration in the names of
Eusebia Napisa Retuya and Nicolas Retuya;
6. Ordering defendants jointly and severally to
reconvey that certain building of strong materials
located at Tipolo, Mandaue City under tax dec. No.
01450 into the names of Eusebia Retuya and
Nicolas Retuya;
7. Ordering defendants jointly and severally to pay
plaintiff the sum of ₱50,000.00 by way of
attorney’s fees and expenses of litigation in the
sum of ₱5,000.00 plus the costs.
SO ORDERED.
Petitioners appealed the trial court’s decision to the Court of
Appeals. Eusebia died on 23 November 1996. Thereafter, Eusebia’s
heirs substituted her pursuant to the resolution of the Court of
Appeals dated 7 April 1997. The Court of Appeals eventually upheld
the Decision of the trial court but deleted the award of attorney’s
fees, ruling in this wise:
WHEREFORE, the decision dated February 16, 1994 is
AFFIRMED with the modification that the award of
attorney’s fees of ₱50,000.00 is deleted.
SO ORDERED.
Petitioners filed a Motion for Reconsideration on 23 February 2000
which the Court of Appeals denied in a Resolution dated 11 May
2000.
Hence, this petition.
The Trial Court’s Ruling
The trial court applied Article 116 of the Family Code, which reads:
Art. 116. All property acquired during the marriage,
whether the acquisition appears to have been made,
contracted or registered in the name of one or both
spouses, is presumed conjugal unless the contrary is
proved.
The trial court ruled that the documents and other evidence Eusebia
presented constitute "solid evidence" which proved that the subject
properties were acquired during her marriage with Nicolas. This
made the presumption in Article 116 applicable to the subject
properties. Thus, the trial court ruled that Eusebia had proved that
the subject properties are conjugal in nature. On the other hand,
the trial court found that petitioners failed to meet the standard of
proof required to maintain their claim that the subject properties
are paraphernal properties of Nicolas. The trial court added that
Pacita presented no "factual solidity" to support her claim that she
bought Lot No. 1522 exclusively with her own money.
The Court of Appeals’ Ruling
The Court of Appeals concurred with the findings of the trial court.
The appellate court found that Pacita failed to rebut the
presumption under Article 116 of the Family Code that the subject
properties are conjugal. The appellate court dismissed Pacita’s
defense of prescription and laches since she failed to have the issue
included in the pre-trial order after raising it in her answer with her
co-petitioners.
The Issues
Petitioners Nicolas, Pacita and Procopio contend that both the trial
and appellate courts erred in ruling in favor of Eusebia. They seek a
reversal and raise the following issues for resolution:
1. WHETHER THE COURT OF APPEALS ERRED IN
SUSTAINING THE DECLARATION OF THE TRIAL COURT THAT
THE PROPERTIES LISTED IN PARAGRAPH 2 OF THE
COMPLAINT ARE CONJUGAL PROPERTIES OF NICOLAS
RETUYA AND EUSEBIA RETUYA ALTHOUGH THIS WAS NOT
ONE OF THE CAUSES OF ACTION IN EUSEBIA’S COMPLAINT.
2. WHETHER THE COURT OF APPEALS ERRED IN APPLYING
THE PRESUMPTION THAT PROPERTIES ACQUIRED DURING
THE EXISTENCE OF THE MARRIAGE OF NICOLAS RETUYA
AND EUSEBIA RETUYA ARE CONJUGAL.
3. WHETHER THE COURT OF APPEALS ERRED IN NOT
APPLYING INSTEAD THE PRESUMPTION UNDER ARTICLE
148 OF THE FAMILY CODE IN FAVOR OF CO-OWNERSHIP
BETWEEN NICOLAS RETUYA AND PACITA VILLANUEVA.
4. WHETHER THE COURT OF APPEALS ERRED IN NOT
DECLARING THAT THE ACTION FOR RECONVEYANCE OVER
LOT NO. 152 IS ALREADY BARRED BY PRESCRIPTION OR
LACHES.3
The Ruling of the Court
The petition lacks merit.
First Issue: On the Alleged Failure
To Claim that the Properties are Conjugal
Petitioners’ contention that Eusebia’s complaint failed to state that
the subject properties are conjugal is absolutely without basis. A
cursory reading of the complaint readily shows that the complaint
maintains that the subject properties are conjugal.4 The first
sentence of the second paragraph of the complaint states:
2. The plaintiff Eusebia Retuya and defendant Nicolas
Retuya are husband and wife and conjugal owners of real
properties and all improvements thereon situated in
Mandaue City and Consolacion, Cebu more particularly
described as follows: (Emphasis added)
The same claim is restated and repleaded throughout the complaint.
Petitioners should know better than to clutter their appeal with
useless arguments such as this.
The other issues petitioners raise contest in essence the finding that
the subject properties are conjugal in nature. Apart from this, the
only other issue raised is whether prescription or laches bars
Eusebia’s complaint. We shall resolve first the issue of prescription
and laches.
Second Issue: Prescription and Laches
We agree with the Court of Appeals’ observation that while
petitioners did raise the issue of prescription and laches in their
Answer,5 they failed to have the same included in the pre-trial order
for consideration during the trial. Now, petitioners wish to raise the
issue on appeal by relying on Section 1, Rule 9 of the Rules of Court,
which provides:
Section 1. Defenses and objections not pleaded. – Defenses
and objections not pleaded either in a motion to dismiss or
in the answer are deemed waived. However, when it
appears from the pleadings or the evidence on record that
the court has no jurisdiction over the subject matter, that
there is another action pending between the same parties
for the same cause, or that the action is barred by a prior
judgment or by statute of limitations, the court shall
dismiss the claim.
Petitioners are mistaken.
The determination of issues during the pre-trial conference bars the
consideration of other questions, whether during trial or on
appeal.6 Section 1 of Rule 9 covers situations where a defense or
objection is not raised in a motion to dismiss or an answer. What we
have before us is the exact opposite. Here, petitioners in fact raised
in their answer the defense of prescription and laches. However,
despite raising the defense of prescription and laches in their
answer, petitioners failed to include this defense among the issues
for consideration during the trial. The non-inclusion of this defense
in the pre-trial order barred its consideration during the trial.
Clearly, Section 1 of Rule 9 does not apply to the present case.
Pre-trial is primarily intended to insure that the parties properly
raise all issues necessary to dispose of a case. 7 The parties must
disclose during pre-trial all issues they intend to raise during the
trial, except those involving privileged or impeaching
matters.8 Although a pre-trial order is not meant to catalogue each
issue that the parties may take up during the trial, issues not
included in the pre-trial order may be considered only if they are
impliedly included in the issues raised or inferable from the issues
raised by necessary implication.9 The basis of the rule is simple.
Petitioners are bound by the delimitation of the issues during the
pre-trial because they themselves agreed to the same.10
Petitioners argue that in past instances we have reviewed matters
raised for the first time during appeal. True, but we have done so
only by way of exception involving clearly meritorious
situations.11 This case does not fall under any of those exceptions.
The fact that the case proceeded to trial, with the petitioners
actively participating without raising the necessary objection, all the
more requires that they be bound by the stipulations they made at
the pre-trial.12 Petitioners were well aware that they raised the
defense of prescription and laches since they included it in their
answer. However, for reasons of their own, they did not include this
defense in the pre-trial.
Able counsels represented both parties. We see no claim that either
counsel erred or was negligent. This could only mean that
petitioners’ counsel chose to waive, or did not consider important,
the defense of prescription and laches. Petitioners are bound by
their counsel’s choice. Other than arguing that it is allowable to
raise the issue for the first time on appeal, we have no explanation
from petitioners why they suddenly decided to change their mind.
Parties are not allowed to flip-flop. Courts have neither the time nor
the resources to accommodate parties who choose to go to trial
haphazardly. Moreover, it would be grossly unfair to allow
petitioners the luxury of changing their mind to the detriment of
private respondents at this late stage. To put it simply, since
petitioners did not raise the defense of prescription and laches
during the trial, they cannot now raise this defense for the first time
on appeal.13
Third Issue: Whether the Subject Properties Are Conjugal
We proceed to the crux of this petition.
We reiterate the basic rule that a petition for review should only
cover questions of law.14 Questions of fact are not reviewable. The
exceptions apply only in the presence of extremely meritorious
circumstances.15 None exists in this case. We note with disfavor that
most of the issues raised in this petition are factual. We caution the
petitioners that this practice of deluging the Court with factual
issues in defiance of well-settled rule, in the hope of having them
reviewed, is unacceptable.
The only issue proper for resolution is the question of whether the
subject properties are conjugal. Petitioners claim that the subject
properties16 are exclusive properties of Nicolas except for Lot No.
152, which they claim is Pacita’s exclusive property. This issue is
easily resolved. The Family Code provisions on conjugal partnerships
govern the property relations between Nicolas and Eusebia even if
they were married before the effectivity of Family Code. 17Article
10518 of the Family Code explicitly mandates that the Family Code
shall apply to conjugal partnerships established before the Family
Code without prejudice to vested rights already acquired under the
Civil Code or other laws. Thus, under the Family Code, if the
properties are acquired during the marriage, the presumption is
that they are conjugal.19 The burden of proof is on the party
claiming that they are not conjugal.20 This is counter-balanced by
the requirement that the properties must first be proven to have
been acquired during the marriage before they are presumed
conjugal.21 Petitioners argue that Eusebia failed to prove this pre-
requisite. We disagree.
The question of whether the subject properties were acquired
during the marriage of Nicolas and Eusebia is a factual issue. Both
the trial and appellate courts agreed that the subject properties
were in fact acquired during the marriage of Nicolas and
Eusebia.22 The tax declarations23 covering the subject properties,
along with the unrebutted testimony of Eusebia’s witnesses,
establish this fact. We give due deference to factual findings of trial
courts,24 especially when affirmed by the appellate court. A reversal
of this finding can only occur if petitioners show sufficient reason for
us to doubt its correctness. Petitioners in the present case have not.
Moreover, on whether Lot No. 152 is conjugal or not, the answer
came from petitioners themselves. Nicolas and Eusebia were
married on 7 October 1926. Nicolas and Pacita started cohabiting in
1936. Eusebia died on 23 November 1996. Pacita and Nicolas were
married on 16 December 1996. Petitioners themselves admit that
Lot No. 152 was purchased on 4 October 1957.25 The date of
acquisition of Lot No. 152 is clearly during the marriage of Nicolas
and Eusebia.
Since the subject properties, including Lot No. 152, were acquired
during the marriage of Nicolas and Eusebia, the presumption under
Article 116 of the Family Code is that all these are conjugal
properties of Nicolas and Eusebia. The burden is on petitioners to
prove that the subject properties are not conjugal. The presumption
in Article 116, which subsists "unless the contrary is proved," stands
as an obstacle to any claim the petitioners may have. The burden of
proving that a property is exclusive property of a spouse rests on
the party asserting it and the evidence required must be clear and
convincing.26 Petitioners failed to meet this standard.
Petitioners point out that the deed of sale, the transfer certificate of
title and the tax declaration of Lot No. 152 are all in the name of
Pacita. Petitioners maintain that this can only mean that Pacita is
the real owner of Lot No. 152. We disagree. The totality of the
evidence reveals that this was merely just one of the several
schemes Nicolas employed to deprive Eusebia of their conjugal
property. Ironically, petitioners themselves submitted in evidence a
decision rendered by the Regional Trial Court of Cebu, Branch IV, in
Civil Case No. R-960227 involving the acquisition of Lot No. 152.
The decision in Civil Case No. R-9602 stated that Tranquiliana
Marababol Remulta testified that the one who offered to buy the lot
from her was none other than Nicolas Retuya.28 Tranquiliana
narrated that at first she refused to sign the deed of sale because
the buyer placed in the deed was Pacita and not Nicolas, her
understanding being that the buyer was Nicolas. We find that the
trial court in the present case correctly took into consideration the
decision in Civil Case No. R-9602.29 Considering that the decision in
Civil Case No. R-9602 has become final and executory, its findings of
fact involving the sale of Lot No. 152 to Nicolas and Pacita are
conclusive and binding on petitioners who introduced in evidence
the decision.
Petitioners also point out that all the other tax declarations
presented before the trial court are in the name of Nicolas alone.
Petitioners argue that this serves as proof of Nicolas’ exclusive
ownership of these properties. Petitioners are mistaken. The tax
declarations are not sufficient proof to overcome the presumption
under Article 116 of the Family Code. All property acquired by the
spouses during the marriage, regardless in whose name the
property is registered, is presumed conjugal unless proved
otherwise.30 The presumption is not rebutted by the mere fact that
the certificate of title of the property or the tax declaration is in the
name of one of the spouses only.31Article 116 of the Family Code
expressly provides that the presumption remains even if the
property is "registered in the name of one or both of the spouses."
In some of the documents that petitioners presented, Nicolas
misrepresented his civil status by claiming that he was single.
Petitioners point to this as proof of Nicolas’ desire to exclude
Eusebia from the properties covered by the
documents.32 Petitioners further claim that this supports their stand
that the subject properties are not conjugal. This argument is
baseless. Whether a property is conjugal or not is determined by
law and not by the will of one of the spouses. No unilateral
declaration by one spouse can change the character of conjugal
property. The clear intent of Nicolas in placing his status as single is
to exclude Eusebia from her lawful share in the conjugal property.
The law does not allow this.
Petitioners point out that Pacita had the means to buy Lot No. 152.
Even if Pacita had the financial capacity, this does not prove that
Pacita bought Lot No. 152 with her own money. To rebut the
presumption that Lot No. 152 is conjugal, petitioners must prove
that Pacita used her own money to pay for Lot No. 152. Petitioners
failed to prove this.
Petitioners further argue that since Nicolas and Pacita were already
cohabiting when Lot No. 152 was acquired, the lot cannot be
deemed conjugal property of Nicolas and Eusebia. Petitioners keep
belaboring this point in their petition and memorandum.
Petitioners’ argument is flawed.
The cohabitation of a spouse with another person, even for a long
period, does not sever the tie of a subsisting previous
marriage.33 Otherwise, the law would be giving a stamp of approval
to an act that is both illegal and immoral. What petitioners fail to
grasp is that Nicolas and Pacita’s cohabitation cannot work to the
detriment of Eusebia, the legal spouse. The marriage of Nicolas and
Eusebia continued to exist regardless of the fact that Nicolas was
already living with Pacita. Hence, all property acquired from 7
October 1926, the date of Nicolas and Eusebia’s marriage, until 23
November 1996, the date of Eusebia’s death, are still presumed
conjugal. Petitioners have neither claimed nor proved that any of
the subject properties was acquired outside or beyond this period.
Finally, petitioners’ reliance on Article 148 of the Family Code34 is
misplaced. A reading of Article 148 readily shows that there must be
proof of "actual joint contribution" by both the live-in partners
before the property becomes co-owned by them in proportion to
their contribution. The presumption of equality of contribution
arises only in the absence of proof of
their proportionate contributions, subject to the condition
that actual joint contribution is proven first. Simply put, proof of
actual contribution by both parties is required, otherwise there is no
co-ownership and no presumption of equal sharing. Petitioners
failed to show proof of actual contribution by Pacita in the
acquisition of Lot No. 152. In short, petitioners failed to prove that
Pacita bought Lot No. 152 with her own money, or that she actually
contributed her own money to acquire it.
WHEREFORE, we DENY the petition. The Decision of the Court of
Appeals dated 31 January 2000 in CA-G.R. CV No. 46716
is AFFIRMED.
SO ORDERED.
EN BANC
G.R. No. L-34583 October 22, 1931
THE BANK OF THE PHILIPPINE ISLANDS, administrator of the estate
of the late Adolphe Oscar Schuetze,plaintiff-appellant,
vs.
JUAN POSADAS, JR., Collector of Internal Revenue, defendant-
appellee.
Araneta, De Joya, Zaragoza and Araneta for appellant.
Attorney-General Jaranilla for appellee.
VILLA-REAL, J.:
The Bank of the Philippine Islands, as administrator of the estate of
the deceased Adolphe Oscar Schuetze, has appealed to this court
from the judgment of the Court of First Instance of Manila absolving
the defendant Juan Posadas, Jr., Collector of Internal Revenue, from
the complaint filed against him by said plaintiff bank, and dismissing
the complaint with costs.
The appellant has assigned the following alleged errors as
committed by the trial court in its judgment, to wit:
1. The lower court erred in holding that the testimony of
Mrs. Schuetze was inefficient to established the domicile of
her husband.
2. The lower court erred in holding that under section 1536
of the Administrative Code the tax imposed by the
defendant is lawful and valid.
3. The lower court erred in not holding that one-half (½) of
the proceeds of the policy in question is community
property and that therefore no inheritance tax can be
levied, at least on one-half (½) of the said proceeds.
4. The lower court erred in not declaring that it would be
unconstitutional to impose an inheritance tax upon the
insurance policy here in question as it would be a taking of
property without due process of law.
The present complaint seeks to recover from the defendant Juan
Posadas, Jr., Collector of Internal Revenue, the amount of P1,209
paid by the plaintiff under protest, in its capacity of administrator of
the estate of the late Adolphe Oscar Schuetze, as inheritance tax
upon the sum of P20,150, which is the amount of an insurance
policy on the deceased's life, wherein his own estate was named the
beneficiary.
At the hearing, in addition to documentary and parol evidence, both
parties submitted the following agreed statement of facts of the
court for consideration:
It is hereby stipulated and agreed by and between the
parties in the above-entitled action through their
respective undersigned attorneys:
1. That the plaintiff, Rosario Gelano Vda. de Schuetze,
window of the late Adolphe Oscar Schuetze, is of legal age,
a native of Manila, Philippine Islands, and is and was at all
times hereinafter mentioned a resident of Germany, and at
the time of the death of her husband, the late Adolphe
Oscar Schuetze, she was actually residing and living in
Germany;
2. That the Bank of the Philippine Islands, is and was at all
times hereinafter mentioned a banking institution duly
organized and existing under and by virtue of the laws of
the Philippine Islands;
3. That on or about August 23, 1928, the herein plaintiff
before notary public Salvador Zaragoza, drew a general
power appointing the above-mentioned Bank of the
Philippine Islands as her attorney-in-fact, and among the
powers conferred to said attorney-in-fact was the power to
represent her in all legal actions instituted by or against
her;
4. That the defendant, of legal age, is and at all times
hereinafter mentioned the duly appointed Collector of
Internal Revenue with offices at Manila, Philippine Islands;
5. That the deceased Adolphe Oscar Schuetze came to the
Philippine Islands for the first time of March 31, 1890, and
worked in the several German firms as a mere employee
and that from the year 1903 until the year 1918 he was
partner in the business of Alfredo Roensch;
6. That from 1903 to 1922 the said Adolphe Oscar Schuetze
was in the habit of making various trips to Europe;
7. That on December 3, 1927, the late Adolphe Oscar
Schuetze coming from Java, and with the intention of going
to Bremen, landed in the Philippine Islands where he met
his death on February 2, 1928;
8. That on March 31, 1926, the said Adolphe Oscar
Schuetze, while in Germany, executed a will, in accordance
with its law, wherein plaintiff was named his universal heir;
9. That the Bank of the Philippine Islands by order of the
Court of First Instance of Manila under date of May 24,
1928, was appointed administrator of the estate of the
deceased Adolphe Oscar Schuetze;
10. That, according to the testamentary proceedings
instituted in the Court of First Instance of Manila, civil case
No. 33089, the deceased at the time of his death was
possessed of not only real property situated in the
Philippine Islands, but also personal property consisting of
shares of stock in nineteen (19) domestic corporations;
11. That the fair market value of all the property in the
Philippine Islands left by the deceased at the time of his
death in accordance with the inventory submitted to the
Court of First Instance of Manila, civil case No. 33089, was
P217,560.38;
12. That the Bank of the Philippine Islands, as administrator
of the estate of the deceased rendered its final account on
June 19, 1929, and that said estate was closed on July 16,
1929;
13. That among the personal property of the deceased was
found life-insurance policy No. 194538 issued at Manila,
Philippine Islands, on January 14, 1913, for the sum of
$10,000 by the Sun Life Assurance Company of Canada,
Manila branch, a foreign corporation duly organized and
existing under and by virtue of the laws of Canada, and duly
authorized to transact business in the Philippine Islands;
14. That in the insurance policy the estate of the said
Adolphe Oscar Schuetze was named the beneficiary
without any qualification whatsoever;
15. That for five consecutive years, the deceased Adolphe
Oscar Schuetze paid the premiums of said policy to the Sun
Life Assurance Company of Canada, Manila branch;
16. That on or about the year 1918, the Sun Life Assurance
Company of Canada, Manila branch, transferred said policy
to the Sun Life Assurance Company of Canada, London
branch;
17. That due to said transfer the said Adolphe Oscar
Schuetze from 1918 to the time of his death paid the
premiums of said policy to the Sun Life Assurance Company
of Canada, London Branch;
18. That the sole and only heir of the deceased Adolphe
Oscar Schuetze is his widow, the plaintiff herein;
19. That at the time of the death of the deceased and at all
times thereafter including the date when the said insurance
policy was paid, the insurance policy was not in the hands
or possession of the Manila office of the Sun Life Assurance
Company of Canada, nor in the possession of the herein
plaintiff, nor in the possession of her attorney-in-fact the
Bank of the Philippine Islands, but the same was in the
hands of the Head Office of the Sun Life Assurance
Company of Canada, at Montreal, Canada;
20. That on July 13, 1928, the Bank of the Philippine Islands
as administrator of the decedent's estate received from the
Sun Life Assurance Company of Canada, Manila branch, the
sum of P20,150 representing the proceeds of the insurance
policy, as shown in the statement of income and expenses
of the estate of the deceased submitted on June 18, 1929,
by the administrator to the Court of First Instance of
Manila, civil case No. 33089;
21. That the Bank of the Philippine Islands delivered to the
plaintiff herein the said sum of P20,150;
22. That the herein defendant on or about July 5, 1929,
imposed an inheritance tax upon the transmission of the
proceeds of the policy in question in the sum of P20,150
from the estate of the late Adolphe Oscar Schuetze to the
sole heir of the deceased, or the plaintiff herein, which
inheritance tax amounted to the sum of P1,209;
23. That the Bank of the Philippine Islands as administrator
of the decedent's estate and as attorney-in-fact of the
herein plaintiff, having been demanded by the herein
defendant to pay inheritance tax amounting to the sum of
P1,209, paid to the defendant under protest the above-
mentioned sum;
24. That notwithstanding the various demands made by
plaintiff to the defendant, said defendant has refused and
refuses to refund to plaintiff the above mentioned sum of
P1,209;
25. That plaintiff reserves the right to adduce evidence as
regards the domicile of the deceased, and so the
defendant, the right to present rebuttal evidence;
26. That both plaintiff and defendant submit this
stipulation of facts without prejudice to their right to
introduce such evidence, on points not covered by the
agreement, which they may deem proper and necessary to
support their respective contentions.
In as much as one of the question raised in the appeal is whether an
insurance policy on said Adolphe Oscar Schuetze's life was, by
reason of its ownership, subject to the inheritance tax, it would be
well to decide first whether the amount thereof is paraphernal or
community property.
According to the foregoing agreed statement of facts, the estate of
Adolphe Oscar Schuetze is the sole beneficiary named in the life-
insurance policy for $10,000, issued by the Sun Life Assurance
Company of Canada on January 14, 1913. During the following five
years the insured paid the premiums at the Manila branch of the
company, and in 1918 the policy was transferred to the London
branch.
The record shows that the deceased Adolphe Oscar Schuetze
married the plaintiff-appellant Rosario Gelano on January 16, 1914.
With the exception of the premium for the first year covering the
period from January 14, 1913 to January 14, 1914, all the money
used for paying the premiums, i. e., from the second year, or
January 16, 1914, or when the deceased Adolphe Oscar Schuetze
married the plaintiff-appellant Rosario Gelano, until his death on
February 2, 1929, is conjugal property inasmuch as it does not
appear to have exclusively belonged to him or to his wife (art. 1407,
Civil Code). As the sum of P20,150 here in controversy is a product
of such premium it must also be deemed community property,
because it was acquired for a valuable consideration, during said
Adolphe Oscar Schuetze's marriage with Rosario Gelano at the
expense of the common fund (art. 1401, No. 1, Civil Code), except
for the small part corresponding to the first premium paid with the
deceased's own money.
In his Commentaries on the Civil Code, volume 9, page 589, second
edition, Manresa treats of life insurance in the following terms, to
wit:
The amount of the policy represents the premiums to be
paid, and the right to it arises the moment the contract is
perfected, for at the moment the power of disposing of it
may be exercised, and if death occurs payment may be
demanded. It is therefore something acquired for a
valuable consideration during the marriage, though the
period of its fulfillment, depend upon the death of one of
the spouses, which terminates the partnership. So
considered, the question may be said to be decided by
articles 1396 and 1401: if the premiums are paid with the
exclusive property of husband or wife, the policy belongs to
the owner; if with conjugal property, or if the money
cannot be proved as coming from one or the other of the
spouses, the policy is community property.
The Supreme Court of Texas, United States, in the case of Martin vs.
Moran (11 Tex. Civ. A., 509) laid down the following doctrine:
 COMMUNITY PROPERTY — LIFE INSURANCE POLICY. — A
husband took out an endowment life insurance policy on
his life, payable "as directed by will." He paid the premiums
thereon out of community funds, and by his will made the
proceeds of the policy payable to his own estate. Held, that
the proceeds were community estate, one-half of which
belonged to the wife.
In In re Stan's Estate, Myr. Prob. (Cal.), 5, the Supreme Court of
California laid down the following doctrine:
A testator, after marriage, took out an insurance policy, on
which he paid the premiums from his salary. Held that the
insurance money was community property, to one-half of
which, the wife was entitled as survivor.
In In re Webb's Estate, Myr. Prob. (Cal.), 93, the same court laid
down the following doctrine:
A decedent paid the first third of the amount of the
premiums on his life-insurance policy out of his earnings
before marriage, and the remainder from his earnings
received after marriage. Held, that one-third of the policy
belonged to his separate estate, and the remainder to the
community property.
Thus both according to our Civil Code and to the ruling of those
North American States where the Spanish Civil Code once governed,
the proceeds of a life-insurance policy whereon the premiums were
paid with conjugal money, belong to the conjugal partnership.
The appellee alleges that it is a fundamental principle that a life-
insurance policy belongs exclusively to the beneficiary upon the
death of the person insured, and that in the present case, as the late
Adolphe Oscar Schuetze named his own estate as the sole
beneficiary of the insurance on his life, upon his death the latter
became the sole owner of the proceeds, which therefore became
subject to the inheritance tax, citing Del Val vs. Del Val (29 Phil.,
534), where the doctrine was laid down that an heir appointed
beneficiary to a life-insurance policy taken out by the deceased,
becomes the absolute owner of the proceeds of such policy upon
the death of the insured.
The estate of a deceased person cannot be placed on the same
footing as an individual heir. The proceeds of a life-insurance policy
payable to the estate of the insured passed to the executor or
administrator of such estate, and forms part of its assets (37 Corpus
Juris, 565, sec. 322); whereas the proceeds of a life-insurance policy
payable to an heir of the insured as beneficiary belongs exclusively
to said heir and does not form part of the deceased's estate subject
to administrator. (Del Val vs. Del Val, supra; 37 Corpus Juris, 566,
sec. 323, and articles 419 and 428 of the Code of Commerce.)
Just as an individual beneficiary of a life-insurance policy taken out
by a married person becomes the exclusive owner of the proceeds
upon the death of the insured even if the premiums were paid by
the conjugal partnership, so, it is argued, where the beneficiary
named is the estate of the deceased whose life is insured, the
proceeds of the policy become a part of said estate upon the death
of the insured even if the premiums have been paid with conjugal
funds.
In a conjugal partnership the husband is the manager, empowered
to alienate the partnership property without the wife's consent (art.
1413, Civil Code), a third person, therefore, named beneficiary in a
life-insurance policy becomes the absolute owner of its proceeds
upon the death of the insured even if the premiums should have
been paid with money belonging to the community property. When
a married man has his life insured and names his own estate after
death, beneficiary, he makes no alienation of the proceeds of
conjugal funds to a third person, but appropriates them himself,
adding them to the assets of his estate, in contravention of the
provisions of article 1401, paragraph 1, of the Civil Code cited
above, which provides that "To the conjugal partnership belongs"
(1) Property acquired for a valuable consideration during the
marriage at the expense of the common fund, whether the
acquisition is made for the partnership or for one of the spouses
only." Furthermore, such appropriation is a fraud practised upon the
wife, which cannot be allowed to prejudice her, according to article
1413, paragraph 2, of said Code. Although the husband is the
manager of the conjugal partnership, he cannot of his own free will
convert the partnership property into his own exclusive property.
As all the premiums on the life-insurance policy taken out by the
late Adolphe Oscar Schuetze, were paid out of the conjugal funds,
with the exceptions of the first, the proceeds of the policy, excluding
the proportional part corresponding to the first premium, constitute
community property, notwithstanding the fact that the policy was
made payable to the deceased's estate, so that one-half of said
proceeds belongs to the estate, and the other half to the deceased's
widow, the plaintiff-appellant Rosario Gelano Vda. de Schuetze.
The second point to decide in this appeal is whether the Collector of
Internal Revenue has authority, under the law, to collect the
inheritance tax upon one-half of the life-insurance policy taken out
by the late Adolphe Oscar Schuetze, which belongs to him and is
made payable to his estate.
According to the agreed statement of facts mentioned above, the
plaintiff-appellant, the Bank of the Philippine Islands, was appointed
administrator of the late Adolphe Oscar Schuetze's testamentary
estate by an order dated March 24, 1928, entered by the Court of
First Instance of Manila. On July 13, 1928, the Sun Life Assurance
Company of Canada, whose main office is in Montreal, Canada, paid
Rosario Gelano Vda. de Schuetze upon her arrival at Manila, the
sum of P20,150, which was the amount of the insurance policy on
the life of said deceased, payable to the latter's estate. On the same
date Rosario Gelano Vda. de Schuetze delivered the money to said
Bank of the Philippine Islands, as administrator of the deceased's
estate, which entered it in the inventory of the testamentary estate,
and then returned the money to said widow.
Section 1536 of the Administrative Code, as amended by section 10
of Act No. 2835 and section 1 of Act No. 3031, contains the
following relevant provision:
SEC. 1536. Conditions and rate of taxation. — Every
transmission by virtue of inheritance, devise, bequest,
gift mortis causa or advance in anticipation of inheritance,
devise, or bequest of real property located in the Philippine
Islands and real rights in such property; of any franchise
which must be exercised in the Philippine Islands; of any
shares, obligations, or bonds issued by any corporation
or sociedad anonima organized or constituted in the
Philippine Islands in accordance with its laws; of any shares
or rights in any partnership, business or industry
established in the Philippine Islands or of any personal
property located in the Philippine Islands shall be subject to
the following tax:
 xxx xxx xxx
In as much as the proceeds of the insurance policy on the life of the
late Adolphe Oscar Schuetze were paid to the Bank of the Philippine
Islands, as administrator of the deceased's estate, for management
and partition, and as such proceeds were turned over to the sole
and universal testamentary heiress Rosario Gelano Vda. de
Schuetze, the plaintiff-appellant, here in Manila, the situs of said
proceeds is the Philippine Islands.
In his work "The Law of Taxation," Cooley enunciates the general
rule governing the levying of taxes upon tangible personal property,
in the following words:
GENERAL RULE. — The suits of tangible personal property,
for purposes of taxation may be where the owner is
domiciled but is not necessarily so. Unlike intangible
personal property, it may acquire a taxation situs in a state
other than the one where the owner is domiciled, merely
because it is located there. Its taxable situs is where it is
more or less permanently located, regardless of the
domicile of the owner. It is well settled that the state
where it is more or less permanently located has the power
to tax it although the owner resides out of the state,
regardless of whether it has been taxed for the same
period at the domicile of the owner, provided there is
statutory authority for taxing such property. It is equally
well settled that the state where the owner is domiciled
has no power to tax it where the property has acquired an
actual situs in another state by reason of its more or less
permanent location in that state. ... (2 Cooley, The Law of
Taxation, 4th ed., p. 975, par. 451.)
With reference to the meaning of the words "permanent" and "in
transit," he has the following to say:
PERMANENCY OF LOCATION; PROPERTY IN TRANSIT. — In
order to acquire a situs in a state or taxing district so as to
be taxable in the state or district regardless of the domicile
of the owner and not taxable in another state or district at
the domicile of the owner, tangible personal property must
be more or less permanently located in the state or district.
In other words, the situs of tangible personal property is
where it is more or less permanently located rather than
where it is merely in transit or temporarily and for no
considerable length of time. If tangible personal property is
more or less permanently located in a state other than the
one where the owner is domiciled, it is not taxable in the
latter state but is taxable in the state where it is located. If
tangible personal property belonging to one domiciled in
one state is in another state merely in transitu or for a
short time, it is taxable in the former state, and is not
taxable in the state where it is for the time being. . . . .
Property merely in transit through a state ordinarily is not
taxable there. Transit begins when an article is committed
to a carrier for transportation to the state of its destination,
or started on its ultimate passage. Transit ends when the
goods arrive at their destination. But intermediate these
points questions may arise as to when a temporary stop in
transit is such as to make the property taxable at the place
of stoppage. Whether the property is taxable in such a case
usually depends on the length of time and the purpose of
the interruption of transit. . . . .
. . . It has been held that property of a construction
company, used in construction of a railroad, acquires a
situs at the place where used for an indefinite period. So
tangible personal property in the state for the purpose of
undergoing a partial finishing process is not to be regarded
as in the course of transit nor as in the state for a mere
temporary purpose. (2 Cooley, The Law of Taxation, 4th
ed., pp. 982, 983 and 988, par. 452.)
If the proceeds of the life-insurance policy taken out by the late
Adolphe Oscar Schuetze and made payable to his estate, were
delivered to the Bank of the Philippine Islands for administration
and distribution, they were not in transit but were more or less
permanently located in the Philippine Islands, according to the
foregoing rules. If this be so, half of the proceeds which is
community property, belongs to the estate of the deceased and is
subject to the inheritance tax, in accordance with the legal provision
quoted above, irrespective of whether or not the late Adolphe Oscar
Schuetze was domiciled in the Philippine Islands at the time of his
death.
By virtue of the foregoing, we are of opinion and so hold: (1) That
the proceeds of a life-insurance policy payable to the insured's
estate, on which the premiums were paid by the conjugal
partnership, constitute community property, and belong one-half to
the husband and the other half to the wife, exclusively; (2) that if
the premiums were paid partly with paraphernal and partly conjugal
funds, the proceeds are likewise in like proportion paraphernal in
part and conjugal in part; and (3) that the proceeds of a life-
insurance policy payable to the insured's estate as the beneficiary, if
delivered to the testamentary administrator of the former as part of
the assets of said estate under probate administration, are subject
to the inheritance tax according to the law on the matter, if they
belong to the assured exclusively, and it is immaterial that the
insured was domiciled in these Islands or outside.1awphil.net
Wherefore, the judgment appealed from is reversed, and the
defendant is ordered to return to the plaintiff the one-half of the tax
collected upon the amount of P20,150, being the proceeds of the
insurance policy on the life of the late Adolphe Oscar Schuetze, after
deducting the proportional part corresponding to the first premium,
without special pronouncement of costs. So ordered.
Avanceña, C.J., Johnson, Street, Malcolm, Villamor, and Ostrand, JJ.,
concur.
Separate Opinions
IMPERIAL, J., dissenting:
I cannot concur with the majority in holding that one-half of the
insurance policy on the life of the late Adolphe Oscar Schuetze,
excepting the proportional part corresponding to the first year's
premium is community property belonging to the deceased's
widow, named Rosario Gelano, and as such is not subject to the
inheritance tax.
There is no question in regard to the facts: It is admitted that
Schuetze insured himself in the Sun Life Insurance Company of
Canada in Manila, and that the policy was issued on January 14,
1913, payable to his estate after death. He died in Manila on
February 2, 1928, leaving his widow as his sole testamentary
heiress. The appellant, the Bank of the Philippine Islands, as
administrator of the late Schuetze's testamentary estate, received
from the insurer the amount of this policy, or the net sum of
P20,150.
It is an established and generally recognized principle that in a life-
insurance policy where the insured has named a beneficiary, the
proceeds belong to said beneficiary, and to him alone. "Vested
Interest of Beneficiary. — In practically every jurisdiction it is the
rule that in an ordinary life insurance policy made payable to a
beneficiary, and which does not authorize a change of beneficiary,
the named beneficiary has an absolute, vested interest in the policy
from the date of its issuance, delivery and acceptance, and this is
true of a policy payable to the children of the insured equally,
without naming them, or their executors, administrators or assigns."
(14 R.C.L., 1376.) (Del Val vs. Del Val, 29 Phil., 534 et seq.; Gercio vs.
Sun Life Assurance Co. of Canada, 48 Phil., 53 et seq.) When in a life-
insurance policy the insured's estate is named beneficiary, the
proceeds must be delivered not to the decedent's heirs, but to his
administrator or legal representative. "Policy Payable to Insured, His
Estate, or Legal Representatives. ... Ordinarily the proceeds of a life
insurance policy are payable to the executor or administrator of
insured as assets of his estate where by the terms of the policy the
proceeds are payable to insured, his estate, his legal
representatives, his executors or administrators, his "executors,
administrators, or assigns," or even his "heirs, executors,
administrators, or assigns." ..." (37 C.J., 565.) "Personal
Representatives or Legal Representatives. — While there is some
authority to the effect that "legal representatives" means the
persons entitled to the estate of the insured, and not his executor or
administrator, the better view is that ordinarily the proceeds of such
a policy pass to his executor or administrator." (14 R.C.L., 1372.)
If the foregoing are the principles which should govern life-
insurance policies with reference to beneficiaries and the right to
the proceeds of such policies, it is evident that Schuetze's estate,
and not his widow or the conjugal partnership, is entitled to the
proceeds of said policy exclusively, and may receive them from the
insurer. The parties must have so understood it when the insurer
delivered the net amount of the policy to the Bank of the Philippine
Islands, as judicial administrator of the insured.
It is stated in the majority opinion that the money with which the
premiums were paid during the marriage of the Schuetzes is
presumed to have been taken from the conjugal funds, according to
article 1407 of the Civil Code, which provides that "All the property In my opinion the judgment appealed from should have been
of the spouses shall be deemed partnership property in the absence affirmed in its entirely.
of proof that it belongs exclusively to the husband or to the wife."
This is the very argument which led to the settlement of the point of
law raised. The provisions of the Civil Code on conjugal property
have been improperly applied without considering that a life-
insurance contract is a peculiar contract governed by special laws,
such as Act No. 2427 with its amendments, and the Code of
Commerce, which is still in force. In Del Val, supra, it was already
held:
We cannot agree with these contentions. The contract of
life insurance is a special contract and the destination of
the proceeds thereof is determined by special laws which
deal exclusively with that subject. The Civil Code has no
provisions which relate directly and specially to life
insurance contracts or to the destination of life insurance
proceeds. That subject is regulated exclusively by the Code
of Commerce which provides for the terms of the contract,
the relations of the parties and the destination of the
proceeds of the policy.
The main point to be decided was not whether the premiums were
paid out of conjugal or personal funds of one of the spouses, but
whether or not the proceeds of the policy became assets of the
insured's estate. If it be admitted that the estate is the sole owner of
the aforesaid proceeds, which cannot be denied, inasmuch as the
policy itself names the estate as the beneficiary, it is beside the
point to discuss the nature and origin of the amounts used to pay
the premiums, as the title to the proceeds of the policy is vested in
the insured's estate, and any right the widow might have should be
vindicated in another action. In such a case she might be entitled to
reimbursement of her share in the conjugal funds, but not in the
present case, for she has been instituted the sole testamentary
heiress.
From the foregoing, it follows that as the proceeds of the policy
belong to Schuetze's estate, and inasmuch as the inheritance tax is
levied upon the transmission of a deceased person's estate upon,
or, on the occasion of his death, it is clear that the whole proceeds,
and not one-half thereof, are subject to such tax.
FIRST DIVISION
G.R. No. L-55322 February 16, 1989
MOISES JOCSON, petitioner,
vs.
HON. COURT OF APPEALS, AGUSTINA JOCSON-VASQUEZ, ERNESTO
VASQUEZ, respondents.
Dolorfino and Dominguez Law Officers for petitioner.
Gabriel G. Mascardo for private respondents.
MEDIALDEA, J.:
This is a petition for review on certiorari under Rule 45 of the Rules
of Court of the decision of the Court of Appeals in CA- G.R. No.
63474, promulgated on April 30, 1980, entitled "MOISES JOCSON,
plaintiff-appellee, versus AGUSTINA JOCSON-VASQUEZ and
ERNESTO VASQUEZ, defendant-appellants," upholding the validity of
three (3) documents questioned by Moises Jocson, in total reversal
of the decision of the then Court of First Instance of Cavite, Branch I,
which declared them as null and void; and of its resolution, dated
September 30, 1980, denying therein appellee's motion for
reconsideration.
Petitioner Moises Jocson and respondent Agustina Jocson-Vasquez
are the only surviving offsprings of the spouses Emilio Jocson and
Alejandra Poblete, while respondent Ernesto Vasquez is the
husband of Agustina. Alejandra Poblete predeceased her husband
without her intestate estate being settled. Subsequently, Emilio
Jocson also died intestate on April 1, 1972.
As adverted to above, the present controversy concerns the validity
of three (3) documents executed by Emilio Jocson during his
lifetime. These documents purportedly conveyed, by sale, to
Agustina Jocson-Vasquez what apparently covers almost all of his
properties, including his one-third (1/3) share in the estate of his
wife. Petitioner Moises Jocson assails these documents and prays
that they be declared null and void and the properties subject
matter therein be partitioned between him and Agustina as the only
heirs of their deceased parents.
The documents, which were presented as evidence not by Moises
Jocson, as the party assailing its validity, but rather by herein
respondents, are the following:
1) "Kasulatan ng Bilihan ng Lupa," marked as
Exhibit 3 (pp. 12-13, Records) for the defendant in
the court a quo, dated July 27, 1968. By this
document Emilio Jocson sold to Agustina Jocson-
Vasquez six (6) parcels of land, all located at Naic,
Cavite, for the sum of ten thousand P10,000.00
pesos. On the same document Emilio Jocson
acknowledged receipt of the purchase price, thus:
Na ngayon, alang-alang sa halagang SAMPUNG
LIBONG PISO (P10,000) salaping Pilipino na aking
tinanggap ng buong kasiyahan loob at ang
pagkakatanggap ay aking hayagang inaamin sa
pamamagitan ng kasulatang ito, sa aking anak na
si Agustina Jocson, na may sapat na gulang,
mamamayang Pilipino, asawa ni Ernesto Vasquez,
at naninirahan sa Poblacion, Naic, Cavite, ay aking
ipinagbile ng lubusan at kagyat at walang ano
mang pasubali ang nabanggit na anim na pirasong
lupa na nasa unang dahon ng dokumentong ito, sa
nabanggit na Agustina Jocson, at sa kaniyang
tagapagmana o makakahalili at gayon din nais
kong banggitin na kahit na may kamurahan ang
ginawa kong pagbibile ay dahilan sa ang nakabile
ay aking anak na sa akin at mapaglingkod,
madamayin at ma-alalahanin, na tulad din ng isa
ko pang anak na lalaki. Ang kuartang tinanggap ko
na P10,000.00, ay gagamitin ko sa aking katandaan
at mga huling araw at sa aking mga ibang
mahahalagang pangangailangan. [Emphasis
supplied]
Na nais ko ring banggitin na ang ginawa kong ito
ay hindi labag sa ano mang batas o kautusan,
sapagkat ang aking pinagbile ay akin at nasa aking
pangalan. Ang mga lupang nasa pangalan ng aking
nasirang asawa ay hindi ko ginagalaw ni
pinakikialaman at iyon ay dapat na hatiin ng
dalawa kong anak alinsunod sa umiiral na batas (p.
13, Records.)
2) "Kasulatan ng Ganap na Bilihan,"dated July
27,1968, marked as Exhibit 4 (p. 14, Records). On
the face of this document, Emilio Jocson
purportedly sold to Agustina Jocson-Vasquez, for
the sum of FIVE THOUSAND (P5,000.00) PESOS,
two rice mills and a camarin (camalig) located at
Naic, Cavite. As in the first document, Moises
Jocson acknowledged receipt of the purchase
price:
'Na alang-alang sa halagang LIMANG LIBONG PISO
(P5,000.00) salaping Pilipino na aking tinanggap ng
buong kasiyahan loob sa aking anak na Agustina
Jocson .... Na ang halagang ibinayad sa akin ay may
kamurahan ng kaunti ngunit dahil sa malaking
pagtingin ko sa kaniya ... kaya at pinagbile ko sa
kaniya ang mga nabanggit na pagaari kahit na
hindi malaking halaga ... (p. 14, Records).
3) Lastly, the "Deed of Extrajudicial Partition and
Adjudication with Sale, "dated March 9, 1969,
marked as Exhibit 2 (p. 10-11, Records), whereby
Emilio Jocson and Agustina Jocson-Vasquez,
without the participation and intervention of
Moises Jocson, extrajudicially partitioned the
unsettled estate of Alejandra Poblete, dividing the
same into three parts, one-third (1/3) each for the
heirs of Alejandra Poblete, namely: Emilio Jocson,
Agustina Jocson-Vasquez and Moises Jocson. By
the same instrument, Emilio sold his one- third
(1/3) share to Agustin for the sum of EIGHT
THOUSAND (P8,000.00) PESOS. As in the preceding
documents, Emilio Jocson acknowledged receipt
of the purchase price:
Now for and in consideration of the sum of only
eight thousand (P8,000.00) pesos, which I, the
herein Emilio Jocson had received from my
daughter Agustina Jocson, do hereby sell, cede,
convey and transfer, unto the said Agustina
 Jocson, her heirs and assigns, administrators and
successors in interests, in the nature of absolute
and irrevocable sale, all my rights, interest, shares
and participation, which is equivalent to one third
(1/3) share in the properties herein mentioned
and described the one third being adjudicated
unto Agustina Jocson and the other third (1/3)
portion being the share of Moises Jocson. (p. 11,
Records).
These documents were executed before a notary public. Exhibits 3
and 4 were registered with the Office of the Register of Deeds of
Cavite on July 29, 1968 and the transfer certificates of title covering
the properties therein in the name of Emilio Jocson, married to
Alejandra Poblete," were cancelled and new certificates of title were
issued in the name of Agustina Jocson-Vasquez. Exhibit 2 was not
registered with the Office of the Register of Deeds.
Herein petitioner filed his original complaint (Record on Appeal, p.
27, Rollo) on June 20,1973 with the then Court of First Instance of
Naic, Cavite (docketed as Civil Case No. TM- 531), and which was
twice amended. In his Second Amended Complaint (pp. 47-58,
Record on Appeal), herein petitioner assailed the above documents,
as aforementioned, for being null and void.
It is necessary to partly quote the allegation of petitioner in his
complaint for the reason that the nature of his causes of action is at
issue, thus:
8. [With regard the first document, that] the
defendants, through fraud, deceit, undue pressure
and influence and other illegal machinations, were
able to induce, led, and procured their father ... to
sign [the] contract of sale ..., for the simulated
price of P10,000.00, which is a consideration that
is shocking to the conscience of ordinary man and
despite the fact that said defendants have no work
or livelihood of their own ...; that the sale is null
and void, also, because it is fictitious, simulated
and fabricated contract x x x (pp. 52-53, Record on
Appeal). [Emphasis supplied]
xxx xxx xxx
12. [With regards the second and third document,
that they] are null and void because the consent of
the father, Emilio Jocson, was obtained with fraud,
deceit, undue pressure, misrepresentation and
unlawful machinations and trickeries committed
by the defendant on him; and that the said
contracts are simulated, fabricated and
fictitious, having been made deliberately to
exclude the plaintiff from participating and with
the dishonest and selfish motive on the part of the
defendants to defraud him of his legitimate share
on said properties [subject matter thereof]; and
that without any other business or employment or
any other source of income, defendants who were
just employed in the management and
administration of the business of their parents,
would not have the sufficient and ample means to
purchase the said properties except by getting the
earnings of the business or by simulated
consideration ... (pp. 54-55, Record on Appeal).
[Emphasis supplied]
Petitioner explained that there could be no real sale between a
father and daughter who are living under the same roof, especially
so when the father has no need of money as the properties
supposedly sold were all income-producing. Further, petitioner
claimed that the properties mentioned in Exhibits 3 and 4 are the
unliquidated conjugal properties of Emilio Jocson and Alejandra
Poblete which the former, therefore, cannot validly sell (pp. 53, 57,
Record on Appeal). As far as Exhibit 2 is concerned, petitioner
questions not the extrajudicial partition but only the sale by his
father to Agustina of the former's 1/3 share (p. 13, Rollo).
The trial court sustained the foregoing contentions of petitioner (pp.
59-81, Record on Appeal). It declared that the considerations
mentioned in the documents were merely simulated and fictitious
because: 1) there was no showing that Agustina Jocson-Vasquez
paid for the properties; 2) the prices were grossly inadequate which
is tantamount to lack of consideration at all; and 3) the
improbability of the sale between Emilio Jocson and Agustina
Jocson-Vasquez, taking into consideration the circumstances
obtaining between the parties; and that the real intention of the
parties were donations designed to exclude Moises Jocson from
participating in the estate of his parents. It further declared the
properties mentioned in Exhibits 3 and 4 as conjugal properties of
Emilio Jocson and Alejandra Poblete, because they were registered
in the name of "Emilio Jocson, married to Alejandra Poblete" and
ordered that the properties subject matter of all the documents be
registered in the name of herein petitioners and private
respondents.
On appeal, the Court of Appeals in CA-G.R. No. 63474-R rendered a
decision (pp. 29-42, Rollo) and reversed that of the trial court's and
ruled that:
1. That insofar as Exhibits 3 and 4 are concerned
the appellee's complaint for annulment, which is
indisputably based on fraud, and undue influence,
is now barred by prescription, pursuant to the
settled rule that an action for annulment of a
contract based on fraud must be filed within four
(4) years, from the discovery of the fraud, ... which
in legal contemplation is deemed to be the date of
the registration of said document with the
Register of Deeds ... and the records admittedly
show that both Exhibits 3 and 4, were all
registered on July 29, 1968, while on the other
hand, the appellee's complaint was filed on June
20, 1973, clearly beyond the aforesaid four-year
prescriptive period provided by law;
2. That the aforesaid contracts, Exhibits 2, 3, and
4, are decisively not simulated or fictitious
contracts, since Emilio Jocson actually and really
intended them to be effective and binding against
him, as to divest him of the full dominion and
ownership over the properties subject of said
assailed contracts, as in fact all his titles over the
same were all cancelled and new ones issued to
appellant Agustina Jocson-Vasquez ...;
3. That in regard to Exhibit 2, the same is valid and
subsisting, and the partition with sale therein
made by and between Emilio Jocson and Agustina
Jocson-Vasquez, affecting the 2/3 portion of the
subject properties described therein have all been
 made in accordance with Article 996 of the New
Civil Code on intestate succession, and the
appellee's (herein petitioner) remaining 1/3 has
not been prejudiced (pp. 41-42, Rollo).
In this petition for review, Moises Jocson raised the following
assignments of errors:
1. HAS THE RESPONDENT COURT OF APPEALS
ERRED IN CONCLUDING THAT THE SUIT FOR THE
ANNULMENT OF CONTRACTS FILED BY
PETITIONERS WITH THE TRIAL COURT IS "BASED
ON FRAUD" AND NOT ON ITS INEXISTENCE AND
NULLITY BECAUSE OF IT'S BEING SIMULATED OR
FICTITIOUS OR WHOSE CAUSE IS CONTRARY TO
LAW, MORALS AND GOOD CUSTOMS?
II. HAS THE RESPONDENT COURT OF APPEALS
ERRED IN CONCLUDING THAT THE COMPLAINT
FILED BY PETITIONER IN THE TRIAL COURT IS
BARRED BY PRESCRIPTION?
III. HAS THE RESPONDENT COURT OF APPEALS
ERRED IN NOT DECLARING AS INEXISTENT AND
NULL AND VOID THE CONTRACTS IN QUESTION
AND IN REVERSING THE DECLARING DECISION OF
THE TRIAL COURT? (p. 2, Rollo)
I.
The first and second assignments of errors are related and shall be
jointly discussed.
According to the Court of Appeals, herein petitioner's causes of
action were based on fraud. Under Article 1330 of the Civil Code, a
contract tainted by vitiated consent, as when consent was obtained
through fraud, is voidable; and the action for annulment must be
brought within four years from the time of the discovery of the
fraud (Article 1391, par. 4, Civil Code), otherwise the contract may
no longer be contested. Under present jurisprudence, discovery of
fraud is deemed to have taken place at the time the convenant was
registered with the Register of Deeds (Gerona vs. De Guzman, No. L-
19060, May 29,1964, 11 SCRA 153). Since Exhibits 3 and 4 were
registered on July 29, 1968 but Moises Jocson filed his complaint
only on June 20, 1973, the Court of Appeals ruled that insofar as
these documents were concerned, petitioner's "annulment suit" had
prescribed.
If fraud were the only ground relied upon by Moises Jocson in
assailing the questioned documents, We would have sustained the
above pronouncement. But it is not so. As pointed out by petitioner,
he further assailed the deeds of conveyance on the ground that they
were without consideration since the amounts appearing thereon as
paid were in fact merely simulated.
According to Article 1352 of the Civil Code, contracts without cause
produce no effect whatsoever. A contract of sale with a simulated
price is void (Article 1471; also Article 1409 [3]]), and an action for
the declaration of its nullity does not prescribe (Article 1410, Civil
Code; See also, Castillo v. Galvan, No. L-27841, October 20, l978, 85
SCRA 526). Moises Jocsons saction, therefore, being for the judicial
declaration of nullity of Exhibits 3 and 4 on the ground of simulated
price, is imprescriptible.
II.
For petitioner, however, the above discussion may be purely
academic. The burden of proof in showing that contracts lack
consideration rests on he who alleged it. The degree of proof
becomes more stringent where the documents themselves show
that the vendor acknowledged receipt of the price, and more so
where the documents were notarized, as in the case at bar. Upon
consideration of the records of this case, We are of the opinion that
petitioner has not sufficiently proven that the questioned
documents are without consideration.
Firstly, Moises Jocson's claim that Agustina Jocson-Vasquez had no
other source of income other than what she derives from helping in
the management of the family business (ricefields and ricemills),
and which was insufficient to pay for the purchase price, was
contradicted by his own witness, Isaac Bagnas, who testified that
Agustina and her husband were engaged in the buy and sell of palay
and rice (p. 10, t.s.n., January 14, 1975). Amazingly, petitioner
himself and his wife testified that they did not know whether or not
Agustina was involved in some other business (p. 40, t.s.n., July 30,
1974; p. 36, t.s.n., May 24, 1974).
On the other hand, Agustina testified that she was engaged in the
business of buying and selling palay and rice even before her
marriage to Ernesto Vasquez sometime in 1948 and continued doing
so thereafter (p. 4, t.s.n., March 15, 1976). Considering the
foregoing and the presumption that a contract is with a
consideration (Article 1354, Civil Code), it is clear that petitioner
miserably failed to prove his allegation.
Secondly, neither may the contract be declared void because of
alleged inadequacy of price. To begin with, there was no showing
that the prices were grossly inadequate. In fact, the total purchase
price paid by Agustina Jocson-Vasquez is above the total assessed
value of the properties alleged by petitioner. In his Second
Amended Complaint, petitioner alleged that the total assessed value
of the properties mentioned in Exhibit 3 was P8,920; Exhibit 4,
P3,500; and Exhibit 2, P 24,840, while the purchase price paid was
P10,000, P5,000, and P8,000, respectively, the latter for the 1/3
share of Emilio Jocson from the paraphernal properties of his wife,
Alejandra Poblete. And any difference between the market value
and the purchase price, which as admitted by Emilio Jocson was only
slight, may not be so shocking considering that the sales were
effected by a father to her daughter in which case filial love must be
taken into consideration (Alsua-Betts vs. Court of Appeals, No. L-
46430-31, April 30, 1979, 92 SCRA 332).
Further, gross inadequacy of price alone does not affect a contract
of sale, except that it may indicate a defect in the consent, or that
the parties really intended a donation or some other act or contract
(Article 1470, Civil Code) and there is nothing in the records at all to
indicate any defect in Emilio Jocson's consent.
Thirdly, any discussion as to the improbability of a sale between a
father and his daughter is purely speculative which has no relevance
to a contract where all the essential requisites of consent, object
and cause are clearly present.
There is another ground relied upon by petitioner in assailing
Exhibits 3 and 4, that the properties subject matter therein are
conjugal properties of Emilio Jocson and Alejandra Poblete. It is the
position of petitioner that since the properties sold to Agustina
Jocson-Vasquez under Exhibit 3 were registered in the name of
"Emilio Jocson, married to Alejandra Poblete," the certificates of
title he presented as evidence (Exhibits "E', to "J', pp. 4-9, Records)
were enough proof to show that the properties covered therein
were acquired during the marriage of their parents, and, therefore,
under Article 160 of the Civil Code, presumed to be conjugal
properties.
Article 160 of the Civil Code provides that:
All property of the marriage is presumed to belong
to the conjugal partnership, unless it be proved
that it pertains exclusively to the husband or to
the wife.
In Cobb-Perez vs. Hon. Gregorio Lantin, No. L-22320, May 22, 1968,
23 SCRA 637, 644, We held that:
Anent their claim that the shares in question are
conjugal assets, the spouses Perez adduced not a
modicum of evidence, although they repeatedly
invoked article 160 of the New Civil Code which
provides that ... . As interpreted by this Court, the
party who invokes this presumption must first
prove that the property in controversy was
acquired during the marriage. In other words,
proof of acquisition during the coverture is a
condition sine qua non for the operation of the
presumption in favor of conjugal ownership. Thus
in Camia de Reyes vs. Reyes de Ilano [62 Phil. 629,
639], it was held that "according to law and
jurisprudence, it is sufficient to prove that the
Property was acquired during the marriage in
order that the same may be deemed conjugal
property." In the recent case of Maramba vs.
Lozano, et. al. [L-21533, June 29, 1967, 20 SCRA
474], this Court, thru Mr. Justice Makalintal,
reiterated that "the presumption under Article 160
of the Civil Code refers to property acquired
during the marriage," and then concluded that
since "there is no showing as to when the property
in question was acquired...the fact that the title is
in the wife's name alone is determinative."
Similarly, in the case at bar, since there is no
evidence as to when the shares of stock were
acquired, the fact that they are registered in the
name of the husband alone is an indication that therefore, presumed conjugal, without the adverse party having
the shares belong exclusively to said spouse.' presented proof to rebut the presumption (See Mendoza vs- Reyes,
No. L-31618, August 17, 1983, 124 SCRA 154).
This pronouncement was reiterated in the case of Ponce de Leon vs.
Rehabilitation Finance Corporation, No. L-24571, December 18, In the instant case, had petitioner, Moises Jocson, presented
1970, 36 SCRA 289, and later in Torela vs. Torela, No. 1,27843, sufficient proof to show that the disputed properties were acquired
October 11, 1979, 93 SCRA 391. during his parents' coverture. We would have ruled that the
properties, though registered in the name of Emilio Jocson alone,
It is thus clear that before Moises Jocson may validly invoke the are conjugal properties in view of the presumption under Article
presumption under Article 160 he must first present proof that the 160. There being no such proof, the condition sine qua non for the
disputed properties were acquired during the marriage of Emilio application of the presumption does not exist. Necessarily, We rule
Jocson and Alejandra Poblete. The certificates of title, however, that the properties under Exhibit 3 are the exclusive properties of
upon which petitioner rests his claim is insufficient. The fact that the Emilio Jocson.
properties were registered in the name of "Emilio Jocson, married to
Alejandra Poblete" is no proof that the properties were acquired There being no showing also that the camarin and the two ricemills,
during the spouses' coverture. Acquisition of title and registration which are the subject of Exhibit 4, were conjugal properties of the
thereof are two different acts. It is well settled that registration does spouses Emilio Jocson and Alejandra Poblete, they should be
not confer title but merely confirms one already existing (See Torela considered, likewise, as the exclusive properties of Emilio Jocson,
vs. Torela, supra). It may be that the properties under dispute were the burden of proof being on petitioner.
acquired by Emilio Jocson when he was still a bachelor but were
registered only after his marriage to Alejandra Poblete, which ACCORDINGLY, the petition is DISMISSED and the decision of the
explains why he was described in the certificates of title as married Court of Appeals is AFFIRMED.
to the latter.
SO ORDERED.
Contrary to petitioner's position, the certificates of title show, on
their face, that the properties were exclusively Emilio Jocson's, the
registered owner. This is so because the words "married to'
preceding "Alejandra Poblete' are merely descriptive of the civil
status of Emilio Jocson Litam v. Rivera, 100 Phil. 354; Stuart v. Yatco,
No. L-16467, April 27, 1962, 4 SCRA 1143; Magallon v. Montejo, G.R.
No. L-73733, December 16, 1986, 146 SCRA 282). In other words,
the import from the certificates of title is that Emilio Jocson is the
owner of the properties, the same having been registered in his
name alone, and that he is married to Alejandra Poblete.
We are not unmindful that in numerous cases We consistently held
that registration of the property in the name of only one spouse
does not negate the possibility of it being conjugal (See Bucoy vs.
Paulino, No. L-25775, April 26, 1968, 23 SCRA 248). But this ruling is
not inconsistent with the above pronouncement for in those cases
there was proof that the properties, though registered in the name
of only one spouse, were indeed conjugal properties, or that they
have been acquired during the marriage of the spouses, and
SECOND DIVISION
G.R. No. 100728 June 18, 1992
WILHELMINA JOVELLANOS, MERCY JOVELLANOS-MARTINEZ and
JOSE HERMILO JOVELLANOS, petitioners,
vs.
THE COURT OF APPEALS, and ANNETTE H. JOVELLANOS, for and in
her behalf, and in representation of her two minor daughters as
natural guardian, ANA MARIA and MA. JENNETTE, both surnamed
JOVELLANOS, respondents.
REGALADO, J.:
This petition for review on certiorari seeks to reverse and set aside
the decision 1 promulgated by respondent court on June 26, 1991 in
CA-G.R. CV No. 27556 affirming with some modifications the earlier
decision of the Regional Trial Court of Quezon City, Branch 85,
which, inter alia, awarded one-half (1/2) of the property subject of
Civil Case No. Q-52058 therein to private respondent Annette H.
Jovellanos and one-sixth (1/6) each of the other half of said property
to the three private respondents. all as pro indiviso owners of their
aforesaid respective portions.
As found by respondent court, 2 on September 2, 1955, Daniel
Jovellanos and Philippine American Life Insurance Company
(Philamlife) entered into a contract denominated as a lease and
conditional sale agreement over Lot 8, Block 3 of the latter's Quezon
City Community Development Project, including a bungalow
thereon, located at and known as No. 55 South Maya Drive,
Philamlife Homes, Quezon City. At that time, Daniel Jovellanos was
married to Leonor Dizon, with whom he had three children, the
petitioners herein. Leonor Dizon died on January 2, 1959. On May
30, 1967, Daniel married private respondent Annette H. Jovellanos
with whom he begot two children, her herein co-respondents.
On December 18, 1971, petitioner Mercy Jovellanos married Gil
Martinez and, at the behest of Daniel Jovellanos, they built a house
on the back portion of the premises. On January 8, 1975, with the
lease amounts having been paid, Philamlife executed to Daniel
Jovellanos a deed of absolute sale and, on the next day, the latter
donated to herein petitioners all his rights, title and interests over
the lot and bungalow thereon. On September 8, 1985, Daniel
Jovellanos died and his death spawned the present controversy,
resulting in the filing by private respondents of Civil Case No. Q-
52058 in the court below.
Private respondent Annette H. Jovellanos claimed in the lower court
that the aforestated property was acquired by her deceased
husband while their marriage was still subsisting, by virtue of the
deed of absolute sale dated January 8, 1975 executed by Philamlife
in favor of her husband, Daniel Jovellanos. who was issued Transfer
Certificate of Title No. 212286 of the Register of Deeds of Quezon
City and which forms part of the conjugal partnership of the second
marriage. Petitioners, on the other hand, contend that the property,
specifically the lot and the bungalow erected thereon, as well as the
beneficial and equitable title thereto, were acquired by their
parents during the existence of the first marriage under their lease
and conditional sale agreement with Philamlife of September 2,
1955.
On December 28, 1989, the court a quo rendered judgment 3 with
the following dispositions:
WHEREFORE, premises considered, judgment is
hereby rendered as follows
1. Ordering the liquidation of the partnership of
the second marriage and directing the
reimbursement of the amount advanced by the
partnership of the first marriage as well (as) by the
late Daniel Jovellanos and the defendants spouses
Gil and Mercia * J. Martinez in the acquisition of
the lot and bungalow described in the Lease and
Conditional Sale Agreement (Exhs. D and 1);
2. After such liquidation and reimbursement,
declaring the plaintiff Annette Jovellanos as pro-
indiviso owner of 1/2 of the property described in
TCT No. 212268 (sic) and the bungalow erected
therein;
3. Declaring the plaintiff Annette Jovellanos, as
well as the minors Anna Marie and Ma. Jeannette
(sic) both surnamed Jovellanos and the herein
defendants, as owners pro indiviso of 1/6 each of
the other half of said property;
4. Declaring the defendants spouses Gil and
Mercia Martinez as exclusive owners of the two-
storey house erected on the property at the back
of the said bungalow, with all the rights vested in
them as builders in good faith under Article 448 of
the New Civil Code;
5. Ordering the parties to make a partition among
themselves by proper instruments of conveyances,
subject to the confirmation of this Court, and if
they are unable to agree upon the partition,
ordering that the partition should be made by not
more than three (3) competent and disinterested
persons as commissioners who shall make the
partition in accordance with Sec. 5, Rule 69 of the
Revised Rules of Court;
6. Ordering the defendant(s) to pay plaintiffs,
jointly and severally, the sum of P5,000.00 as
attorney's fees, plus costs.
SO ORDERED. 4
Respondent Court of Appeals, in its challenged decision, held that
the lease and conditional sale agreement executed by and between
Daniel Jovellanos and Philamlife is a lease contract and, in support
of its conclusion, reproduced as its own the following findings of the
trial court:
It is therefore incumbent upon the vendee to
comply with all his obligations, i.e., the payment of
the stipulated rentals and adherence to the
limitations set forth in the contract before the
legal title over the property is conveyed to the
lessee-vendee. This, in effect. is a pactum reservati
dominii which is common in sales on installment
plan of real estate whereby ownership is retained
by the vendor and payment of the agreed price
being a condition precedent before full ownership
could be transferred (Wells vs. Samonte, 38768-R,
 March 23, 1973; Perez vs. Erlanger and Galinger
Inc., CA 54 OG 6088). The dominion or full
ownership of the subject property was only
transferred to Daniel Jovellanos upon full payment
of the stipulated price giving rise to the execution
of the Deed of Absolute Sale on January 8, 1975
(Exh. 2) when the marriage between the plaintiff
and Daniel Jovellanos was already in existence.
The contention of the defendants that the jus in re
aliena or right in the property of another person
(Gabuya vs. Cruz, 38 SCRA 98) or beneficial use
and enjoyment of the property or the equitable
title has long been vested in the vendee-lessee
Daniel Jovellanos upon execution of Exh. "1" is
true, But the instant case should be differentiated
from the cited cases of Pugeda v. Trias, et al., 4
SCRA 849; and Alvarez vs. Espiritu, G.R. L-18833,
August 14, 1965, which cannot be applied herein
even by analogy. In Pugeda. the subject property
refers solely to friar lands and is governed by Act
1120 wherein the certificate of sale is considered a
conveyance of ownership subject only to the
resolutory condition that the sale may be
rescinded if the agreed price has not been paid in
full; in the case at bar, however, payment of the
stipulated price is a condition precedent before
ownership could be transferred to the vendee. 5
With the modification that private respondents should also
reimburse to petitioners their proportionate shares on the proven
hospitalization and burial expenses of the late Daniel Jovellanos,
respondent Court of Appeals affirmed the judgment of the trial
court. applying Article 118 of the Family Code which provides:
Art. 118. Property bought on installment paid
partly from exclusive funds of either or both
spouses and partly from conjugal funds belongs to
the buyer or buyers if full ownership was vested
before the marriage and to the conjugal
partnership if such ownership was vested during
the marriage. In either case, any amount advanced
by the partnership or by either or both spouses
shall be reimbursed by the owner or owners upon
liquidation of the partnership.
Petitioners now seek this review, invoking their assignment of errors
raised before the respondent court and which may be capsulized
into two contentions, namely, that (1) the lower court erred in
holding that the lot and bungalow covered by the lease and
conditional sale agreement (Exhibit 1) is conjugal property of the
second marriage of the late Daniel Jovellanos: and (2) the lower
court erred in holding that the provisions of the Family Code are
applicable in resolving the rights of the parties herein. 6
It is petitioners' position that the Family Code should not be applied
in determining the successional rights of the party litigants to the
estate of Daniel Jovellanos. for to do so would be to impair their
vested property rights over the property in litigation which they
have acquired long before the Family Code took effect. 7
To arrive at the applicable law, it would accordingly be best to look
into the nature of the contract entered into by the contracting
parties. As appositely observed by respondent court, the so-called
lease agreement is, therefore, very much in issue. Preliminarily, we
do not lose sight of the basic rule that a contract which is not
contrary to law, morals, good customs, public order or public policy
has the force of law between the contracting parties and should be
complied with in good faith. 8 Its provisions are binding not only
upon them but also upon their heirs and assigns. 9
The contract entered into by the late Daniel Jovellanos and
Philamlife is specifically denominated as a "Lease and Conditional
Sale Agreement" over the property involved with a lease period of
twenty years at a monthly rental of P288.87, by virtue of which the
former, as lessee-vendee, had only the right of possession over the
property. 10 In a lease agreement, the lessor transfers merely the
temporary use and enjoyment of the thing leased. 11 In fact, Daniel
Jovellanos bound himself therein, among other things, to use the
property solely as a residence, take care thereof like a good father
of a family, permit inspection thereof by representatives of
Philamlife in regard to the use and preservation of the property. 12
It is specifically provided, however, that "(i)f, at the expiration of the
lease period herein agreed upon, the LESSEE-VENDEE shall have fully
faithfully complied with all his obligations herein stipulated, the
LESSOR-VENDOR shall immediately sell, transfer and convey to the
LESSEE-VENDEE the property which is the subject matter of this
agreement; . . . 13
The conditional sale agreement in said contract is, therefore, also in
the nature of a contract to sell, as contrdistinguished from a
contract of sale. In a contract to sell or a conditional sale, ownership
is not transferred upon delivery of the property but upon full
payment of the purchase price. 14 Generally, ownership is
transferred upon delivery, but even if delivered, the ownership may
still be with the seller until full payment of the price is made, if there
is stipulation to this effect. The stipulation is usually known as
a pactum reservati dominii, or contractual reservation of title, and is
common in sales on the installment plan. 15Compliance with the
stipulated payments is a suspensive condition. 16 the failure of
which prevents the obligation of the vendor to convey title from
acquiring binding force. 17
Hornbook lore from civilists clearly lays down the distinctions
between a contract of sale in which the title passes to the buyer
upon delivery of the thing sold, and a contract to sell where, by
agreement, the ownership is reserved in the seller and is not to pass
until full payment of the purchase price: In the former, non-
payment of the price is a negative resolutory condition; in the latter,
full payment is a positive suspensive condition. In the former, the
vendor loses and cannot recover the ownership of the thing sold
until and unless the contract of sale is rescinded or set aside; in the
latter, the title remains in the vendor if the vendee does not comply
with the condition precedent of making full payment as specified in
the contract.
Accordingly, viewed either as a lease contract or a contract to sell,
or as a contractual amalgam with facets of both, what was vested by
the aforestated contract in petitioners' predecessor in interest was
merely the beneficial title to the property in question. His monthly
payments were made in the concept of rentals, but with the
agreement that if he faithfully complied with all the stipulations in
the contract the same would in effect be considered as amortization
payments to be applied to the predetermined price of the said
property. He consequently acquired ownership thereof only upon
full payment of the said amount hence, although he had been in
possession of the premises since September 2, 1955, it was only on
January 8, 1975 that Philamlife executed the deed of absolute sale
thereof in his favor.
The conditions of the aforesaid agreement also bear notice,
considering the stipulations therein that Daniel Jovellanos, as lessee-
vendee, shall not —
xxx xxx xxx
(b) Sublease said property to a third party;
(c) Engage in business or practice any profession
within the property;
xxx xxx xxx
(f) Make any alteration or improvement on the
property without the prior written consent of the
LESSOR-VENDOR;
Art. 256. This Code shall have retroactive effect
insofar as it does not prejudice or impair vested or
acquired nights in accordance with the Civil Code
or other laws.
The right of Daniel Jovellanos to the property under the contract
with Philamlife was merely an inchoate and expectant right which
would ripen into a vested right only upon his acquisition of
ownership which, as aforestated, was contingent upon his full
payment of the rentals and compliance with all his contractual
obligations thereunder. A vested right as an immediate fixed right of
present and future enjoyment. It is to be distinguished from a right
that is expectant or contingent. 20 It is a right which is fixed,
unalterable, absolute, complete and unconditional to the exercise of
which no obstacle exists, 21 and which is perfect in itself and not
dependent upon a contingency. 22 Thus, for a property right to be
vested, there must be a transition from the potential or contingent
to the actual, and the proprietary interest must have attached to a
thing; it must have become fixed or established and is no longer
open to doubt or controversy. 23
the lease and conditional sale agreement were paid as follows (a)
from September 2, 1955 to January 2, 1959, by conjugal funds of the
first marriage; (b) from January 3, 1959 to May 29, 1967, by capital
of Daniel Jovellanos; (c) from May 30, 1967 to 1971, by conjugal
funds of the second marriage; and (d) from 1972 to January 8, 1975,
by conjugal funds of the spouses Gil and Mercy Jovellanos
Martinez. 25 Both courts, therefore, ordered that reimbursements
should be made in line with the pertinent provision of Article 118 of
the Family Code that "any amount advanced by the partnership or
by either or both spouses shall be reimbursed by the owner or
owners upon liquidation of the partnership."
ACCORDINGLY, finding no reversible error in the judgment of
respondent court, the same is hereby AFFIRMED.
SO ORDERED.

(g) Cut down, damage, or remove any tree or
shrub, or remove or quarry any stone, rock or
earth within the property, without the prior
written consent of the LESSOR-VENDOR;
(h) Assign to another his right, title and interest
under and by virtue of this Agreement, without
the prior written consent and approval of the
LESSOR-VENDOR. 18
The above restrictions further bolster the conclusion that Daniel
Jovellanos did not enjoy the full attributes of ownership until the
execution of the deed of sale in his favor. The law recognizes in the
owner the right to enjoy and dispose of a thing, without other
limitations than those established by law, 19 and, under the
contract, Daniel Jovellanos evidently did not possess or enjoy such
rights of ownership.
We find no legal impediment to the application in this case of the
rule of retroactivity provided in the Family Code to the effect that —
The trial court which was upheld by respondent court, correctly
ruled that the cases cited by petitioners are inapplicable to the case
at bar since said cases involved friar lands which are governed by a
special law, Act 1120, which was specifically enacted for the
purpose. In the sale of friar lands, upon execution of the contract to
sell, a certificate of sale is delivered to the vendee and such act is
considered as a conveyance of ownership, subject only to the
resolutory condition that the sale may be rescinded if the agreed
price shall not be paid in full. In the instant case, no certificate of
sale was delivered and full payment of the rentals was a condition
precedent before ownership could be transferred to the vendee. 24
We have earlier underscored that the deed of absolute sale was
executed in 1975 by Philamlife, pursuant to the basic contract
between the parties, only after full payment of the rentals. Upon
the execution of said deed of absolute sale, full ownership was
vested in Daniel Jovellanos. Since. as early as 1967, he was already
married to Annette H. Jovellanos, this property necessarily belonged
to his conjugal partnership with his said second wife.
As found by the trial court, the parties stipulated during the pre-trial
conference in the case below that the rentals/installments under
EN BANC
G.R. No. L-16857 May 29, 1964
MARCELO CASTILLO, JR., FELICISIMO CASTILLO, ENCARNACION
CASTILLO, AMELIA CASTILLO, JAIME CASTILLO, RONALDO
CASTILLO, VICTORIA CASTILLO, LETICIA CINCO, LEVI CINCO and
DANIEL CINCO,petitioners,
vs.
MACARIA PASCO, respondent.
Tomas Yumol for petitioners.
Mariano G. Bustos and Associates for respondent.
REYES, J.B.L., J.:
The legitimate children and descendants of the late Marcelo Castillo,
Sr. pray for the review and reversal of the decision of the Court of
Appeals, in its Case CA G.R. No. 19377-R, that affirmed the decision
of the Court of First Instance of Bulacan, declaring that the fishpond
in San Roque, Paombong, Bulacan (covered by TCT No. 9928 of the
Registry of Deeds of said province), was the exclusive paraphernal
property of respondent Macaria Pasco, surviving spouse of the
deceased Marcelo Castillo, Sr., and dismissing the complaint for
partition and accounting filed by petitioners in said Court of First
Instance.
The Court of Appeals found, and the petitioner-appellants do not
dispute, that in October 1931 Marcelo Castillo, Sr., being a widower,
married Macaria Pasco, a widow who had survived two previous
husbands. Petitioners were children and grandchildren
(representing their deceased parents) of Marcelo Castillo, Sr. by his
previous marriage. On April 3, 1933, Marcelo Castillo, Sr. died, and
his widow married her fourth husband, Luis San Juan, on June 8,
1934.
On December 22, 1932, Gabriel and Purificacion Gonzales, as co-
owners of the litigated fishpond, executed a deed of sale (Exh. 1)
conveying said property to the spouses Marcelo Castillo and
Macaria Pasco for the sum of P6,000.00 (although the deed recited
a higher amount), payable in three installments: P1,000 upon
execution of the deed (Exh. 1) ; P2,000 on January 25, 1933 without
interest; and P3,000 within one year thereafter, with 11% interest
from February 1, 1933, but extendible for another year.
Against the contention of petitioners-appellants that the fishpond
thus bought should be considered conjugal for its having been
acquired during coverture, the Court of Appeals declared it to be
paraphernalia because it was purchased with exclusive funds of the
wife, Macaria Pasco. She was admittedly a woman of means even
before she married Marcelo Castillo, Sr. and the latter's principal
source of income was only his P80 a month salary, as provincial
treasurer (as found by the Court of First Instance), besides two small
residential lots and fishponds, which were encumbered and later
transferred to his five children by his first wife and whom he was
then supporting in medical and high school. Actually, Marcelo
Castillo, Sr. died without enough assets to pay his debts. .
In point of fact, the Court of Appeals found that the initial payment
of P1,000 for the fishpond now in litigation was made up of P600,
that one of the vendors (Gabriel Gonzales) owed to appellee Pasco,
and P400 in cash, which the latter paid out of the proceeds of the
sale of one of her nipa lands. The second installment of P2,000
appears to have been paid with the proceeds of the loan from Dr.
Nicanor Jacinto, to whom the fishpond was mortgaged by both
spouses. Dr. Jacinto later assigned his interest to Dr. Antonio Pasco.
The last payment of P3,000 was derived from a loan secured by a
mortgage (Exh. 2) on 2 parcels of land assessed in the name of
Macaria Pasco, and one of which she had inherited from a former
husband, Justo S. Pascual, while the other lot encumbered was
assessed in her exclusive name.
It was also found by the Court of Appeals that upon the death of
Marcelo Castillo, Sr., the loan and mortgage in favor of Dr. Jacinto
(later assigned by him to Dr. Antonio Pasco) was still outstanding.
Unable to collect the loan, Dr. Pasco foreclosed the mortgaged, and
the encumbered fishpond was sold to him; but the sale was
subsequently annulled. Later, on September 7, 1949, respondent
Macaria Pasco judicially consigned P12,300 on account of the
mortgage debt and its interest, and completed payment by a second
consignation of P752.43 made on April 24, 1950. As the estate of
Castillo had no assets adequate to pay off the claims against it, the
Court of Appeals concluded that the amounts consigned belonged
to the widow Macaria Pasco, respondent herein.1äwphï1.ñët
It is not gain said that under the Spanish Civil Code of 1889, that was
the applicable law in 1932, the property acquired for onerous
consideration during the marriage was deemed conjugal or separate
property depending on the source of the funds employed for its
acquisition. Thus, Article 1396 of said Code provided:
ART. 1396. The following is separate property spouse:
1. ...
2. ...
3. ...
4. That bought with money belonging exclusively to the
wife or to the husband.
On the other hand, Article 1401, prescribed that:
ART. 1401. To the conjugal property belong:
1. Property acquired for valuable consideration during the
marriage at the expense of the common fund, whether the
acquisition is made for the partnership or for one of the
spouses only.
The last clause in Article 1401 (par. 1) indicates that the
circumstance of the sale of the fishpond in question being made by
the original owners in favor of both spouses, Marcelo Castillo, Sr.
and Macaria Pasco, is indifferent for the determination of whether
the property should be deemed paraphernal or conjugal. As
remarked by Manresa in his Commentaries to the Civil Code, Vol. IX
(5th Ed), p. 549, "la ley atiende no a la persona encuyo nombre o a
favor del cual se realize la compra, sino a la procedenciadel dinero."
As above-noted, the Court of Appeals determined that the initial
payment of P1,000 for the fishpond now disputed was made out of
private funds of Macaria Pasco. Appellants, however, argue that
since there is no express finding that the P600 debt owed by Gabriel
Gonzales came exclusively from private funds of Pasco, they should
be presumed conjugal funds, in accordance with Article 1407 of the
Civil Code of 1889. The argument is untenable. Since the wife, under
Article 1418, can not bind the conjugal partnership without the
consent of the husband, her private transactions are presumed to
be for her own account, and not for the account of the partnership.
The finding of the Court of Appeals is that Gabriel Gonzales owed
this particular indebtedness to Macaria Pasco alone, and in the
absence of proof that the husband authorized her to use community
funds therefor, the appellate Court's finding can not be disturbed by
us. Whether the evidence adverted to should be credited is for the
Court of Appeals to decide.
Appellants next assail the conclusion of the Court of Appeals that
the other two installments of the purchase price should be, like the
first one, deemed to have been paid with exclusive funds of the wife
because the money was raised by loans guaranteed by mortgage on
paraphernalia property of the wife. The position thus taken by
appellants is meritorious, for the reason that the deeds show the
loans to have been made by Dr. Nicanor Jacinto, and by Gabriel and
Purificacion Gonzales, to both spouses Marcelo Castillo and Macaria
Pasco, as joint borrowers. The loans thus became obligations of the
conjugal partnership of both debtor spouses, and the money loaned
is logically conjugal property. While the securing mortgage is on the
wife's paraphernalia the mortgage is a purely accessory obligation
that the lenders could, waive if they so chose, without affecting the
principal debt which was owned by the conjugal partnership, and
which the creditors could enforce exclusively against the latter it
they so desired.
In Palanca vs. Smith Bell & Co., 9 Phil. 131., this Court ruled as
follows (cas cit. at p. 133,) .
This P14,000, borrowed by said Emiliano Boncan upon the
credit of the property of his wife became conjugal property
(par. 3, Art. 1401, Civil Code) and when that same was
reinvented in the construction of a house, the house
became e conjugal property and was liable for the payment
of the debts of the husband (Art 1408, Civ. Code).
If money borrowed by the husband alone on the security of his
wife's property is conjugal in character, a fortiorishould it be
conjugal when borrowed by both spouses. The reason obviously is
that the loan becomes an obligation of the conjugal partnership
which is the one primarily bound for its repayment.
The case of Lim Queco vs. Cartagena, 71 Phil. 162, is clearly
distinguishable from the Palanca case in that in the Lim Queco case
the wife alone borrowed the money from "El Ahorro Insular"
although she guaranteed repayment with a mortgage on her
parapherna executed with her husband's consent. Since the wife
does not have the management or representation of the conjugal
partnership where the husband is qualified therefor, the loan to her
constituted a transaction that did not involve the community, and
the creditor could seek repayment exclusively from her properties.
Logically, as this Court then held, the money loaned to the wife, as
well as the property acquired thereby, should be deemed to be the
wife's exclusive property.
The analogy between the case now before us and the Palanca vs.
Smith Bell case is undeniable, and the Palanca ruling applies. We,
therefore, find that the two installments, totalling P5,000, of the
price of the fishpond were paid with conjugal funds, unlike the first
installment of P1,000 that was paid exclusively with money
belonging to the wife Macaria Pasco, appellee herein.
As the litigated fishpond was purchased partly with paraphernal
funds and partly with money of the conjugal partnership, justice
requires that the property be held to belong to both patrimonies in
common, in proportion to the contributions of each to the total
purchase price of P6,000. An undivided one-sixth (1/6) should be
deemed paraphernalia and the remaining five-sixths (5/6) held
property of the conjugal partnership of spouses Marcelo Castillo and
Macaria Pasco (9 Manresa, Com. al Codigo Civil [5th Ed.], p. 549).
Puesto que la ley atiende no a la persona en cuyo nombre o
a favor del cualse realize la compra sino a la procedencia
del dinero, considerando el hecho como una verdadera
substitution o conversion del dinero en otros objetos,
debemos deduce que cuando una finca por ejemplo, se
compra con dinero del marido y de la mujer, o de la mujer y
de la Sociedad, pertenece a aquellos de quienes precede el
precio y en la proporcion entregada por cada cual. Si pues
marido y mujer compran una casa entregando el primero
de su capital propio 10,000 pesetas, y la segunda 5,000, la
casa pertenecera a losdos conyuges pro indiviso, en la
proportion de los terceras partes al marido y una tercera a
la mujer. (Manresa. op. cit)
The payment by the widow, after her husband's death, of the
mortgage debt due to Dr. Pasco, the assignee of the original
mortgagee, Dr. Nicanor Jacinto, does not result in increasing her
share in the property in question but in creating a lien in her favor
over the undivided share of the conjugal partnership, for the
repayment of the amount she has advanced, should it be ultimately
shown that the money thus delivered to the creditor was exclusively
owned by her.
It follows from the foregoing that, as the fishpond was undivided
property of the widow and the conjugal partnership with her late
husband, the heirs of the latter, appellants herein, were entitled to
ask for partition thereof and liquidation of its proceeds. The
ultimate interest of each party must be resolved after due hearing,
taking into account (a) the widow's one-sixth direct share; (b) her
half of the community property; (e) her successional rights to a part
of the husband's share pursuant to the governing law of succession
when the husband died; and (d) the widow's right to reimbursement
for any amounts advanced by her in paying the mortgage debt as
aforesaid. All these details must be settled after proper trial.
WHEREFORE, the dismissal of the original complaint is hereby
revoked and set aside, and the records are ordered remanded to the
court of origin for further proceedings conformable to this opinion.
Bengzon, C.J., Bautista Angelo, Concepcion, Barrera, Paredes, Regala
and Makalintal, JJ., concur.
Padilla, Labrador and Dizon, JJ., took no part.
FIRST DIVISION
G.R. No. 73733 December 16, 1986
EPIFANIA MAGALLON, petitioner,
vs.
HON. ROSALINA L. MONTEJO, in her Official Capacity as Presiding
Judge of Regional Trial Court of Davao del Sur, Branch XXI,
CONCEPCION LACERNA, ELECERIA LACERNA and PURITA
LACERNA, respondents.
Latasa, Cagas and Aranune Law & Surveying Office for petitioner.
Alberto Lumakang for private respondents.
NARVASA, J.:
The petition before this Court sinks the annulment of a writ of
execution issued by the respondent Judge in Civil Case No. 727 of
her court (RTC Davao del Sur). Said case was instituted by the
plaintiffs (private respondents herein) against Martin Lacerna to
compel partition of parcel of land located in Barrio Kasuga
Municipality of Magsaysay, Davao del Sur, to which said defendant
had perfected a claim by homestead. The plaintiffs, claiming to be
the common children of Martin Lacerna and his wife, Eustaquia
Pichan, who died in 1953, asserted a right to one-half of the land as
their mother's share in her conjugal partnership with Martin. While
said defendant denied having contracted marriage with Eustaquia
Pichan — although he admitted living with her without benefit of
marriage until she allegedly abandoned him — as well as paternity
of two of the plaintiffs who, he claimed, were fathered by other
men, the Trial Court gave his denials no credence. Said Court, on the
basis of the evidence presented to it, found that Martin had in fact
been married to Eustaquia, and that the plaintiffs were his children
with her. The Trial Court further found that Martin had begun
working the homestead, and his right to a patent to the land
accrued, during his coverture with Eustaquia. On the basis of these
findings, the plaintiffs were declared entitled to the half of the land
claimed by them. 1
Martin Lacerna appealed to the Intermediate Appellate Court AC-
G.R. No. 59900-R). That Court affirmed, in a Decision promulgated
on August 31, 1984 which has since become final.2
It appears that at the time the case was brought, and while it was
being heard in the Trial Court, no certificate of title to the land had
yet been issued to Martin Lacerna, although he had already
complied with all the conditions necessary to a grant thereof.
Original Certificate of Title No. P-11 568 (issued on the basis of
Homestead Patent No. 148869) was issued only on November 22,
1978, while Lacerna's appeal was pending in the Intermediate
Appellate Court. While it is not disputed that said certificate of title
refers to the same land homesteaded by Lacerna during his
coverture with Eustaquia Pichan, for reasons to which the record
before the Court offers no clear clue, it states on its face that it is
issued in the name of " ... MARTIN LACERNA, Filipino, of legal age,
married to Epifania Magallon ... ," the latter being the present
petitioner.3
It appears further that on November 26, 1985, after the
confirmative Decision of the Intermediate Appellate Court had
become final and executory, the respondent Judge, on motion of
the plaintiffs issued an alias writ of execution commanding the
Provincial Sheriff::
... to order the defendant Martin Lacerna to divide
and partition the property located at Casuga,
Magsaysay, Davao del Sur, consisting of 10
hectares designated as Lot No. 5098 Cad. No. 275
covered by H.A. No. 20-13378 (E-20-12748), ½ of
which is the share of Eustaquia Pichan in the
conjugal property, and plaintiffs being Pichan's
children are also entitled thereto; and deliver
portion of 5 hectares of the aforedescribed lot to
the plaintiffs as their share to satisfy the said
judgment and your fees thereon. 4
Apparently, said writ was served on both Martin Lacerna and
petitioner herein, for on December 17, 1985, the latter filed with
the Trial Court a "Motion for Intervention and to Stay Execution"
alleging that the land subject of the writ was conjugal property of
herself and Martin Lacerna under a certificate of title (OCT No. P-
11568) ... issued way back 1978 (sic) without legal impediments, and
... now incontestable," as well as ... valid, binding and legal unless
declared otherwise in an independent proceedings, ... and praying
that ... the property of herein intervenor be excluded from the
enforcement of the writ of execution." 5 Said motion was denied, as
also was a motion for reconsideration of the order of denial. Hence,
the present petition.
The facts found by the lower courts which, in view of the finality of
the latter's decisions, are binding upon this Court and can no longer
be controverted, as wen as the pertinent allegations of the petition,
leave no doubt that the land in question, which rightfully pertained
to the conjugal partnership of Martin Lacerna and Eustaquia Pichan,
the plaintiff's mother, and should have been titled in the names of
said spouses, was, through fraud or mistaken, registered in the
names of Martin Lacerna and petitioner herein, Epifania Magallon In
such a situation, the property should be regarded as impressed with
an implied, or a constructive, trust for the party rightfully entitled
thereto. The Civil Code provides that:
If property is acquired through mistake or fraud,
the person obtaining it is, by force of law,
considered a trustee of an implied trust for the
benefit of the person from whom the property
comes. 6
The provision restates one of the principles upon which the general
law of trust is founded, expressed in equity jurisprudence thus:
A constructive trust is a creature of equity, defined
supra (sec. 15) as a remedial device by which the
holder of legal title is held to be a trustee for the
benefit of another who in good conscience is
entitled to the beneficial interest. So. the doctrine
of constructive trust is an instrument of equity for
the maintenance of justice, good faith, and good
conscience, resting on a sound public policy
requiring that the law should not become the
instrument of designing persons to be used for the
purpose of fraud. In this respect constructive
trusts have been said to arise through the
application of the doctrine of equitable estoppel
or under the broad doctrine that equity regards
and treats as done what in good conscience ought
to be done.
Where, through a mistake of fact, title to, and
apparent ownership of, property rightfully
 belonging to one person is obtained by another, a
constructive trust ordinarily arises in favor of the
rightful owner of such property
It is a general principle that one who acquires land
or other property by fraud, misrepresentation,
imposition, or concealment, or under any such
other circumstances as to render it inequitable for
him to retain the property, is in equity to be
regarded as a trustee ex maleficio thereof for a
person who suffers by reason of the fraud or other
wrong, and is equitably entitled to the property,
even though such beneficiary may never have any
legal estate therein. It is to be observed, however,
that in the absence of equitable considerations or
a fiduciary relationship, fraud alone, either actual
or constructive, will not give rise to a trust, since,
as has been pointed out, if it were otherwise all
persons claiming property under defective titles
would be trustee for the 'true' owners.7
Under proper circumstances, mistake, although
unconnected with fraud, will warrant relief under
the Code providing that one who gains a thing by
fraud, accident, mistake, undue influence, the
violation of a trust, or other wrongful act is, unless
he has come better title thereto, an involuntary
trustee of the thing gained for the benefit of the
person who would otherwise have had it. 8
As stated by Justice Cardozo, a constructive trust is
the formula through which the conscience of
equity finds expression and when property has
been acquired in such circumstances that the
holder of the legal title may not in good
conscience retain the beneficial interest; equity
converts him into a trustee. 9
In an early case in this jurisdiction, land of the plaintiff had, by
mistake, been included in the title of an adjoining owner who was
afterwards sued by his creditors, the latter obtaining writs of
execution and procuring their annotation on said title. In an action
by the plaintiff to enjoin the sale of his property, annul the levies
thereon and secure a new title without those encumbrances, this
Court affirmed judgment of the lower court in the plaintiff's favor,
despite the fact that he had done nothing to protect his interests in
the land during a period of almost six years following the issuance of
the decree of registration in favor of the adjoining owner. The Court,
noting that the titular (ostensible) owner had never laid claim to the
property mistakenly registered in his name and that he had in fact
acquiesced to judgment in a separate action declaring the plaintiff
the real owner of the property, refused to apply the one-year
limitation period for disputing the title and held that in the
circumstances, the former merely held title to the property in trust
for the plaintiff. 10
In Bueno vs. Reyes, 11 where property belonging to an ancestor of
whom plaintiffs' parents were the intestate heirs was, though
mistake or in bad faith, registered in cadastral proceedings in the
name of other parties who had no right thereto, this Court
reaffirmed the principles already cited, holding that:
If any trust can be deduced at all from the
foregoing facts it was an implied one, arising by
operation of law not from any presumed intention
of the parties but to satisfy the demands of justice
and equity and as a protection against unfair
dealing or downright fraud. Indeed, in this kind of
implied trust, commonly denominated
constructive, as distinguished from resulting, trust,
there exists a certain antagonism between the
cestui que trust and the trustee. Thus, for
instance, under Article 1456 of the Civil Code, 'if
property is acquired through mistake or fraud, the
person obtaining it is, by force of law, considered a
trustee of an implied trust for the benefit of the
person from whom the property comes.' In a
number of cases this Court has held that
registration of property by one person in his
name, whether by mistake or fraud, the real
owner being another per- son, impresses upon the
title so acquired the character of a constructive
trust for the real owner, which would justify an
action for reconveyance. 12
Clearly, therefore, the petitioner herein, as the trustee of a
constructive trust, has an obligation to convey to the private
respondents that part of the land in question to which she now
claims an ostensible title, said portion rightfully pertaining to the
respondents' deceased mother as her share in the conjugal
partnership with Martin Lacerna.
The question is whether that obligation may be enforced by
execution in the action at bar, which was brought and prosecuted to
judgment against Martin Lacerna only, without impleading the
petitioner. 13 Stated otherwise, is petitioner bound by final
judgment rendered in an action to which she was not made a party?
There are no clear precedents on the matter in our law. Reference
to American law for any persuasive ruling shows that even there the
question seems to be an open one.
"The authorities are in conflict as to whether a wife, not a party to
an action is bound by a judgment therein for or against her husband
with respect to community or homestead property or property held
as an estate in entirety.
Community property. It has been held that a judgment against the
husband in an action involving community property, is conclusive on
the wife even if she is not a party, but it has also been held that a
judgment against either husband or wife with respect to community
property in an action to which the other spouse is not a party does
not prevent the other spouse from subsequently having his or her
day in court, although, of course, a judgment against both husband
and wife is binding on both.
Estate by entirety. It has been both affirmed and denied that a wife
is in such privity with her husband in respect of property held by
them as an estate in entirety that a judgment for or against him
respecting such property in a suit to which she is not a party is
binding on her.
Homestead. A judgment affecting a homestead is, according to
some authorities, not binding on a spouse who is not a party to the
action in which it is rendered, unless the homestead is community
property or the homestead claim or interest would not defeat the
action; but, according to other authorities, where the husband sets
up and litigates a claim for the homestead, an adjudication for or
against him is binding on the wife. 14
As to her community interest in real property, a
wife is in privity with her husband and is
represented by him in an action as fully as though
she had expressly been made a party thereto.
Cutting vs. Bryan, 274 P. 326, 206 Cal. 254,
certiorari denied 50 S. Ct. 16, 280 U.S. 556,74 L.Ed
611. 15
In the particular circumstances obtaining here, the Court can as it
does in good conscience and without doing violence to doctrine,
adopt the affirmative view and hold the petitioner bound by the
judgment against Martin Lacerna, despite her not having in fact
been impleaded in the action against the latter. This ruling
presumes that petitioner is, as she claims, the legal wife of Lacerna
though, as observed by the Intermediate Appellate Court, no
marriage contract was presented by Lacerna to prove his marriage
to the petitioner either before or after the death of Eustaquia
Pichan. Indeed, it is clear that the petitioner cannot assert any claim
to the land other than by virtue of her supposed marriage to
Lacerna. As a mere mistress, she cannot pretend to any right
thereto.
But whether the petitioner is a lawful wife or a mere "live-in"
partner, the Court simply cannot believe that she never became
aware of the litigation concerning the land until presented with the
writ of execution. What is far more probable and credible is that she
has known of the lawsuit since 1956 when Martin Lacerna "married"
her. 16 Her silence and inaction since then and until barely a year ago
bespeak more than anything else, a confession that she had and has
no right to the land and no defense to offer to the action, either on
her part or on the part of Martin Lacerna. Had she even the
semblance of a right, there is no doubt she would have lost no time
asserting it.
From the averments of the petition, it is evident that the petitioner
relies mainly, if not solely, on the fact that the certificate of title to
the land carries her name as the "wife" of the owner named therein,
Martin Lacerna. As already observed, such entry on the certificate of
title has been established by evidence no longer disputable as
resulting from a mistake if, indeed, it was not procured through
fraud. Moreover, on the authority of Litam vs. Rivera 17 and Stuart Lacerna allowed the judgment to become final and executory
vs. Yatco, 18 the phrase "married to Epifania Magallon written after without raising that point of law, even on appeal.
the name of Martin Lacerna in said certificate of title is merely
descriptive of the civil status of Martin Lacerna, the registered WHEREFORE, the writ of execution complained of is set aside and
owner, and does not necessarily prove that the land is "conjugal" annulled. Instead of enforcing said writ, the respondent Trial Court
property of Lacerna and petitioner hereyn. Neither can petitioner is ordered to effect the partition of the land in question in
invoke the presumption established in Article 160 of the Civil Code accordance with the terms of its now final and executory decision
that property acquired during the marriage belongs to the conjugal and the provisions of Rule 69 of the Rules of Court. No
partnership, there being no proof of her alleged marriage to Martin pronouncement as to costs in this instance.
Lacerna except that which arises by implication from the
aforestated entry in the certificate of title and for the far more SO ORDERED.
compelling reason that the homestead claim on the land was shown
to have been perfected during Martin Lacerna's marriage to
Eustaquia Pichan, mother of the private respondents. The ruling
in Maramba vs. Lozano 19 that the presumption does not operate
where there is no showing as to when property alleged to be
conjugal was acquired applies with even greater force here.
The writ of execution, however, must be set aside, though not for
the reasons urged in the petition. The judgment of the respondent
Trial Court which was affirmed by the Intermediate Appellate Court
merely declared the private respondents entitled to one-half of the
land in question, without specifically ordering partition and delivery
to them of said half portion. A writ of execution cannot vary the
terms of the judgment it is issued to satisfy, or afford relief different
from, or not clearly included in, what is awarded by said judgment.
Even if the judgment in question is construable as authorizing or
directing a partition of the land, the mechanics of an actual partition
should follow the procedure laid down in Rule 69 of the Rules of
Court which does not contemplate or provide for the intervention of
the sheriff in the manner prescribed in the writ complained of.
Both the Trial Court, in rendering the judgment in question, and the
Intermediate Appellate Court, in affirming the same, appear to have
overlooked the fact that the surviving spouse is the legal and
compulsory heir of the deceased husband or wife; otherwise,
consistent with the finding that the half portion of the land sued for
pertained to the late Eustaquia Pichan as her share in the conjugal
partnership with Martin Lacerna, they should have ruled that Martin
Lacerna concurred with the three private respondents in the
succession to said portion, each of them taking an equal
share. 20 Unfortunately, said error is beyond review because Martin
EN BANC
G.R. No. L-48137 October 4, 1943
In re testate estate of NARCISO A. PADILLA.
CONCEPCION PATERNO VDA. DE PADILLA, widow-appellee,
vs.
ISABEL BIBBY VDA. DE PADILLA, executrix-appellant.
BOCOBO, J.:
This case is an incident of the settlement of the testate estate of the
late Narciso A. Padilla. In order that his property may be divided
according to his last will and testament, it is necessary first to
liquidate the conjugal partnership. It was in connection with such
liquidation that the widow, Concepcion Paterno Vda. de Padilla,
commenced the instant proceedings by filing a petition wherein she
prayed, inter alia, that her paraphernal property be segregated from
the inventoried estate and delivered to her together with the
corresponding reimbursements and indemnities; that she be given
one-half of the conjugal partnership property; and that her
usufructuary right over one-half of the portion pertaining to the heir
instituted in the will be recognized. The Court of First Instance of
Manila rendered judgment declaring certain pieces of real estate
and jewelry as well as certain sums of money to be paraphernal, and
ordering the same to be delivered to the widow (appellee herein).
The trial court's judgment, as amended, reads:
En vista de los hechos y consideraciones que preceden, el
Juzgado dicta sentencia y declara:
(a) Que todos los bienes que constan en el inventario, y
sobre los cuales no se ha suscitado controversia por las
partes, son bienes gananciales;
(b) Que se nombran tres (3) Comisionados, uno a
recomendacion de la heredera instituida en el testamento,
otro a recomendacion de Da. Concepcion Paterno Vda. de
Padilla, y el tercero por el Juzgado, para que se hagan cargo
de avaluar las fincas o partes de fincas que se deben
justipreciar de conformidad con las conclusiones sentadas
en esta decision hagan las computaciones
correspondientes a fin de determinar el remanente liquido
de la sociedad de gananciales, tomando por base los
precios calculados y avaluados sobre dichos bienes, y
dividan por mitad el remanente liquido entre Da.
Concepcion Paterno Vda. de Padilla, y la heredera
testamentaria Da. Isabel Bibby Vda. de Padilla,
especificando los bienes que a cada una debe
corresponder;
(c) Que pagadas todas las deudas de la sociedad de
gananciales, dichos comisionados procederan a dividir en
tres partes los bienes que deben corresponder al difunto, a
fin de que las dos terceras partes sean adjudicadas a la
heredera testamentaria en pleno dominio, y la otra tercera
parte en nuda propiedad a la misma heredera
testamentaria y en usufructo a la viuda Concepcion Paterno
mientras ella viva.lawphil.net
(d) Que los gastos en que incurra esta Testamentaria por
los servicios de los Comisionados se paguen por ambas
partes, por mitad.
From the foregoing judgment the testator's mother and instituted
heir, Isabel Bibby Vda. de Padilla, appeals.
I court: (1) that the husband borrowed P7,000 from the wife to meet
The value in controversy being over P50,000, we have reviewed the
evidence. After a careful examination of the oral and documentary
proof, we find no error in the findings of fact made by the trial
court. From the evidence it appears that Narciso A. Padilla and
Concepcion Paterno were married on December 12, 1912. The
husband, who was a medical student, contributed a small capital to
the conjugal partnership at the time of the marriage. The wife, on
the other hand, brought to the marriage considerable property in
real estate, jewelry and cash. Practically all of the conjugal
partnership property came from the fruits of the paraphernal
property. The conjugal partnership lasted twenty-one years, the
husband having died on February 12, 1934. (The wife also died
recently, during the pendency of this appeal, but in this decision she
is referred to as if still living.) The common fortune, consisting of
real and personal property, is fairly large. The husband, who left no
children, executed a will giving his whole estate to his mother, Isabel
Bibby Vda. de Padilla, appellant herein. The property included in the
inventory is appraised at P261,000. Seven pieces of real estate are in
controversy in this case. The remaining ten real properties left by
the deceased husband admittedly pertain to the conjugal
partnership.
A thorough study of the evidence convinces us that the trial court
was right in finding that the following properties in Manila are
paraphernal: (1) the lot at 305 Arquiza Street and the demolished
improvements; (2) the lot at 1393-1409 Juan Luna Street and the
improvements that had been torn down; (3) the lot and
improvements (except the building constructed during the marriage
for P4,000) at 401-407 Camba Street; (4) the lot at 613-631 and 634-
636 Martin Ocampo Street, with the original "accesorias" and
a camarin which was destroyed in order that new "accesorias"
might be constructed, these new "accesorias" being of the conjugal
partnership; (5) the property at 620-A-H Callejon De la Fe; (6) one-
half of the property at 631 Regidor Street; and (7) nine twenty-
ninths (9/29) of the property at 302-306 R. Hidalgo Street.
We also agree with the finding of the lower court that certain
jewels, namely: two pairs of ear-rings, a bracelet, and a gold watch,
belong to the widow.
In like manner, we see no error in the following findings of the trial
his personal obligations; and (2) that the amount of P21,046.52 (the
remainder of P66,046.52) received by the wife during the marriage
was commingled with the conjugal partnership funds.
II
Several questions of law are raised in the present appeal. We shall
discuss them one by one.
1. The first legal controversy is on a sort of no-man's land where
many a legal battle has been fought. The issue is, How far is a
Torrens title conclusive and incontestable? Various manifestations
of this legal question have been decided by the courts, and while
certain of its aspects may still be doubtful, we are persuaded,
however, that there can be no doubt, as will presently be shown,
that what appears in the Torrens certificate in this case is neither
final nor incontrovertible.
Appellant contends that because certain of these real estates (on
Camba, Martin Ocampo and Regidor Streets) have been registered
in the names of both spouses, Narciso Padilla and Concepcion
Paterno de Padilla, and considering the presumption in Art. 1407 of
the Civil Code, these properties must be held to be of the conjugal
partnership. The trial court, however, found that the whole
purchase price of the Camba and Martin Ocampo properties, and
one-half of the purchase price of the Regidor property, were from
the wife's exclusive funds, and therefore the whole of the original
Camba and Ocampo estates and one-half of the Regidor realty must
be adjudged paraphernal, in spite of the fact that the certificates of
title are in the names of both spouses.
There is nothing sacrosanct and definitive in the certificate of title
when the conjugal partnership is liquidated. The true and real
owner may be shown — whether it be the husband, or the wife, or
both. Thus, in Flores vs. Flores, 48 Phil. 288, this Court held that
property acquired during the marriage but registered in the
husband's name still belonged to the conjugal partnership. A similar
ruling was announced when the real estate was registered in the
wife's name. Romero vs. Sheriff, 53 Phil., 51. But the appellant
maintains that the converse is not true; and that even if evidence is
admissible to alter the conjugal character of the property, such
evidence must be clear, strong and convincing (citing Art 1407, Civil
Code, and Ahern vs. Julian, 39 Phil., 607).
We are of the opinion that an exception should in no wise be made
when the property is registered in the names of both spouses. In
such instances, the property may be shown to be really of either
spouse, though recorded in the names of both. The underlying
reason is the same in all cases, which is the confidential relation
between husband and wife. Because of the feelings of trust existing
between the spouses, certificates of title are often secured in the
name of both, or of either, regardless of the true ownership of the
property, and regardless of the source of the purchase money. It is
thus but fair that on liquidation of the partnership, the trust should
be recognized and enforced, so that the real ownership of the
property may be established. The principle that a trustee who takes
a Torrens title in his name cannot repudiate the trust by relying on
the registration, is one of the well-known limitations upon the
finality of a decree of title. (See Severino vs. Severino, 44 Phil., 343).
It is because a certificate of title under the Torrens system should
not be turned into an instrument for deprivation of ownership. The
Torrens plan, created to protect dominion, is not a Frankenstein
that destroys this very dominion. A trust, deriving its strength from
confidence, which runs though with the woof and warp of the social
fabric, does not lose that character on the plea that a Torrens
certificate of title is conclusive. It is meet and seemly that this
should be so, for any rule that permits the violation of a fiduciary
duty would be a reproach to any legal system. These observations
apply with peculiar force to the relations between husband and
wife. In a normal marriage, the spouses trust each other so implicitly
that they attach little or no importance to what appears in legal
documents, fully and unreservedly believing that no technicality
would be availed of to claim what in very truth pertains to one or
the other. Things would indeed come to a sorry pass if the
jurisprudence of this country should harbor any theory which would
impair this intimate reliance, this unquestioning loyalty, this
befitting faith between husband and wife.
There is another reason why evidence of the nature of any property
as paraphernal should be allowed, despite the Torrens certificate. It
is this: the manager of the conjugal partnership is the husband. He
may, without let or hindrance, deal with and dispose of any
property appearing in the names of both spouses, even if the
property should really be paraphernal. In the course of years, any
such property may have been sold, transformed or substituted.
Upon liquidation of the conjugal partnership, to forbid an
investigation of the true source of the purchase price of the original
property, after many years of marriage, would make liquidation a
mockery, for it would be well nigh impossible to trace and identity
the paraphernal property. The law positively ordains that the wife's
property (dowry and paraphernal) should be returned, even before
the payment of the debts of the conjugal partnership (Art. 1421 and
1422, Civil Code). But how can this mandate of the law be complied
with when the means to that end are withheld and forbidden?
As for the appellants proposition that the evidence to rebut the
Torrens certificates and the legal presumption in favor of the
conjugal partnership (Art. 1407) should be clear, strong and
convincing, we find that the proof, both oral and documentary, in
the record is more than sufficient to offset and counteract the
certificates of title and the presumption of law.
2. The second legal inquiry is the interpretation of Article 1404, par.
2, Civil Code: whether the value of the paraphernal land to be
reimbursed to the wife is that obtaining at the time of the
liquidation of the conjugal partnership. With conjugal funds the
husband constructed buildings on the wife's lots on Arquiza, Juan
Luna, Camba and Martin Ocampo streets. The court a quo ordered
that the value of the lots occupied by these constructions, to be
paid to the widow, should be that prevailing at the time of the
liquidation of the conjugal partnership.
Appellant claims such pronouncement of the trial court to be
erroneous because from the time of the construction of the
buildings, the conjugal partnership became the owner of the whole
property (lot and building) in each instance, and therefore the
subsequent increase in value should accrue to the conjugal
partnership, and any depreciation should be suffered by the
partnership.
Article 1404, Civil Code, provides:
Las expensas utiles hechas en los beines peculiares de
cualquiera de los conyuges mediante anticipaciones de la
sociedad o por la industria del marido o de la mujer, son
ganaciales.
Los seran tambien los edificios construidos durante el
matrimonio en suelo propio de uno de los conyuges
abonandose el valor del suelo al conyuge a quien
pertenezca.
Appellant's theory is untenable. The ownership of the land is
retained by the wife until she is paid the value of the lot, as a result
of the liquidation of the conjugal partnership. The mere
construction of a building from common funds does not
automatically convey the ownership of the wife's land to the
conjugal partnership. Such a mode of using the land, namely, by
erecting a building thereon, is simply an exercise of the right of
usufruct pertaining to the conjugal partnership over the wife's land.
As Manresa says, "la sociedad de gananciales es realmente la
usufructuaria de los bienes privativos de cada conyuge." (Comment
on Art. 1408.) In consequence of this usufructuary right, the
conjugal partnership is not bound to pay any rent during the
occupation of the wife's land because if the lot were leased to a
third person, instead of being occupied by the new construction
from partnership funds, the rent from the third person would
belong to the conjugal partnership. Therefore, before payment of
the value of the land is made from the common funds, inasmuch as
the owner of the land is the wife, all the increase or decrease in its
value must be for her benefit or loss. And when may she demand
payment? Not until the liquidation of the conjugal partnership
because up to that time, it is neither necessary nor appropriate to
transfer to the partnership the dominion over the land, which is
lawfully held in usufruct by the conjugal partnership during the
marriage.
The foregoing finds support, by analogy, in Article 361, Civil Code,
which reads:
Art. 361. El dueño del terreno en que se edificare,
sembrare o plantare de buena fe, tendra derecho a hacer
suya la obra, siembra o plantacion, previa
la indemnizacion establecida en los arts. 453 y 454, o a
obligar al que fabrico o planto a pagarle el precio del
terreno, y al que sembro, la renta correspondiente.
(Emphasis supplied.)
In the instant case, no reimbursement for the value of the lots was
made from the common funds during the marriage.
Moreover, Sanchez Roman declares:
Los derechos de la muyer en la sociedad legal de
gananciales se remiten todos a la epoca de su disolucion y
liquidacion, cuando se trata de la existencia normal de la
sociedad legal de gananciales. (Emphasis supplied.)
And Manresa states:
El valor fijado a los bienes debe ser el que realmente
tengan el dia de la disolucion de la sociedad, con las
necesarias aclaraciones, para conocer lo que pueda tener
caracter propio o ganancial. (Emphasis supplied).
Furthermore, the wife should not be allowed to demand payment of
the lot during the marriage and before liquidation because this
would unduly disturb the husband's management of the conjugal
partnership. The scheme of the Civil Code is that in the interest of
successful administration of the common property, the wife should
not interfere with the husband's way of directing the affairs of the theory is that articles 1408 (par. 1) and 441 should govern, so that
partnership. Besides, such premature requirement of the value the amount is chargeable against the conjugal partnership. These
making improvements, whereas article 1404, par. 2, has for its provisions read thus:
purpose the encouragement of construction by the husband.
(Manresa's comment on Art. 1404.) On the other hand, if the Art. 1408. Seran de cargo de la sociedad de gananciales:
payment for the lot is deferred till the liquidation of the conjugal
partnership, the initial outlay for the erection of the building would 1.o. Todas las deudas y obligaciones contraidas durantes el
be less, and consequently the construction would be facilitated. matrimonio por el marido, y tabien las que contrajere la
mujer en los casos en que pueda legalmente obligar a la
3. The next question of law is whether the value of the paraphernal sociedad. . . .
buildings which were demolished to make possible the construction
of new ones, at the expense of the conjugal partnership, should be Art. 1411. Lo perdido y pagado durante el matrimonio por
reimbursed to the wife. Such tearing down of buildings was done alguno de los conyuges en cualquier clase de juego, no
with regard to the Arquiza, Juan Luna and Martin Ocampo disminuira su parte respectiva de los ganaciales. . . .
properties. Appellant maintains that it is doubtful if these buildings
had any value at the time they were destroyed, and that there is no
It is true that article 1385 ordains that the fruits of the paraphernal
evidence that the conjugal partnership realized any benefit
property form part of the conjugal partnership and are subject to
therefrom. However, we are certain these old buildings had some
the payment of the charges against the marriage. But as Manresa
value, though small, and it will be the duty of the commissioners
says, article 1386 contains a limitation on the first part (just cited) of
mentioned in the judgment appealed from, to assess that value. We
article 1385.
entertain no manner of doubt that the conjugal partnership derived
a positive advantage from the demolition, which made it possible to
It is likewise true that under article 1408, par. 1, all debts and
erect new constructions for the partnership. It is but just, therefore,
obligations contracted by the husband during the marriage are
that the value of the old buildings at the time they were torn down
chargeable against the conjugal partnership, but article 1386 is an
should be paid to the wife. We dismiss, as without any merit
exception to the rule, and exempts the fruits of the paraphernal
whatever, the appellant's contention that because article 1404, par.
property from the payment of the personal obligations of the
2, of the Civil Code does not provide for the reimbursement of the
husband, unless there is proof that they redounded to the benefit of
value of demolished improvements, the wife should not be
the family. It is self-evident that the amounts in question did not
indemnified. Suffice it to mention the ancient maxim of the Roman
benefit the family. Hence, they cannot be charged against the fruits
law, "Jure nature aequum est, meminem cum alterius detrimento et
of the paraphernal property. They should be paid from the
injuria fieri locupletiorem" which was restated by the Partidas in
husband's funds. We quote from Manresa's comment on article
these terms: "Ninguno non deue enriquecerse tortizeramente con
1386:
dano de otro." When the statutes are silent or ambiguous, this is
one of those fundamental principles which the courts invoke in
order to arrive at a solution that would respond to the vehement No hay, desde luego, contradiccion entre los preceptos de
urge of conscience. los articulos 1408 y 1386; hay solo una regla general
contenida en aquel, y una excepcion contenida en este. El
articulo 1386, como especial, modifica la regla, y ha de
4. Then, there is the total amount of P7,000 borrowed by the
aplicarse siempre que las obligaciones personales
husband from the wife, thus itemized: (1) P3,000 lost in horse-races
contraidas por el marido quieren hacerse efectivas en
and in poker; (2) P3,000 spent for pastime ("diversion"); and (3)
frutos o rentas de los bienes parafernales de la mujer.
P1,000 to pay a personal debt of the husband. The trial court
applied article 1386 of the Civil Code, and ordered that said amount
of P7,000 be deducted from the husband's share. But appellant's La frase 'obligaciones personales', se reduce a deudas u
obligaciones contraidas privativamente por el marido,
 deudas y obligaciones que son desde luego propiamente
personales o no reales, pues si se reclamase contra bienes
o derecho especial y legalmente efectos al cumplimiento
de la obligacion, no podria haber inconveniente para que
esta se hiciese efectiva. Por lo demas, el espiritu del
precepto es que el marido no puede aprovecharse en
interes proprio o para atenciones privativas o personales
suyas, de los frutos de los bienes parafernales; que estos se
destinen a las verdaderas necesidades y cargas de la
sociedad conyugal, y, por tanto, se emplean, como deben,
en beneficio de la familia.
Valverde in his "Tratado de Derecho Civil Español," Vol. 4, pp. 347-
348, says:
Consecuencia natural de esta especie de separacion de
responsabilidades y de patrimonios, es que el Codigo
ordene que 'las obligaciones personales del marido no
podran hacerse efectivas sobre los frutos de los bienes
parafernales, a menos que se pruebe que redundaron en
provecho de la familia'. En efecto, el marido, como
administrador de la sociedad legal, obliga a esta con sus
actos, y por eso los gananciales responden de las deudad y
obligaciones contraidas por el marido durante el
matrimonio, presumiendose hechos en interes de la
sociedad, a no ser que se pruebe lo contrario, pero como
caso de excepcion, si los gananciales son frutos de bienes
parafernales, entonces, para que respondan tales frutos de
las obligaciones del marido, es preciso que prueba este que
las dichas obligaciones redundaron en provecho de la
familia, pues por el precepto del codigo, si los frutos de los
parafernales son gananciales, cuando de las deudad del
marido se trata, solo son responsables esos frutos en el
caso que se demuestre que redundaron en provecho de
aquella. (Emphasis supplied.)
Oyuelos, in his work, "Digesto: Principios, Doctrina y Jurisprudencia
Referentes al Codigo Civil Español" (Vol. 6, pp. 79-80), has this to
say:
(c) Fundamento de la exencion de los frutos. — El articulo
1386 es un complemento de los articulos 1385, 1408, 1413,
1417, 1433 y 1434, y se inspira en los mismos principios
economicos de la familia, porque si los frutos de los
parafernales forman parte de la sociedad conyugal, que
subsiste mientras no se disuelva el matrimonio o se decrete
la separacion de bienes, y si a cargo de la misma corre el
sostenimiento de la familia, la educacion de los hijos y las
deudas que el marido contraiga como jefe de ella, es logico
concluir, sobre todo teniendo presente el articulo 1385,
que aun prescindiendo del texto claro y terminante del
articulo 1386, las responsabilidades del marido en tanto
puedan hacerse efectivas con los productos de dichos
bienes en cuanto se hubiesen contraido en provecho de la
familia; no existiendo contradiccion entre los articulos 1386
y 1408, numero 1.0 (alegada en el concepto de que el
articulo 1386 no puede aplicarse al caso de subsistencia del
matrimonio), por cuanto la esfera de actuacion del 1386 no
se contrae al estado de derecho consiguiente a la
separacion de bienes de los respectivos esposos.
Is the amount under consideration, P7,000, being enforced against
the fruits of the paraphernal property? Yes, because practically all of
the conjugal partnership assets have been derived from the fruits of
the wife's exclusive property.
In the case of Fidelity and Surety Co. vs. Ansaldo, 37 Off. Gaz., 1164,
(promulgated November 26, 1938), this Court held:
Article 1386 of the Civil Code provides that the personal obligations
of the husband may not be paid out of the fruits of the paraphernal
property, unless it be proved that such obligations redounded to the
benefit of the family. It, as contended by the appellant, the
properties levied upon in Civil Case No. 33923 of the Court of First
Instance of Manila, entitled "Fidelity & Surety Company of the
Philippines Islands vs. Romarico Agcaoili and Angel A. Ansaldo" were
acquired with the fruits of the paraphernal properties belonging to
Margarita Quintos, said properties, although conjugal (art. 1385,
par. 1 and art. 1408, Civil Code; Mirasol vs. Lim, 59 Phil., 701, 709)
are not liable for the personal obligations of the husband, unless
said obligations redounded to the benefit of the family. Paragraph 1
of article 1408 of the Civil Code makes all debts and obligations
contracted during the marriage by the husband chargeable against
the conjugal partnership, as a general rule, that is to say, although
the fruits of the paraphernal property of the wife are conjugal, they
do not respond for the personal obligations of the latter unless said
obligations have redounded to the benefit of the family."
In the sentence of January 15, 1917, of the Supreme Tribunal of
Spain, the following doctrine is enunciated:
Considerando a mayor abundamiento que si bien en orden
al regimen familiar y conforme a la doctina legal
establecida por el Tribunal Supremo, interpretando el art.
1385 del expresado Codigo, al marido incumbe
exclusivamente la administracion de los frutos de los
bienes parafernales como parte del haber de la sociedad
conyugal, esta potsted esta condicionada y regulada por el
1386, al prohibir al esposo el aprovechamiento de tales
rendimientos en benficio propio o sea de sus obligaciones
personales, imponiendole por modo expreso, el deber de
aplicarlos al levantamiento de las cargas matrimoniales,
pues de otra forma se desnaturalizaria la reserva y
privilegio que constituye el concepto del patrimonia
parafernal, con riesgo de infringir la disposicion legal que
precede invocada. (Emphasis supplied.)
In the instant case, it is quite plain that if the amount of P7,000.00
under review should be charged against the conjugal partnership
property which came almost exclusively from the fruits of the
paraphernal property, the reservation and privilege established by
law on behalf of the paraphernal patrimony would be encroached
upon and tempered with.
There are just and sound reasons for article 1386. The wife
contributes the fruits, interests, and rents of her paraphernal
property to help bear the expenses of the family. When the husband
contracts any debt in his own name, it is chargeable against the
conjugal partnership as a general rule (article 1408, par. 1) because
it is presumed that the debt is beneficial to the family. But when
such a debt is enforced against the fruits of the paraphernal
property, such a presumption no longer applies, considering article
1386. On the contrary, it must be proved that the purpose for which
the wife contributes the fruits of her paraphernal property has been
accomplished through such personal debt of the husband.
Appellant relies on article 1411 which reads:
 Lo perdido y pagado por alguno de los conyuges en juego
licito, sera a cargo de la sociedad de gananciales.
Lo perdido y no pagado por alguno de los conyuges en
juego licito, sera a cargo de la sociedad de ganaciales.
Wherefore, with the modification that the appellee shall pay such
interest, if any, on P9,229.48 as the Monte de Piedad would have
paid if the amount had not been withdrawn, the judgment appealed
from should be and is hereby affirmed, with costs against the
appellant. So ordered.

But this provision should be applied only when the debt is not being Yulo, C.J., Moran, Ozaeta and Paras, JJ., concur.
charged against the fruits of the paraphernal property. If the
conjugal partnership assets are derived almost entirely, if not
entirely, from the fruits of the paraphernal property, as in this case,
it is neither lawful nor equitable to apply article 1411 because by so
doing, the fruits of the paraphernal property would in reality be the
only kind of property to bear the husband's gambling losses. In
other words, what the husband loses in gambling should be
shouldered by him and not by the conjugal partnership if the latter's
assets come solely from the fruits of the paraphernal property. This
is but just, because gambling losses of the husband cannot by any
process of reasoning be considered beneficial to the family. By the
same token, to charge the gambling losses against the conjugal
partnership in such a situation would fly in the case of the stern
prohibition of article 1386, which protects the fruits of the
paraphernal property precisely against expenses of the husband
that are of no help to the family.

We are satisfied that the foregoing is by and large a fair and rational
interpretation of articles 1408 and 1411, which must be read in the
light of article 1386. If such a qualification of articles 1408 and 1411
is not made, article 1386 becomes nugatory.

5. The next question is whether interest should be paid by the

widow on the amount of P9,229.48 withdrawn by her from the
Monte de Piedad savings account No. 3317 of the conjugal
partnership. There is no question that the principal should be
credited to the partnership as the appellee's counsel does not
dispute this point. The withdrawal of said amount was made on
April 7, 1934, about two months after the husband's death, and
while the widow was a special administratrix. There being no
evidence in the record as to the purpose for which this amount was
used, although counsel for appellee suggests the possibility that the
same might have been disbursed for funeral and similar expenses,
we believe she should pay such interest, if any, as the Monte de
Piedad would have paid on the amount aforesaid, had not the same
been withdrawn by the widow.
EN BANC
G.R. No. L-39587 March 24, 1934
ALEKO E. LILIUS, ET AL., plaintiffs-appellants,
vs.
THE MANILA RAILROAD COMPANY, defendant-appellant.
Harvey and O'Brien for plaintiffs-appellants.
Jose C. Abreu for defendant-appellant.
VILLA-REAL, J.:
This case involves two appeals, one by the defendant the Manila
Railroad Company, and the other by the plaintiffs Aleko E. Lilius et
al., from the judgment rendered by the Court of First Instance of
Manila, the dispositive part of which reads as follows:
Wherefore, judgment is rendered ordering the defendant
company to pay to the plaintiffs, for the purposes above
stated, the total amount of P30,865, with the costs of the
suit. And although the suit brought by the plaintiffs has the
nature of a joint action, it must be understood that of the
amount adjudicated to the said plaintiffs in this judgment,
the sum of P10,000 personally belongs to the plaintiff Sonja
Maria Lilius; the sum of P5,000, to the plaintiff Brita
Marianne Lilius; the sum of P250, to Dr. Marfori of the
Calauan Hospital, Province of Laguna, and the balance to
the plaintiff Aleko E. Lilius.
In support of its appeal, the appellant the Manila Railroad Company
assigns nine alleged errors committed by the trial court in its said
judgment, which will be discussed in the course of this decision.
As a ground of their appeal, the appellants Aleko E. Lilius et al., in
turn, assign two alleged errors as committed by the same court a
quo in its judgment in question, which will be discussed later.
This case originated from a complaint filed by Aleko E. Lilius et al.,
praying, under the facts therein alleged, that the Manila Railroad
Company be ordered to pay to said plaintiffs, by way of indemnity
for material and moral damages suffered by them through the fault
and negligence of the said defendant entity's employees, the sum of left side of the road. Several people, who seemed to have alighted
P50,000 plus legal interest thereon from the date of the filing of the from the said truck, were walking on the opposite side. He slowed
complaint, with costs. down to about 12 miles an hour and sounded his horn for the
people to get out of the way. With his attention thus occupied, he
The defendant the Manila Railroad Company, answering the did not see the crossing but he heard two short whistles.
complaint, denies each and every allegation thereof and, by way of Immediately afterwards, he saw a huge black mass fling itself upon
special defense, alleges that the plaintiff Aleko E. Lilius, with the him, which turned out to be locomotive No. 713 of the defendant
cooperation of his wife and coplaintiff, negligently and recklessly company's train coming eastward from Bay to Dayap station. The
drove his car, and prays that it be absolved from the complaint. locomotive struck the plaintiff's car right in the center. After
dragging the said car a distance of about ten meters, the locomotive
The following facts have been proven at the trial, some without threw it upon a siding. The force of the impact was so great that the
question and the others by a preponderance of evidence, to wit: plaintiff's wife and daughter were thrown from the car and were
picked up from the ground unconscious and seriously hurt. In spite
of the efforts of engineer Andres Basilio, he was unable to stop the
The plaintiff Aleko E. Lilius has, for many years, been a well-known
locomotive until after it had gone about seventy meters from the
and reputed journalist, author and photographer. At the time of the
crossing.
collision in question, he was a staff correspondent in the Far East of
the magazines The American Weekly of New York and The Sphere of
London. On the afternoon of the same day, the plaintiff's entered St. Paul's
Hospital in the City of Manila where they were treated by Dr.
Waterous. The plaintiff Aleko E. Lilius suffered from a fractured
Some of his works have been translated into various languages. He
nose, a contusion above the left eye and a lacerated wound on the
had others in preparation when the accident occurred. According to
right leg, in addition to multiple contusions and scratches on various
him, his writings netted him a monthly income of P1,500. He utilized
parts of the body. As a result of the accident, the said plaintiff was
the linguistic ability of his wife Sonja Maria Lilius, who translated his
highly nervous and very easily irritated, and for several months he
articles and books into English, German, and Swedish. Furthermore,
had great difficulty in concentrating his attention on any matter and
she acted as his secretary.
could not write articles nor short stories for the newspapers and
magazines to which he was a contributor, thus losing for some time
At about 7 o'clock on the morning of May 10, 1931, the plaintiff, his
his only means of livelihood.
wife Sonja Maria Lilius, and his 4-year old daughter Brita Marianne
Lilius, left Manila in their Studebaker car — driven by the said
The plaintiff Sonja Maria Lilius suffered from fractures of the pelvic
plaintiff Aleko E. Lilius — for the municipality of Pagsanjan, Province
bone, the tibia and fibula of the right leg, below the knee, and
of Laguna, on a sight-seeing trip. It was the first time that he made
received a large lacerated wound on the forehead. She underwent
said trip although he had already been to many places, driving his
two surgical operations on the left leg for the purpose of joining the
own car, in and outside the Philippines. Where the road was clear
fractured bones but said operations notwithstanding, the leg in
and unobstructed, the plaintiff drove at the rate of from 19 to 25
question still continues deformed. In the opinion of Dr. Waterous,
miles an hour. Prior thereto, he had made the trip as far as Calauan,
the deformity is permanent in character and as a result the plaintiff
but never from Calauan to Pagsanjan, via Dayap. He was entirely
will have some difficulty in walking. The lacerated wound, which she
unacquainted with the conditions of the road at said points and had
received on her forehead, has left a disfiguring scar.
no knowledge of the existence of a railroad crossing at Dayap.
Before reaching the crossing in question, there was nothing to
The child Brita Marianne Lilius received two lacerated wounds, one
indicate its existence and inasmuch as there were many houses,
on the forehead and the other on the left side of the face, in
shrubs and trees along the road, it was impossible to see an
addition to fractures of both legs, above and below the knees. Her
approaching train. At about seven or eight meters from the crossing,
condition was serious and, for several days, she was hovering
coming from Calauan, the plaintiff saw an autotruck parked on the
between life and death. Due to a timely and successful surgical
operation, she survived her wounds. The lacerations received by the
child have left deep scars which will permanently disfigure her face,
and because of the fractures of both legs, although now completely
cured, she will be forced to walk with some difficulty and
continuous extreme care in order to keep her balance.
Prior to the accident, there had been no notice nor sign of the
existence of the crossing, nor was there anybody to warn the public
of approaching trains. The flagman or switchman arrived after the
collision, coming from the station with a red flag in one hand and a
green one in the other, both of which were wound on their
respective sticks. The said flagman and switchman had many times
absented himself from his post at the crossing upon the arrival of a
train. The train left Bay station a little late and therefore traveled at
great speed.
Upon examination of the oral as well as of the documentary
evidence which the parties presented at the trial in support of their
respective contentions, and after taking into consideration all the
circumstances of the case, this court is of the opinion that the
accident was due to negligence on the part of the defendant-
appellant company, for not having had on that occasion any
semaphore at the crossing at Dayap, to serve as a warning to
passers-by of its existence in order that they might take the
necessary precautions before crossing the railroad; and, on the part
of its employees — the flagman and switchman, for not having
remained at his post at the crossing in question to warn passers-by
of the approaching train; the stationmaster, for failure to send the
said flagman and switchman to his post on time; and the engineer,
for not having taken the necessary precautions to avoid an accident,
in view of the absence of said flagman and switchman, by slackening
his speed and continuously ringing the bell and blowing the whistle
before arriving at the crossing. Although it is probable that the
defendant-appellant entity employed the diligence of a good father
of a family in selecting its aforesaid employees, however, it did not
employ such diligence in supervising their work and the discharge of
their duties because, otherwise, it would have had a semaphore or
sign at the crossing and, on previous occasions as well as on the
night in question, the flagman and switchman would have always
been at his post at the crossing upon the arrival of a train. The
diligence of a good father of a family, which the law requires in
order to avoid damage, is not confined to the careful and prudent
selection of subordinates or employees but includes inspection of
their work and supervision of the discharge of their duties.
However, in order that a victim of an accident may recover
indemnity for damages from the person liable therefor, it is not
enough that the latter has been guilty of negligence, but it is also
necessary that the said victim has not, through his own negligence,
contributed to the accident, inasmuch as nobody is a guarantor of
his neighbor's personal safety and property, but everybody should
look after them, employing the care and diligence that a good father
of a family should apply to his own person, to the members of his
family and to his property, in order to avoid any damage. It appears
that the herein plaintiff-appellant Aleko E. Lilius took all precautions
which his skill and the presence of his wife and child suggested to
him in order that his pleasure trip might be enjoyable and have a
happy ending, driving his car at a speed which prudence demanded
according to the circumstances and conditions of the road,
slackening his speed in the face of an obstacle and blowing his horn
upon seeing persons on the road, in order to warn them of his
approach and request them to get out of the way, as he did when
he came upon the truck parked on the left hand side of the road
seven or eight meters from the place where the accident occurred,
and upon the persons who appeared to have alighted from the said
truck. If he failed to stop, look and listen before going over the
crossing, in spite of the fact that he was driving at 12 miles per hour
after having been free from obstacles, it was because, his attention
having been occupied in attempting to go ahead, he did not see the
crossing in question, nor anything, nor anybody indicating its
existence, as he knew nothing about it beforehand. The first and
only warning, which he received of the impending danger, was two
short blows from the whistle of the locomotive immediately
preceding the collision and when the accident had already become
inevitable.
In view of the foregoing considerations, this court is of the opinion
that the defendant the Manila Railroad Company alone is liable for
the accident by reason of its own negligence and that of its
employees, for not having employed the diligence of a good father
of a family in the supervision of the said employees in the discharge
of their duties.
The next question to be decided refers to the sums of money fixed
by the court a quo as indemnities for damages which the defendant
company should pay to the plaintiffs-appellants.
With respect to the plaintiff-appellant Aleko E. Lilius, although this
court believes his claim of a net income of P1,500 a month to be
somewhat exaggerated, however, the sum of P5,000, adjudicated to
him by the trial court as indemnity for damages, is reasonable.
As to the sum of P10,635 which the court awards to the plaintiffs by
way of indemnity for damages, the different items thereof
representing doctor's fees, hospital and nursing services, loss of
personal effects and torn clothing, have duly been proven at the
trial and the sum in question is not excessive, taking into
consideration the circumstances in which the said expenses have
been incurred.
Taking into consideration the fact that the plaintiff Sonja Maria
Lilius, wife of the plaintiff Aleko E. Lilius is — in the language of the
court, which saw her at the trial — "young and beautiful and the big
scar, which she has on her forehead caused by the lacerated wound
received by her from the accident, disfigures her face and that the
fracture of her left leg has caused a permanent deformity which
renders it very difficult for her to walk", and taking into further
consideration her social standing, neither is the sum of P10,000,
adjudicated to her by the said trial court by way of indemnity for
patrimonial and moral damages, excessive. In the case
of Gutierrez vs. Gutierrez (56 Phil., 177), the right leg of the plaintiff
Narciso Gutierrez was fractured as a result of a collision between
the autobus in which he was riding and the defendant's car, which
fractured required medical attendance for a considerable period of
time. On the day of the trial the fracture had not yet completely
healed but it might cause him permanent lameness. The trial court
sentenced the defendants to indemnify him in the sum of P10,000
which this court reduced to P5,000, in spite of the fact that the said
plaintiff therein was neither young nor good-looking, nor had he
suffered any facial deformity, nor did he have the social standing
that the herein plaintiff-appellant Sonja Maria Lilius
enjoys.1ªvvphi1.ne+
As to the indemnity of P5,000 in favor of the child Brita Marianne
Lilius, daughter of Aleko E. Lilius and Sonja Maria Lilius, neither is
the same excessive, taking into consideration the fact that the
lacerations received by her have left deep scars that permanently
disfigure her face and that the fractures of both her legs
permanently render it difficult for her to walk freely, continuous
extreme care being necessary in order to keep her balance in
addition to the fact that all of this unfavorably and to a great extent
affect her matrimonial future.
With respect to the plaintiffs' appeal, the first question to be
decided is that raised by the plaintiff Aleko E. Lilius relative to the
insufficiency of the sum of P5,000 which the trial court adjudicated
to him by way of indemnity for damages consisting in the loss of his
income as journalist and author as a result of his illness. This
question has impliedly been decided in the negative when the
defendant-appellant entity's petition for the reduction of said
indemnity was denied, declaring it to be reasonable.
As to the amount of P10,000 claimed by the plaintiff Aleko E. Lilius
as damages for the loss of his wife's services in his business as
journalist and author, which services consisted in going over his
writings, translating them into English, German and Swedish, and
acting as his secretary, in addition to the fact that such services
formed part of the work whereby he realized a net monthly income
of P1,500, there is no sufficient evidence of the true value of said
services nor to the effect that he needed them during her illness and
had to employ a translator to act in her stead.
The plaintiff Aleko E. Lilius also seeks to recover the sum of P2,500
for the loss of what is called Anglo-Saxon common law "consortium"
of his wife, that is, "her services, society and conjugal
companionship", as a result of personal injuries which she had
received from the accident now under consideration.
In the case of Goitia vs. Campos Rueda (35 Phil., 252, 255, 256), this
court, interpreting the provisions of the Civil Marriage Law of 1870,
in force in these Islands with reference to the mutual rights and
obligations of the spouses, contained in articles 44-48 thereof, said
as follows:
The above quoted provisions of the Law of Civil Marriage
and the Civil Code fix the duties and obligations of the
spouses. The spouses must be faithful to, assist, and
support each other. The husband must live with and
protect his wife. The wife must obey and live with her
husband and follow him when he changes his domicile or
residence, except when he removes to a foreign country. . .
. semaphore at a crossing an does not see to it that its flagman and
Therefore, under the law and the doctrine of this court, one of the
husband's rights is to count on his wife's assistance. This assistance
comprises the management of the home and the performance of
household duties, including the care and education of the children
and attention to the husband upon whom primarily devolves the
duty of supporting the family of which he is the head. When the
wife's mission was circumscribed to the home, it was not difficult to
assume, by virtue of the marriage alone, that she performed all the
said tasks and her physical incapacity always redounded to the
husband's prejudice inasmuch as it deprived him of her assistance.
However, nowadays when women, in their desire to be more useful
to society and to the nation, are demanding greater civil rights and
are aspiring to become man's equal in all the activities of life,
commercial and industrial, professional and political, many of them
spending their time outside the home, engaged in their businesses,
industry, profession and within a short time, in politics, and
entrusting the care of their home to a housekeeper, and their
children, if not to a nursemaid, to public or private institutions
which take charge of young children while their mothers are at
work, marriage has ceased to create the presumption that a woman
complies with the duties to her husband and children, which the law
imposes upon her, and he who seeks to collect indemnity for
damages resulting from deprivation of her domestic services must
prove such services. In the case under consideration, apart from the
services of his wife Sonja Maria Lilius as translator and secretary, the
value of which has not been proven, the plaintiff Aleko E. Lilius has
not presented any evidence showing the existence of domestic
services and their nature, rendered by her prior to the accident, in
order that it may serve as a basis in estimating their value.
Furthermore, inasmuch as a wife's domestic assistance and conjugal
companionship are purely personal and voluntary acts which neither
of the spouses may be compelled to render (Arroyo vs. Vazquez de
Arroyo, 42 Phil., 54), it is necessary for the party claiming indemnity
for the loss of such services to prove that the person obliged to
render them had done so before he was injured and that he would
be willing to continue rendering them had he not been prevented
from so doing.
In view of the foregoing considerations this court is of the opinion
and so holds: (1) That a railroad company which has not installed a
switchman faithfully complies with his duty of remaining at the
crossing when a train arrives, is guilty of negligence and is civilly
liable for damages suffered by a motorist and his family who cross
its line without negligence on their part; (2) that an indemnity of
P10,000 for a permanent deformity on the face and on the left leg,
suffered by a young and beautiful society woman, is not excessive;
(3) that an indemnity of P5,000 for a permanent deformity on the
face and legs of a four-year old girl belonging to a well-to-do family,
is not excessive; and (4) that in order that a husband may recover
damages for deprivation of his wife's assistance during her illness
from an accident, it is necessary for him to prove the existence of
such assistance and his wife's willingness to continue rendering it
had she not been prevented from so doing by her illness.
The plaintiffs-appellants are entitled to interest of 6 percent per
annum on the amount of the indemnities adjudicated to them, from
the date of the appealed judgment until this judgment becomes
final, in accordance with the provisions of section 510 of Act No.
190.
Wherefore, not finding any error in the judgment appealed from, it
is hereby affirmed in toto, with the sole modification that interest of
6 per cent per annum from the date of the appealed judgment until
this judgment becomes final will be added to the indemnities
granted, with the costs of both instances against the appellant. So
ordered.
Malcolm, Hull, Imperial, and Goddard, JJ., concur.
FIRST DIVISION
[G.R. No. 74577 : December 4, 1990.]
192 SCRA 21
CONSOLACION VILLANUEVA, Petitioner, vs. THE INTERMEDIATE
APPELLATE COURT, JESUS BERNAS and REMEDIOS Q. BERNAS,
Respondents.
DECISION
NARVASA, J.:
The spouses Graciano Aranas and Nicolasa Bunsa were the owners
in fee simple of a parcel of land identified as Lot 13, their ownership
being evidenced by Original Certificate of Title No. 0-3239 issued by
the Register of Deeds of Capiz on June 19, 1924. After they died,
their surviving children, Modesto Aranas and Federico Aranas,
adjudicated the land to themselves under a deed of extrajudicial
partition executed on May 2, 1952. The southern portion, described
as Lot 13-C, was thereby assigned to Modesto; the northern, to
Federico. 1
On March 21, 1953, Modesto Aranas obtained a Torrens title in his
name from the Capiz Registry of Property, numbered T-1346. He
died on April 20, 1973, at the age of 81 years. His wife, Victoria
Comorro, predeceased him dying at age 70 on July 16, 1971. They
had no children. 2
Now, it appears that Modesto was survived by two (2) illegitimate
children named Dorothea Aranas Ado and Teodoro C. Aranas. These
two borrowed P18,000.00 from Jesus Bernas. As security therefor
they mortgaged to Bernas their father's property, Lot 13-C. In the
"Loan Agreement with Real Estate Mortgage" executed between
them and Bernas on October 30, 1975, they described themselves
as the absolute co-owners of Lot 13-C. A relative, Raymundo Aranas,
signed the agreement as a witness. 3
Dorothea and Teodoro failed to pay their loan. As a result, Bernas
caused the extrajudicial foreclosure of the mortgage over Lot 13-C
on June 29, 1977 and acquired the land at the auction sale as the
highest bidder. 4 After the foreclosure sale, Dorothea and Teodoro
executed a deed of Extrajudicial Partition dated June 21, 1978, in
which they adjudicated the same Lot 13-C unto themselves in equal 4) that the lot in question is not expressly mentioned in the
shares pro-indiviso.: nad will; and
On October 25, 1978 Bernas consolidated his ownership over Lot 5) that TCT No. 15121 exists, and was issued in favor of
13-C, the mortgagors having failed to redeem the same within the defendant spouses Jesus Bernas and Remedios Bernas.:-
reglementary period, and had the latter's title (No. T-1346 in the cralaw
name of Modesto Aranas) cancelled and another issued in his name,
Trial ensued after which judgment was rendered adversely to the
TCT No. T-15121. 5
plaintiffs, Consolacion Villanueva and Raymundo Aranas. 7 The
About a month later, or on November 24, 1978, Consolacion dispositive part of the judgment reads as follows: 8
Villanueva and Raymundo Aranas — who, as aforestated, was an
WHEREFORE, IN VIEW OF THE FOREGOING, judgment is
instrumental witness in the deed of mortgage executed by Dorothea
hereby rendered in favor of the defendants and against the
and Teodoro Aranas on October 30, 1975 — filed a complaint with
plaintiffs as follows:
the Regional Trial Court at Roxas City against Jesus Bernas and his
spouse, Remedios Bernas. The case was docketed as Civil Case No. The plaintiffs' complaint is hereby dismissed and
V-4188, and assigned to Branch 14. In their complaint, the plaintiffs ordering the plaintiffs, jointly and severally, to pay
prayed that the latter's title over Lot 13-C, TCT No. T-15121, be the defendants the following:
cancelled and they be declared co-owners of the land. They
1) THREE THOUSAND FIVE HUNDRED
grounded their cause of action upon their alleged discovery on or
PESOS (P3,500.00) as attorney's fees;
about November 20, 1978 of two (2) wills, one executed on
February 11, 1958 by Modesto Aranas, and the other, executed on 2) FIVE HUNDRED PESOS (P500.00) as
October 29, 1957 by his wife, Victoria Comorro. Victoria Comorro's actual damages;
will allegedly bequeathed to Consolacion and Raymundo, and to
3) TEN THOUSAND PESOS (P10,000.00) as
Dorothea and Teodoro Aranas, in equal shares pro indiviso, all of
moral damages;
said Victoria Comorro's "interests, rights and properties, real and
personal . . . as her net share from (the) conjugal partnership 4) Declaring the defendants spouses Jesus
property with her husband, Modesto Aranas . . ." Modesto Aranas' Bernas and Remedios O. Bernas as
will, on the other hand, bequeathed to Dorothea and Teodoro legal owners of Lot No. 13-C and
Aranas (his illegitimate children) all his interests in his conjugal including all the improvements
partnership with Victoria "as well as his own capital property thereon;
brought by him to (his) marriage with his said wife." 6
5) Declaring the loan agreement with real
At the pre-trial, the parties stipulated on certain facts, including the estate mortgage (Exh. '2') entered
following: into by Dorothea Aranas Ado married
to Reynaldo F. Ado and Teodoro C.
1) that the property in question was registered before the
Aranas and Jesus Bernas married to
mortgage in the name of the late Modesto Aranas, married
Remedios O. Bernas, over the lot in
to Victoria Comorro, (covered by) TCT No. 1346, issued on
question executed on October 30,
March 21, 1953;
1975 before Notary Public Roland D.
2) that the wills above described were probated only after Abalajon and the corresponding
the filing of the case (No. V-4188); Certificate of Title No. T-15121
registered in the name of Jesus
3) that Consolacion Villanueva and Raymundo Aranas are
Bernas (defendants spouses) as
not children of either Modesto Aranas or Victoria Comorro;
having been executed and issued in
 accordance with law, are declared
legal and valid;
6) For failure to prove all other counter-
claim and damages, the same are
hereby dismissed.
7) To pay costs of this suit.
SO ORDERED."
The plaintiffs appealed to the Intermediate Appellate Court, where
they succeeded only in having the award of actual and moral
damages deleted, the judgment of the Regional Trial Court having
been otherwise affirmed in toto.
From this judgment of the Appellate Court, 9 Consolacion Villanueva
appealed to this Court. Her co-plaintiff, Raymundo Aranas, did not.
The only question is, what right was acquired by Consolacion
Villanueva over Lot 13-C and the improvements thereon standing by
virtue of Victoria Camorro's last will and testament giving to her all
of said Victoria's "interests, rights and properties, real and personal .
. . as her net share from (the) conjugal partnership property with her
husband, Modesto Aranas . . ." She is admittedly, not named an
heiress in Modesto Aranas' will.: nad
Certain it is that the land itself, Lot 13-C, was not "conjugal
partnership property" of Victoria Comorro and her husband,
Modesto Aranas. It was the latter's exclusive, private property,
which he had inherited from his parents — Graciano Aranas and
Nicolasa Bunsa, the original owners of the property — registered
solely in his name, under TCT T-1346. Whether Modesto succeeded
to the property prior or subsequent to his marriage to Victoria
Comorro — the record being unfortunately none too clear on the
point — is inconsequential. The property should be regarded as his
own exclusively, as a matter of law. This is what Article 148 of the
Civil Code clearly decrees: that to be considered as "the exclusive
property of each spouse" is inter alia, "that which is brought to the
marriage as his or her own," or "that which each acquires, during
the marriage, by lucrative title." Thus, even if it be assumed that
Modesto's acquisition by succession of Lot 13-C took place during
his marriage to Victoria Comorro, the lot would nonetheless be his
"exclusive property" because acquired by him, "during the marriage,
by lucrative title."
Moreover, Victoria Comorro died on July 16, 1971, about two (2)
years ahead of her husband, Modesto Aranas, exclusive owner of
Lot 13-C, who passed away on April 20, 1973. Victoria never subsequently arising and of which he had no knowledge or means of
therefore inherited any part of Lot 13-C and hence, had nothing of knowing prior to their assertion and ventilation.:-cralaw
Lot 13-C to bequeath by will or otherwise to Consolacion Villanueva
Finally, it bears stressing that the conclusion of the Intermediate
or anybody else.
Appellate Court that the evidence establishes that the property in
It would seem, however, that there are improvements standing on question was the exclusive property of one spouse, not conjugal, is a
Lot 13-C, and it is to these improvements that Consolacion factual one which, absent any satisfactory showing of palpable error
Villanueva's claims are directed. The question then is, whether or or grave abuse of discretion on the part of the Appellate Court in
not the improvements are conjugal property, so that Victoria reaching it, is not reviewable by this Court.
Comorro may be said to have acquired a right over them by
WHEREFORE, the judgment of the Intermediate Appellate Court
succession, as voluntary heir of Victoria Comorro.
subject of this appeal, being in accord with the evidence and
The Civil Code says that improvements, "whether for utility or applicable law and jurisprudence, is AFFIRMED, with costs against
adornment, made on the separate property of the spouses through the petitioner.
advancements from the partnership or through the industry of
SO ORDERED.
either the husband or the wife, belong to the conjugal partnership,"
and buildings "constructed, at the expense of the partnership,
during the marriage on land belonging to one of the spouses, also
pertain to the partnership, but the value of the land shall be
reimbursed to the spouse who owns the same." 10 Proof,
therefore, is needful of the time of the making or construction of
the improvements and the source of the funds used therefor, in
order to determine the character of the improvements as belonging
to the conjugal partnership or to one spouse separately. No such
proof was presented or proferred by Consolacion Villanueva or any
one else. What is certain is that the land on which the
improvements stand was the exclusive property of Modesto Aranas
and that where, as here, property is registered in the name of one
spouse only and there is no showing of when precisely the property
was acquired, the presumption is that it belongs exclusively to said
spouse. 11 It is not therefore possible to declare the improvements
to be conjugal in character.
Yet another consideration precludes relief to Consolacion Villanueva
and that is, that when Lot 13-C was mortgaged to Jesus Bernas, the
title was free of any lien, encumbrance or adverse claim presented
by or for Consolacion Villanueva or anybody else, and that when
Bernas subsequently consolidated his ownership over Lot 13-C and
obtained title in his name, the Registry of Deeds contained no
record of any lien, encumbrance or adverse claim affecting the
property. Furthermore, Bernas' mode of acquisition of ownership
over the property, i.e., by a mortgage sale, appears in all respects to
be regular, untainted by any defect whatsoever. Bernas must
therefore be deemed to have acquired indefeasible and clear title to
Lot 13-C which cannot be defeated or negated by claims