THIRD DIVISION

[ G.R. No. 155409, June 08, 2007 ]

VIRGILIO MAQUILAN, PETITIONER, VS. DITA MAQUILAN,
RESPONDENT. 

DECISION

AUSTRIA-MARTINEZ, J.: 

Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of
Court assailing the Decision[1] dated August 30, 2002 promulgated by the Court of
Appeals (CA) in CA-G.R. SP No. 69689, which affirmed the Judgment on
Compromise Agreement dated January 2, 2002 of the Regional Trial Court (RTC),
Branch 3, Nabunturan, Compostela Valley, and the RTC Orders dated January 21,
2002 and February 7, 2002 (ORDERS) in Civil Case No. 656.

The facts of the case, as found by the CA, are as follows:

Herein petitioner and herein private respondent are spouses who once had a blissful
married life and out of which were blessed to have a son. However, their once
sugar coated romance turned bitter when petitioner discovered that private
respondent was having illicit sexual affair with her paramour, which thus, prompted
the petitioner to file a case of adultery against private respondent and the latter's
paramour. Consequently, both the private respondent and her paramour were
convicted of the crime charged and were sentenced to suffer an imprisonment
ranging from one (1) year, eight (8) months, minimum of prision correccional as
minimum penalty, to three (3) years, six (6) months and twenty one (21) days,
medium of prision correccional as maximum penalty.

Thereafter, private respondent, through counsel, filed a Petition for Declaration of

Nullity of Marriage, Dissolution and Liquidation of Conjugal Partnership of Gains and
Damages on June 15, 2001 with the Regional Trial Court, Branch 3 of Nabunturan,
Compostela Valley, docketed as Civil Case No. 656, imputing psychological
incapacity on the part of the petitioner.

During the pre-trial of the said case, petitioner and private respondent entered into
a COMPROMISE AGREEMENT in the following terms, to wit:

1. In partial settlement of the conjugal partnership of gains, the parties agree to

the following:
 a. P500,000.00 of the money deposited in the bank jointly in the name of
the spouses shall be withdrawn and deposited in favor and in trust of
their common child, Neil Maquilan, with the deposit in the joint account
of the parties.

The balance of such deposit, which presently stands at P1,318,043.36,

shall be withdrawn and divided equally by the parties;

b. The store that is now being occupied by the plaintiff shall be allotted to
her while the bodega shall be for the defendant. The defendant shall
be paid the sum of P50,000.00 as his share in the stocks of the store
in full settlement thereof.

The plaintiff shall be allowed to occupy the bodega until the time the
owner of the lot on which it stands shall construct a building thereon;

c. The motorcycles shall be divided between them such that the

Kawasaki shall be owned by the plaintiff while the Honda Dream shall
be for the defendant;

d. The passenger jeep shall be for the plaintiff who shall pay the
defendant the sum of P75,000.00 as his share thereon and in full
settlement thereof;

e. The house and lot shall be to the common child.

2. This settlement is only partial, i.e., without prejudice to the litigation of other
conjugal properties that have not been mentioned;

xxxx
The said Compromise Agreement was given judicial imprimatur by the respondent
judge in the assailed Judgment On Compromise Agreement, which was
erroneously dated January 2, 2002.[2]

However, petitioner filed an Omnibus Motion dated January 15, 2002, praying for
the repudiation of the Compromise Agreement and the reconsideration of the
Judgment on Compromise Agreement by the respondent judge on the grounds that
his previous lawyer did not intelligently and judiciously apprise him of the
consequential effects of the Compromise Agreement.
The respondent Judge in the assailed Order dated January 21, 2002, denied the
aforementioned Omnibus Motion.

Displeased, petitioner filed a Motion for Reconsideration of the aforesaid Order, but
the same was denied in the assailed Order dated February 7, 2002.[3] (Emphasis
supplied)
The petitioner filed a Petition for Certiorari and Prohibition with the CA under Rule
65 of the Rules of Court claiming that the RTC committed grave error and abuse of
discretion amounting to lack or excess of jurisdiction (1) in upholding the validity of
the Compromise Agreement dated January 11, 2002; (2) when it held in its Order
dated February 7, 2002 that the Compromise Agreement was made within the
cooling-off period; (3) when it denied petitioner's Motion to Repudiate Compromise
Agreement and to Reconsider Its Judgment on Compromise Agreement; and (4)
when it conducted the proceedings without the appearance and participation of the
Office of the Solicitor General and/or the Provincial Prosecutor.[4]

On August 30, 2002, the CA dismissed the Petition for lack of merit. The CA held
that the conviction of the respondent of the crime of adultery does not ipso
facto disqualify her from sharing in the conjugal property, especially considering
that she had only been sentenced with the penalty of prision correccional, a penalty
that does not carry the accessory penalty of civil interdiction which deprives the
person of the rights to manage her property and to dispose of such property inter
vivos; that Articles 43 and 63 of the Family Code, which pertain to the effects of a
nullified marriage and the effects of legal separation, respectively, do not apply,
considering, too, that the Petition for the Declaration of the Nullity of Marriage filed
by the respondent invoking Article 36 of the Family Code has yet to be decided,
and, hence, it is premature to apply Articles 43 and 63 of the Family Code; that,
although adultery is a ground for legal separation, nonetheless, Article 63 finds no
application in the instant case since no petition to that effect was filed by the
petitioner against the respondent; that the spouses voluntarily separated their
property through their Compromise Agreement with court approval under Article
134 of the Family Code; that the Compromise Agreement, which embodies the
voluntary separation of property, is valid and binding in all respects because it had
been voluntarily entered into by the parties; that, furthermore, even if it were true
that the petitioner was not duly informed by his previous counsel about the legal
effects of the Compromise Agreement, this point is untenable since the mistake or
negligence of the lawyer binds his client, unless such mistake or negligence
amounts to gross negligence or deprivation of due process on the part of his client;
that these exceptions are not present in the instant case; that the Compromise
Agreement was plainly worded and written in simple language, which a person of
ordinary intelligence can discern the consequences thereof, hence, petitioner's
claim that his consent was vitiated is highly incredible; that the Compromise
Agreement was made during the existence of the marriage of the parties since it
was submitted during the pendency of the petition for declaration of nullity of
marriage; that the application of Article 2035 of the Civil Code is misplaced; that
the cooling-off period under Article 58 of the Family Code has no bearing on the
validity of the Compromise Agreement; that the Compromise Agreement is not
contrary to law, morals, good customs, public order, and public policy; that this
agreement may not be later disowned simply because of a change of mind; that the
presence of the Solicitor General or his deputy is not indispensable to the execution
and validity of the Compromise Agreement, since the purpose of his presence is to
curtail any collusion between the parties and to see to it that evidence is not
fabricated, and, with this in mind, nothing in the Compromise Agreement touches
on the very merits of the case of declaration of nullity of marriage for the court to
be wary of any possible collusion; and, finally, that the Compromise Agreement is
merely an agreement between the parties to separate their conjugal properties
partially without prejudice to the outcome of the pending case of declaration of
nullity of marriage.

Hence, herein Petition, purely on questions of law, raising the following issues:
I.

WHETHER OF NOT A SPOUSE CONVICTED OF EITHER CONCUBINAGE OR

ADULTERY, CAN STILL SHARE IN THE CONJUGAL PARTNERSHIP;

II

WHETHER OR NOT A COMPROMISE AGREEMENT ENTERED INTO BY SPOUSES, ONE

OF WHOM WAS CONVICTED OF ADULTERY, GIVING THE CONVICTED SPOUSE A
SHARE IN THE CONJUGAL PROPERTY, VALID AND LEGAL;

III

WHETHER OR NOT A JUDGMENT FOR ANNULMENT AND LEGAL SEPARATION IS A

PRE-REQUISITE BEFORE A SPOUSE CONVICTED OF EITHER CONCUBINAGE OR
ADULTERY, BE DISQUALIFIED AND PROHIBITED FROM SHARING IN THE CONJUGAL
PROPERTY;

IV

WHETHER OR NOT THE DISQUALIFICATION OF A CONVICTED SPOUSE OF

ADULTERY FROM SHARING IN A CONJUGAL PROPERTY, CONSTITUTES CIVIL
INTERDICTION.[5]
The petitioner argues that the Compromise Agreement should not have been given
judicial imprimatur since it is against law and public policy; that the proceedings
where it was approved is null and void, there being no appearance and participation
of the Solicitor General or the Provincial Prosecutor; that it was timely repudiated;
and that the respondent, having been convicted of adultery, is therefore disqualified
from sharing in the conjugal property.

The Petition must fail.

The essential question is whether the partial voluntary separation of property made
by the spouses pending the petition for declaration of nullity of marriage is valid.
First. The petitioner contends that the Compromise Agreement is void because it
circumvents the law that prohibits the guilty spouse, who was convicted of either
adultery or concubinage, from sharing in the conjugal property. Since the
respondent was convicted of adultery, the petitioner argues that her share should
be forfeited in favor of the common child under Articles 43(2)[6] and 63[7] of the
Family Code.

To the petitioner, it is the clear intention of the law to disqualify the spouse
convicted of adultery from sharing in the conjugal property; and because the
Compromise Agreement is void, it never became final and executory.

Moreover, the petitioner cites Article 2035[8] of the Civil Code and argues that since
adultery is a ground for legal separation, the Compromise Agreement is therefore
void.

These arguments are specious. The foregoing provisions of the law are inapplicable
to the instant case.

Article 43 of the Family Code refers to Article 42, to wit:

Article 42. The subsequent marriage referred to in the preceding Article[9] shall be
automatically terminated by the recording of the affidavit of reappearance of the
absent spouse, unless there is a judgment annulling the previous marriage or
declaring it void ab initio.

A sworn statement of the fact and circumstances of reappearance shall be recorded

in the civil registry of the residence of the parties to the subsequent marriage at the
instance of any interested person, with due notice to the spouses of the subsequent
marriage and without prejudice to the fact of reappearance being judicially
determined in case such fact is disputed.
where a subsequent marriage is terminated because of the reappearance of an
absent spouse; while Article 63 applies to the effects of a decree of legal
separation. The present case involves a proceeding where the nullity of the
marriage is sought to be declared under the ground of psychological capacity.

Article 2035 of the Civil Code is also clearly inapplicable. The Compromise
Agreement partially divided the properties of the conjugal partnership of gains
between the parties and does not deal with the validity of a marriage or legal
separation. It is not among those that are expressly prohibited by Article 2035.

Moreover, the contention that the Compromise Agreement is tantamount to a

circumvention of the law prohibiting the guilty spouse from sharing in the conjugal
properties is misplaced. Existing law and jurisprudence do not impose such
disqualification.

Under Article 143 of the Family Code, separation of property may be effected
voluntarily or for sufficient cause, subject to judicial approval. The questioned
Compromise Agreement which was judicially approved is exactly such a separation
of property allowed under the law. This conclusion holds true even if the
proceedings for the declaration of nullity of marriage was still pending. However,
the Court must stress that this voluntary separation of property is subject
to the rights of all creditors of the conjugal partnership of gains and other
persons with pecuniary interest pursuant to Article 136 of the Family Code.

Second. Petitioner's claim that since the proceedings before the RTC were void in
the absence of the participation of the provincial prosecutor or solicitor, the
voluntary separation made during the pendency of the case is also void. The
proceedings pertaining to the Compromise Agreement involved the conjugal
properties of the spouses. The settlement had no relation to the questions
surrounding the validity of their marriage. Nor did the settlement amount to a
collusion between the parties.

Article 48 of the Family Code states:

Art. 48. In all cases of annulment or declaration of absolute nullity of marriage, the
Court shall order the prosecuting attorney or fiscal assigned to it to appear on
behalf of the State to take steps to prevent collusion between the parties and
to take care that the evidence is not fabricated or suppressed. (Emphasis
supplied)
Section 3(e) of Rule 9 of the 1997 Rules of Court provides:
SEC. 3. Default; declaration of.- x x x x

xxxx

(e) Where no defaults allowed.– If the defending party in action for annulment or

declaration of nullity of marriage or for legal separation fails to answer, the court
shall order the prosecuting attorney to investigate whether or not a
collusion between the parties exists if there is no collusion, to intervene
for the State in order to see to it that the evidence submitted is not
fabricated. (Emphasis supplied
Truly, the purpose of the active participation of the Public Prosecutor or the Solicitor
General is to ensure that the interest of the State is represented and protected in
proceedings for annulment and declaration of nullity of marriages by preventing
collusion between the parties, or the fabrication or suppression of evidence.
[10]
 While the appearances of the Solicitor General and/or the Public Prosecutor are
mandatory, the failure of the RTC to require their appearance does not per
se nullify the Compromise Agreement. This Court fully concurs with the findings of
the CA:
x x x. It bears emphasizing that the intendment of the law in requiring the presence
of the Solicitor General and/or State prosecutor in all proceedings of legal
separation and annulment or declaration of nullity of marriage is to curtail or
prevent any possibility of collusion between the parties and to see to it that their
evidence respecting the case is not fabricated. In the instant case, there is no
exigency for the presence of the Solicitor General and/or the State prosecutor
because as already stated, nothing in the subject compromise agreement touched
into the very merits of the case of declaration of nullity of marriage for the court to
be wary of any possible collusion between the parties. At the risk of being
repetiti[ve], the compromise agreement pertains merely to an agreement between
the petitioner and the private respondent to separate their conjugal properties
partially without prejudice to the outcome of the pending case of declaration of
nullity of marriage.[11]
Third. The conviction of adultery does not carry the accessory of civil interdiction.
Article 34 of the Revised Penal Code provides for the consequences of civil
interdiction:
Art. 34. Civil Interdiction.  – Civil interdiction shall deprive the offender during the
time of his sentence of the rights of parental authority, or guardianship, either as to
the person or property of any ward, of marital authority, of the right to manage his
property and of the right to dispose of such property by any act or any
conveyance inter vivos.
Under Article 333 of the same Code, the penalty for adultery is prision
correccional in its medium and maximum periods. Article 333 should be read with
Article 43 of the same Code. The latter provides:
Art. 43. Prision correccional –  Its accessory penalties. – The penalty of prision
correccional shall carry with it that of suspension from public office, from the right
to follow a profession or calling, and that of perpetual special disqualification from
the right of suffrage, if the duration of said imprisonment shall exceed eighteen
months. The offender shall suffer the disqualification provided in this article
although pardoned as to the principal penalty, unless the same shall have been
expressly remitted in the pardon.
It is clear, therefore, and as correctly held by the CA, that the crime of adultery
does not carry the accessory penalty of civil interdiction which deprives the person
of the rights to manage her property and to dispose of such property inter vivos.

Fourth. Neither could it be said that the petitioner was not intelligently and
judiciously informed of the consequential effects of the compromise agreement, and
that, on this basis, he may repudiate the Compromise Agreement. The argument of
the petitioner that he was not duly informed by his previous counsel about the legal
effects of the voluntary settlement is not convincing. Mistake or vitiation of consent,
as now claimed by the petitioner as his basis for repudiating the settlement, could
hardly be said to be evident. In Salonga v. Court of Appeals,[12] this Court held:
[I]t is well-settled that the negligence of counsel binds the client. This is based on
the rule that any act performed by a lawyer within the scope of his general or
implied authority is regarded as an act of his client. Consequently, the mistake or
negligence of petitioners' counsel may result in the rendition of an unfavorable
judgment against them.

Exceptions to the foregoing have been recognized by the Court in cases where
reckless or gross negligence of counsel deprives the client of due process of law, or
when its application "results in the outright deprivation of one's property through a
technicality." x x x x[13]
None of these exceptions has been sufficiently shown in the present case.

WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals

is AFFIRMED with MODIFICATION that the subject Compromise Agreement
is VALID without prejudice to the rights of all creditors and other persons with
pecuniary interest in the properties of the conjugal partnership of gains.
SO ORDERED.

Ynares-Santiago, (Chairperson), Chico-Nazario, and Nachura, JJ., concur.

SECOND DIVISION
[ G.R. No. 188289, August 20, 2014 ]
DAVID A. NOVERAS, PETITIONER, VS. LETICIA T. NOVERAS,
RESPONDENT.

DECISION

PEREZ, J.: 

Before the Court is a petition for review assailing the 9 May 2008 Decision[1] of the
Court of Appeals in CA-G.R. CV No. 88686, which affirmed in part the 8 December
2006 Decision[2] of the Regional Trial Court (RTC) of Baler, Aurora, Branch 96.

The factual antecedents are as follow:

David A. Noveras (David) and Leticia T. Noveras (Leticia) were married on 3

December 1988 in Quezon City, Philippines. They resided in California, United
States of America (USA) where they eventually acquired American citizenship. They
then begot two children, namely: Jerome T. Noveras, who was born on 4 November
1990 and Jena T. Noveras, born on 2 May 1993. David was engaged in courier
service business while Leticia worked as a nurse in San Francisco, California.

During the marriage, they acquired the following properties in the Philippines and in
the USA:

PHILIPPINES
PROPERTY FAIR MARKET VALUE
House and Lot with an area of 150 sq. m. P1,693,125.00
located at 1085 Norma Street, Sampaloc, Manila
(Sampaloc property)
Agricultural land with an area of 20,742 sq. m. P400,000.00
located at Laboy, Dipaculao, Aurora
A parcel of land with an area of 2.5 hectares P490,000.00
located at Maria Aurora, Aurora
A parcel of land with an area of 175 sq.m. P175,000.00[3]
located at Sabang Baler, Aurora
3-has. coconut plantation in San Joaquin Maria P750,000.00
Aurora, Aurora
USA
PROPERTY FAIR MARKET VALUE
House and Lot at 1155 Hanover Street, Daly $550,000.00 (unpaid debt of
City, California $285,000.00)
Furniture and furnishings $3,000
Jewelries (ring and watch) $9,000
2000 Nissan Frontier 4x4 pickup truck $13,770.00
Bank of America Checking Account $8,000
Bank of America Cash Deposit $10,000.00
Life Insurance (Cash Value) $100,000.00
Retirement, pension, profit-sharing, annuities $56,228.00[4]

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

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

Upon learning that David had an extra-marital affair, Leticia filed a petition for
divorce with the Superior Court of California, County of San Mateo, USA. The
California court granted the divorce on 24 June 2005 and judgment was duly
entered on 29 June 2005.[6] The California court granted to Leticia the custody of
her two children, as well as all the couple’s properties in the USA.[7]

On 8 August 2005, Leticia filed a petition for Judicial Separation of Conjugal

Property before the RTC of Baler, Aurora. She relied on the 3 December 2003 Joint
Affidavit and David’s failure to comply with his obligation under the same. She
prayed for: 1) the power to administer all conjugal properties in the Philippines; 2)
David and his partner to cease and desist from selling the subject conjugal
properties; 3) the declaration that all conjugal properties be forfeited in favor of her
children; 4) David to remit half of the purchase price as share of Leticia from the
sale of the Sampaloc property; and 5) the payment of P50,000.00 and P100,000.00
litigation expenses.[8]

In his Answer, David stated that a judgment for the dissolution of their marriage
was entered on 29 June 2005 by the Superior Court of California, County of San
Mateo. He demanded that the conjugal partnership properties, which also include
the USA properties, be liquidated and that all expenses of liquidation, including
attorney’s fees of both parties be charged against the conjugal partnership.[9]

The RTC of Baler, Aurora simplified the issues as follow:

1. Whether or not respondent David A. Noveras committed acts of

abandonment and marital infidelity which can result into the forfeiture of the
parties’ properties in favor of the petitioner and their two (2) children.
2. Whether or not the Court has jurisdiction over the properties in California,
U.S.A. and the same can be included in the judicial separation prayed for.
3. Whether or not the “Joint Affidavit” x x x executed by petitioner Leticia T.
Noveras and respondent David A. Noveras will amount to a waiver or
forfeiture of the latter’s property rights over their conjugal properties.
4. Whether or not Leticia T. Noveras is entitled to reimbursement of one-half of
the P2.2 [M]illion sales proceeds of their property in Sampaloc, Manila and
one-half of the P1.5 [M]illion used to redeem the property of Atty. Isaias
Noveras, including interests and charges.
5. How the absolute community properties should be distributed.
6. Whether or not the attorney’s fees and litigation expenses of the parties were
chargeable against their conjugal properties.

Corollary to the above is the issue of:

Whether or not the two common children of the parties are entitled to support and
presumptive legitimes.[10]

On 8 December 2006, the RTC rendered judgment as follows:

1. The absolute community of property of the parties is hereby declared

DISSOLVED;
2. The net assets of the absolute community of property of the parties in the
Philippines are hereby ordered to be awarded to respondent David A.
Noveras only, with the properties in the United States of America remaining
in the sole ownership of petitioner Leticia Noveras a.k.a. Leticia Tacbiana
pursuant to the divorce decree issued by the Superior Court of California,
County of San Mateo, United States of America, dissolving the marriage of
the parties as of June 24, 2005. The titles presently covering said properties
 shall be cancelled and new titles be issued in the name of the party to whom
said properties are awarded;
3. One-half of the properties awarded to respondent David A. Noveras in the
preceding paragraph are hereby given to Jerome and Jena, his two minor
children with petitioner Leticia Noveras a.k.a. Leticia Tacbiana as their
presumptive legitimes and said legitimes must be annotated on the titles
covering the said properties. Their share in the income from these properties
shall be remitted to them annually by the respondent within the first half of
January of each year, starting January 2008;
4. One-half of the properties in the United States of America awarded to
petitioner Leticia Noveras a.k.a. Leticia Tacbiana in paragraph 2 are hereby
given to Jerome and Jena, her two minor children with respondent David A.
Noveras as their presumptive legitimes and said legitimes must be annotated
on the titles/documents covering the said properties. Their share in the
income from these properties, if any, shall be remitted to them annually by
the petitioner within the first half of January of each year, starting January
2008;
5. For the support of their two (2) minor children, Jerome and Jena, respondent
David A. Noveras shall give them US$100.00 as monthly allowance in
addition to their income from their presumptive legitimes, while petitioner
Leticia Tacbiana shall take care of their food, clothing, education and other
needs while they are in her custody in the USA. The monthly allowance due
from the respondent shall be increased in the future as the needs of the
children require and his financial capacity can afford;
6. Of the unpaid amount of P410,000.00 on the purchase price of the Sampaloc
property, the Paringit Spouses are hereby ordered to pay P5,000.00 to
respondent David A. Noveras and P405,000.00 to the two children. The share
of the respondent may be paid to him directly but the share of the two
children shall be deposited with a local bank in Baler, Aurora, in a joint
account to be taken out in their names, withdrawal from which shall only be
made by them or by their representative duly authorized with a Special
Power of Attorney. Such payment/deposit shall be made within the period of
thirty (30) days after receipt of a copy of this Decision, with the passbook of
the joint account to be submitted to the custody of the Clerk of Court of this
Court within the same period. Said passbook can be withdrawn from the
Clerk of Court only by the children or their attorney-in-fact; and
7. The litigation expenses and attorney’s fees incurred by the parties shall be
shouldered by them individually.[11]

The trial court recognized that since the parties are US citizens, the laws that cover
their legal and personal status are those of the USA. With respect to their marriage,
the parties are divorced by virtue of the decree of dissolution of their marriage
issued by the Superior Court of California, County of San Mateo on 24 June 2005.
Under their law, the parties’ marriage had already been dissolved. Thus, the trial
court considered the petition filed by Leticia as one for liquidation of the absolute
community of property regime with the determination of the legitimes, support and
custody of the children, instead of an action for judicial separation of conjugal
property.

With respect to their property relations, the trial court first classified their property
regime as absolute community of property because they did not execute any
marriage settlement before the solemnization of their marriage pursuant to Article
75 of the Family Code. Then, the trial court ruled that in accordance with the
doctrine of processual presumption, Philippine law should apply because the court
cannot take judicial notice of the US law since the parties did not submit any proof
of their national law. The trial court held that as the instant petition does not fall
under the provisions of the law for the grant of judicial separation of properties, the
absolute community properties cannot be forfeited in favor of Leticia and her
children. Moreover, the trial court observed that Leticia failed to prove
abandonment and infidelity with preponderant evidence.

The trial court however ruled that Leticia is not entitled to the reimbursements she
is praying for considering that she already acquired all of the properties in the USA.
Relying still on the principle of equity, the Court also adjudicated the Philippine
properties to David, subject to the payment of the children’s presumptive legitimes.
The trial court held that under Article 89 of the Family Code, the waiver or
renunciation made by David of his property rights in the Joint Affidavit is void.

On appeal, the Court of Appeals modified the trial court’s Decision by directing the
equal division of the Philippine properties between the spouses. Moreover with
respect to the common children’s presumptive legitime, the appellate court ordered
both spouses to each pay their children the amount of P520,000.00, thus:

WHEREFORE, the instant appeal is PARTLY GRANTED. Numbers 2, 4 and 6 of the

assailed Decision dated December 8, 2006 of Branch 96, RTC of Baler, Aurora
Province, in Civil Case No. 828 are hereby MODIFIED to read as follows:

2. The net assets of the absolute community of property of the parties in the
Philippines are hereby divided equally between petitioner Leticia Noveras a.k.a.
Leticia Tacbiana (sic) and respondent David A. Noveras;

xxx

4. One-half of the properties awarded to petitioner Leticia Tacbiana (sic) in

paragraph 2 shall pertain to her minor children, Jerome and Jena, as their
presumptive legitimes which shall be annotated on the titles/documents covering
the said properties. Their share in the income therefrom, if any, shall be remitted to
them by petitioner annually within the first half of January, starting 2008;

xxx

6. Respondent David A. Noveras and petitioner Leticia Tacbiana (sic) are each
ordered to pay the amount of P520,000.00 to their two children, Jerome and Jena,
as their presumptive legitimes from the sale of the Sampaloc property inclusive of
the receivables therefrom, which shall be deposited to a local bank of Baler, Aurora,
under a joint account in the latter’s names. The payment/deposit shall be made
within a period of thirty (30) days from receipt of a copy of this Decision and the
corresponding passbook entrusted to the custody of the Clerk of Court a quo within
the same period, withdrawable only by the children or their attorney-in-fact.

A number 8 is hereby added, which shall read as follows:

8. Respondent David A. Noveras is hereby ordered to pay petitioner Leticia

Tacbiana (sic) the amount of P1,040,000.00 representing her share in the proceeds
from the sale of the Sampaloc property.

The last paragraph shall read as follows:

Send a copy of this Decision to the local civil registry of Baler, Aurora; the local civil
registry of Quezon City; the Civil Registrar-General, National Statistics Office, Vibal
Building, Times Street corner EDSA, Quezon City; the Office of the Registry of
Deeds for the Province of Aurora; and to the children, Jerome Noveras and Jena
Noveras.

The rest of the Decision is AFFIRMED.[12]

In the present petition, David insists that the Court of Appeals should have
recognized the California Judgment which awarded the Philippine properties to him
because said judgment was part of the pleading presented and offered in evidence
before the trial court. David argues that allowing Leticia to share in the Philippine
properties is tantamount to unjust enrichment in favor of Leticia considering that
the latter was already granted all US properties by the California court.

In summary and review, the basic facts are: David and Leticia are US citizens who
own properties in the USA and in the Philippines. Leticia obtained a decree of
divorce from the Superior Court of California in June 2005 wherein the court
awarded all the properties in the USA to Leticia. With respect to their properties in
the Philippines, Leticia filed a petition for judicial separation of conjugal properties.

At the outset, the trial court erred in recognizing the divorce decree which severed
the bond of marriage between the parties. In Corpuz v. Sto. Tomas,[13] we stated
that:

The starting point in any recognition of a foreign divorce judgment is the

acknowledgment that our courts do not take judicial notice of foreign judgments
and laws. Justice Herrera explained that, as a rule, “no sovereign is bound to give
effect within its dominion to a judgment rendered by a tribunal of another country.”
This means that the foreign judgment and its authenticity must be proven as facts
under our rules on evidence, together with the alien’s applicable national law to
show the effect of the judgment on the alien himself or herself. The recognition
may be made in an action instituted specifically for the purpose or in another action
where a party invokes the foreign decree as an integral aspect of his claim or
defense.[14]
The requirements of presenting the foreign divorce decree and the national law of
the foreigner must comply with our Rules of Evidence. Specifically, for Philippine
courts to recognize a foreign judgment relating to the status of a marriage, a copy
of the foreign judgment may be admitted in evidence and proven as a fact under
Rule 132, Sections 24 and 25, in relation to Rule 39, Section 48(b) of the Rules of
Court.[15]

Under Section 24 of Rule 132, the record of public documents of a sovereign

authority or tribunal may be proved by: (1) an official publication thereof or (2) a
copy attested by the officer having the legal custody thereof. Such official
publication or copy must be accompanied, if the record is not kept in the
Philippines, with a certificate that the attesting officer has the legal custody thereof.
The certificate may be issued by any of the authorized Philippine embassy or
consular officials stationed in the foreign country in which the record is kept, and
authenticated by the seal of his office. The attestation must state, in substance,
that the copy is a correct copy of the original, or a specific part thereof, as the case
may be, and must be under the official seal of the attesting officer.

Section 25 of the same Rule states that whenever a copy of a document or record is
attested for the purpose of evidence, the attestation must state, in substance, that
the copy is a correct copy of the original, or a specific part thereof, as the case may
be. The attestation must be under the official seal of the attesting officer, if there
be any, or if he be the clerk of a court having a seal, under the seal of such court.

Based on the records, only the divorce decree was presented in evidence. The
required certificates to prove its authenticity, as well as the pertinent California law
on divorce were not presented.

It may be noted that in Bayot v. Court of Appeals,[16] we relaxed the requirement on

certification where we held that “[petitioner therein] was clearly an American citizen
when she secured the divorce and that divorce is recognized and allowed in any of
the States of the Union, the presentation of a copy of foreign divorce decree duly
authenticated by the foreign court issuing said decree is, as here, sufficient.” In
this case however, it appears that there is no seal from the office where the divorce
decree was obtained.

Even if we apply the doctrine of processual presumption[17] as the lower courts did
with respect to the property regime of the parties, the recognition of divorce is
entirely a different matter because, to begin with, divorce is not recognized
between Filipino citizens in the Philippines.

Absent a valid recognition of the divorce decree, it follows that the parties are still
legally married in the Philippines. The trial court thus erred in proceeding directly to
liquidation.

As a general rule, any modification in the marriage settlements must be made

before the celebration of marriage. An exception to this rule is allowed provided
that the modification is judicially approved and refers only to the instances provided
in Articles 66, 67, 128, 135 and 136 of the Family Code.[18]

Leticia anchored the filing of the instant petition for judicial separation of property
on paragraphs 4 and 6 of Article 135 of the Family Code, to wit:

Art. 135. Any of the following shall be considered sufficient cause for judicial
separation of property:

(1) That the spouse of the petitioner has been sentenced to a penalty which carries with it civil
interdiction;
(2) That the spouse of the petitioner has been judicially declared an absentee;
(3) That loss of parental authority of the spouse of petitioner has been decreed by the court;
(4) That the spouse of the petitioner has abandoned the latter or failed to comply with his or her
obligations to the family as provided for in Article 101;
(5) That the spouse granted the power of administration in the marriage settlements has abused
that power; and
(6) That at the time of the petition, the spouses have been separated in fact for at least one year
and reconciliation is highly improbable.

In the cases provided for in Numbers (1), (2), and (3), the presentation of the final
judgment against the guilty or absent spouse shall be enough basis for the grant of
the decree of judicial separation of property. (Emphasis supplied).

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

Moreover, abandonment, under Article 101 of the Family Code quoted above, must
be for a valid cause and the spouse is deemed to have abandoned the other when
he/she has left the conjugal dwelling without intention of returning. The intention of
not returning is prima facie presumed if the allegedly [sic] abandoning spouse failed
to give any information as to his or her whereabouts within the period of three
months from such abandonment.

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

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

Having established that Leticia and David had actually separated for at least one
year, the petition for judicial separation of absolute community of property should
be granted.

The grant of the judicial separation of the absolute community property

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

Art. 99. The absolute community terminates:

(1) Upon the death of either spouse;

(2) When there is a decree of legal separation;
(3) When the marriage is annulled or declared void; or
(4) In case of judicial separation of property during the marriage under
Articles 134 to 138. (Emphasis supplied).

Under Article 102 of the same Code, liquidation follows the dissolution of the
absolute community regime and the following procedure should apply:

Art. 102. Upon dissolution of the absolute community regime, the following
procedure shall apply:

(1) An inventory shall be prepared, listing separately all the properties of the absolute
community and the exclusive properties of each spouse.
(2) The debts and obligations of the absolute community shall be paid out of its assets. In case
of insufficiency of said assets, the spouses shall be solidarily liable for the unpaid balance
with their separate properties in accordance with the provisions of the second paragraph of
Article 94.
(3) Whatever remains of the exclusive properties of the spouses shall thereafter be delivered to
each of them.
(4) The net remainder of the properties of the absolute community shall constitute its net assets,
which shall be divided equally between husband and wife, unless a different proportion or
division was agreed upon in the marriage settlements, or unless there has been a voluntary
waiver of such share provided in this Code. For purposes of computing the net profits
subject to forfeiture in accordance with Articles 43, No. (2) and 63, No. (2), the said profits
shall be the increase in value between the market value of the community property at the
 time of the celebration of the marriage and the market value at the time of its dissolution.
(5) The presumptive legitimes of the common children shall be delivered upon partition, in
accordance with Article 51.
(6) Unless otherwise agreed upon by the parties, in the partition of the properties, the conjugal
dwelling and the lot on which it is situated shall be adjudicated to the spouse with whom the
majority of the common children choose to remain. Children below the age of seven years
are deemed to have chosen the mother, unless the court has decided otherwise. In case there
is no such majority, the court shall decide, taking into consideration the best interests of said
children.

At the risk of being repetitious, we will not remand the case to the trial court.
Instead, we shall adopt the modifications made by the Court of Appeals on the trial
court’s Decision with respect to liquidation.

We agree with the appellate court that the Philippine courts did not acquire
jurisdiction over the California properties of David and Leticia. Indeed, Article 16 of
the Civil Code clearly states that real property as well as personal property is
subject to the law of the country where it is situated. Thus, liquidation shall only be
limited to the Philippine properties.

We affirm the modification made by the Court of Appeals with respect to the share
of the spouses in the absolute community properties in the Philippines, as well as
the payment of their children’s presumptive legitimes, which the appellate court
explained in this wise:

Leticia and David shall likewise have an equal share in the proceeds of the
Sampaloc property. While both claimed to have contributed to the redemption of
the Noveras property, absent a clear showing where their contributions came from,
the same is presumed to have come from the community property. Thus, Leticia is
not entitled to reimbursement of half of the redemption money.

David’s allegation that he used part of the proceeds from the sale of the Sampaloc
property for the benefit of the absolute community cannot be given full credence.
Only the amount of P120,000.00 incurred in going to and from the U.S.A. may be
charged thereto. Election expenses in the amount of P300,000.00 when he ran as
municipal councilor cannot be allowed in the absence of receipts or at least the
Statement of Contributions and Expenditures required under Section 14 of Republic
Act No. 7166 duly received by the Commission on Elections. Likewise, expenses
incurred to settle the criminal case of his personal driver is not deductible as the
same had not benefited the family. In sum, Leticia and David shall share equally in
the proceeds of the sale net of the amount of P120,000.00 or in the respective
amounts of P1,040,000.00.

xxxx

Under the first paragraph of Article 888 of the Civil Code, “(t)he legitime of
legitimate children and descendants consists of one-half of the hereditary estate of
the father and of the mother.” The children are therefore entitled to half of the
share of each spouse in the net assets of the absolute community, which shall be
annotated on the titles/documents covering the same, as well as to their respective
shares in the net proceeds from the sale of the Sampaloc property including the
receivables from Sps. Paringit in the amount of P410,000.00. Consequently, David
and Leticia should each pay them the amount of P520,000.00 as their presumptive
legitimes therefrom.[21]

WHEREFORE, the petition is DENIED. The assailed Decision of the Court of

Appeals in CA G.R. CV No. 88686 is AFFIRMED.

SO ORDERED.

Sereno,*  C.J., Carpio, J., (Chairperson), Velasco, Jr.,** Del Castillo, and Perez, JJ.,

concur.

FIRST DIVISION
[ G.R. No. 122749, July 31, 1996 ]
ANTONIO A. S. VALDES, PETITIONER, VS. REGIONAL TRIAL
COURT, BRANCH 102, QUEZON CITY, AND CONSUELO M.
GOMEZ-VALDES, RESPONDENTS. 

DECISION

VITUG, J.: 

The petition for review bewails, purely on a question of law, an alleged error
committed by the Regional Trial Court in Civil Case No. Q-92-12539. Petitioner
avers that the court a quo has failed to apply the correct law that should govern the
disposition of a family dwelling in a situation where a marriage is declared void ab
initio because of psychological incapacity on the part of either or both of the parties
to the contract.

The pertinent facts giving rise to this incident are, by and large, not in dispute.

Antonio Valdes and Consuelo Gomez were married on 05 January 1971. Begotten
during the marriage were five children. In a petition, dated 22 June 1992, Valdes
sought the declaration of nullity of the marriage pursuant to Article 36 of the Family
Code (docketed Civil Case No. Q-92-12539, Regional Trial Court of Quezon City,
Branch 102). After hearing the parties following the joinder of issues, the trial
court,[1] in its decision of 29 July 1994, granted the petition; viz:

"WHEREFORE, judgment is hereby rendered as follows:

"(1) The marriage of petitioner Antonio Valdes and respondent Consuelo Gomez-
Valdes is hereby declared null and void under Article 36 of the Family Code on the
ground of their mutual psychological incapacity to comply with their essential
marital obligations;

"(2) The three older children, Carlos Enrique III, Antonio Quintin and Angela
Rosario shall choose which parent they would want to stay with.

"Stella Eloisa and Joaquin Pedro shall be placed in the custody of their mother,
herein respondent Consuelo Gomez-Valdes.

"The petitioner and respondent shall have visitation rights over the children who are
in the custody of the other.

"(3) The petitioner and respondent are directed to start proceedings on the

liquidation of their common properties as defined by Article 147 of the Family Code,
and to comply with the provisions of Articles 50, 51 and 52 of the same code,
within thirty (30) days from notice of this decision.

"Let a copy of this decision be furnished the Local Civil Registrar of Mandaluyong,
Metro Manila, for proper recording in the registry of marriages."[2] (Italics ours)

Consuelo Gomez sought a clarification of that portion of the decision directing

compliance with Articles 50, 51 and 52 of the Family Code. She asserted that the
Family Code contained no provisions on the procedure for the liquidation of
common property in "unions without marriage." Parenthetically, during the hearing
on the motion, the children filed a joint affidavit expressing their desire to remain
with their father, Antonio Valdes, herein petitioner.

In an Order, dated 05 May 1995, the trial court made the following clarification:

"Consequently, considering that Article 147 of the Family Code explicitly provides
that the property acquired by both parties during their union, in the absence of
proof to the contrary, are presumed to have been obtained through the joint efforts
of the parties and will be owned by them in equal shares, plaintiff and defendant
will own their 'family home' and all their other properties for that matter in equal
shares.

"In the liquidation and partition of the properties owned in common by the plaintiff
and defendant, the provisions on co-ownership found in the Civil Code shall
apply."[3] (Italics supplied)

In addressing specifically the issue regarding the disposition of the family dwelling,
the trial court said:

"Considering that this Court has already declared the marriage between petitioner
and respondent as null and void ab initio,pursuant to Art. 147, the property regime
of petitioner and respondent shall be governed by the rules on co-ownership.

"The provisions of Articles 102 and 129 of the Family Code finds no application
since Article 102 refers to the procedure for the liquidation of the conjugal
partnership property and Article 129 refers to the procedure for the liquidation of
the absolute community of property."[4]

Petitioner moved for a reconsideration of the order. The motion was denied on 30
October 1995.

In his recourse to this Court, petitioner submits that Articles 50, 51 and 52 of the
Family Code should be held controlling; he argues that:

"I

"Article 147 of the Family Code does not apply to cases where the parties are
psychological incapacitated.

"II

"Articles 50, 51 and 52 in relation to Articles 102 and 129 of the Family Code
govern the disposition of the family dwelling in cases where a marriage is declared
void ab initio, including a marriage declared void by reason of the psychological
incapacity of the spouses.

"III

"Assuming arguendo that Article 147 applies to marriages declared void ab initio on
the ground of the psychological incapacity of a spouse, the same may be read
consistently with Article 129.

"IV

"It is necessary to determine the parent with whom majority of the children wish to
stay."[5]

The trial court correctly applied the law. In a void marriage, regardless of the cause
thereof, the property relations of the parties during the period of cohabitation is
governed by the provisions of Article 147 or Article 148, such as the case may be,
of the Family Code. Article 147 is a remake of Article 144 of the Civil Code as
interpreted and so applied in previous cases;[6] it provides:

"ART. 147. When a man and a woman who are capacitated to marry each other,
live exclusively with each other as husband and wife without the benefit of marriage
or under a void marriage, their wages and salaries shall be owned by them in equal
shares and the property acquired by both of them through their work or industry
shall be governed by the rules on co-ownership.

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

"Neither party can encumber or dispose by acts inter vivos of his or her share in the
property acquired during cohabitation and owned in common, without the consent
of the other, until after the termination of their cohabitation.

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

This peculiar kind of co-ownership applies when a man and a woman, suffering no
legal impediment to marry each other, so exclusively live together as husband and
wife under a void marriage or without the benefit of marriage. The term
"capacitated" in the provision (in the first paragraph of the law) refers to the legal
capacity of a party to contract marriage, i.e., any "male or female of the age of
eighteen years or upwards not under any of the impediments mentioned in Articles
37 and 38"[7] of the Code.

Under this property regime, property acquired by both spouses through

their work and industry shall be governed by the rules on equal co-ownership. Any
property acquired during the union is prima facie presumed to have been obtained
through their joint efforts. A party who did not participate in the acquisition of the
property shall still be considered as having contributed thereto jointly if said party's
"efforts consisted in the care and maintenance of the family household."[8] Unlike
the conjugal partnership of gains, the fruits of the couple's separate property are
not included in the co-ownership.

Article 147 of the Family Code, in substance and to the above extent, has clarified
Article 144 of the Civil Code; in addition, the law now expressly provides that -

(a) Neither party can dispose or encumber by act inter vivos his or her share in co-
ownership property, without the consent of the other, during the period of
cohabitation; and

(b) In the case of a void marriage, any party in bad faith shall forfeit his or her
share in the co-ownership in favor of their common children; in default thereof or
waiver by any or all of the common children, each vacant share shall belong to the
respective surviving descendants, or still in default thereof, to the innocent party.
The forfeiture shall take place upon the termination of the cohabitation[9] or
declaration of nullity of the marriage.[10]

When the common-law spouses suffer from a legal impediment to marry or when
they do not live exclusively with each other (as husband and wife ),only the
property acquired by both of them through their actual joint contribution of money,
property or industry shall be owned in common and in proportion to their respective
contributions. Such contributions and corresponding shares, however, are prima
faciepresumed to be equal. The share of any party who is married to another shall
accrue to the absolute community or conjugal partnership, as the case may be, if
so existing under a valid marriage. If the party who has acted in bad faith is not
validly married to another, his or her share shall be forfeited in the manner already
heretofore expressed.[11]

In deciding to take further cognizance of the issue on the settlement of the parties'
common property, the trial court acted neither imprudently nor precipitately; a
court which has jurisdiction to declare the marriage a nullity must be deemed
likewise clothed with authority to resolve incidental and consequential matters. Nor
did it commit a reversible error in ruling that petitioner and private respondent own
the "family home" and all their common property in equal shares, as well as in
concluding that, in the liquidation and partition of the property owned in common
by them, the provisions on co-ownership under the Civil Code, not Articles 50, 51
and 52, in relation to Articles 102 and 129,[12] of the Family Code, should aptly
prevail. The rules set up to govern the liquidation of either the absolute community
or the conjugal partnership of gains, the property regimes recognized for valid and
voidable marriages (in the latter case until the contract is annulled ),are irrelevant
to the liquidation of the co-ownership that exists between common-law spouses.
The first paragraph of Article 50 of the Family Code, applying paragraphs (2 ),(3 ),
(4) and (5) of Article 43,[13] relates only, by its explicit terms, to voidable marriages
and, exceptionally, to void marriages under Article 40[14] of the Code, i.e., the
declaration of nullity of a subsequent marriage contracted by a spouse of a prior
void marriage before the latter is judicially declared void. The latter is a special rule
that somehow recognizes the philosophy and an old doctrine that void marriages
are inexistent from the very beginning and no judicial decree is necessary to
establish their nullity. In now requiring for purposes of remarriage, the declaration
of nullity by final judgment of the previously contracted void marriage, the present
law aims to do away with any continuing uncertainty on the status of the second
marriage. It is not then illogical for the provisions of Article 43, in relation to
Articles 41[15] and 42,[16] of the Family Code, on the effects of the termination of a
subsequent marriage contracted during the subsistence of a previous marriage to
be made applicable pro hac vice. In all other cases, it is not to be assumed that the
law has also meant to have coincident property relations, on the one hand, between
spouses in valid and voidable marriages (before annulment) and, on the other,
between common-law spouses or spouses of void marriages, leaving to ordain, in
the latter case, the ordinary rules on co-ownership subject to the provision of
Article 147 and Article 148 of the Family Code. It must be stressed, nevertheless,
even as it may merely state the obvious, that the provisions of the Family Code on
the "family home," i.e., the provisions found in Title V, Chapter 2, of the Family
Code, remain in force and effect regardless of the property regime of the spouses.

WHEREFORE, the questioned orders, dated 05 May 1995 and 30 October 1995, of

the trial court are AFFIRMED. No costs.

SO ORDERED.

Padilla, Kapunan, and Hermosisima, Jr., JJ., concur.

Bellosillo, J., on leave.
 FIRST DIVISION
[ G.R. NO. 127358, March 31, 2005 ]
NOEL BUENAVENTURA, PETITIONER, VS. COURT OF APPEALS
AND ISABEL LUCIA SINGH BUENAVENTURA, RESPONDENTS. 

G.R. NO. 127449 

NOEL BUENAVENTURA, PETITIONER, VS. COURT OF APPEALS

AND ISABEL LUCIA SINGH BUENAVENTURA, RESPONDENTS;. 

DECISION

AZCUNA, J.: 

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

On July 31, 1995, the Regional Trial Court promulgated a Decision, the dispositive
portion of which reads:
WHEREFORE, judgment is hereby rendered as follows:

1) Declaring and decreeing the marriage entered into between plaintiff Noel A.
Buenaventura and defendant Isabel Lucia Singh Buenaventura on July 4, 1979, null
and void ab initio;

2) Ordering the plaintiff to pay defendant moral damages in the amount of 2.5
million pesos and exemplary damages of 1 million pesos with 6% interest from the
date of this decision plus attorney’s fees of P100,000.00;

3) Ordering the plaintiff to pay the defendant expenses of litigation of P50,000.00,

plus costs;

4) Ordering the liquidation of the assets of the conjugal partnership property[,]

particularly the plaintiff’s separation/retirement benefits received from the Far East
Bank [and] Trust Company[,] by ceding, giving and paying to her fifty percent
(50%) of the net amount of P3,675,335.79 or P1,837,667.89 together with 12%
interest per annum from the date of this decision and one-half (1/2) of his
outstanding shares of stock with Manila Memorial Park and Provident Group of
Companies;

5) Ordering him to give a regular support in favor of his son Javy Singh
Buenaventura in the amount of P15,000.00 monthly, subject to modification as the
necessity arises;

6) Awarding the care and custody of the minor Javy Singh Buenaventura to his
mother, the herein defendant; and

7) Hereby authorizing the defendant to revert back to the use of her maiden family
name Singh.

Let copies of this decision be furnished the appropriate civil registry and registries
of properties.

SO ORDERED.[2]
Petitioner appealed the above decision to the Court of Appeals. While the case was
pending in the appellate court, respondent filed a motion to increase the P15,000
monthly support pendente lite of their son Javy Singh Buenaventura. Petitioner filed
an opposition thereto, praying that it be denied or that such incident be set for oral
argument.[3]

On September 2, 1996, the Court of Appeals issued a Resolution increasing the

support pendente lite to P20,000.[4] Petitioner filed a motion for reconsideration
questioning the said Resolution.[5]

On October 8, 1996, the appellate court promulgated a Decision dismissing

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

On November 13, 1996, through another Resolution, the Court of Appeals denied
petitioner’s motion for reconsideration of the September 2, 1996 Resolution, which
increased the monthly support for the son.[7] Petitioner filed a Petition for Certiorari
to question these two Resolutions.

On July 9, 1997, the Petition for Review on Certiorari[8] and the Petition

for Certiorari[9] were ordered consolidated by this Court.[10]

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

1. WHEN IT AWARDED DEFENDANT-APPELLEE MORAL DAMAGES IN THE

AMOUNT OF P2.5 MILLION AND EXEMPLARY DAMAGES OF P1 MILLION, WITH
 6% INTEREST FROM THE DATE OF ITS DECISION, WITHOUT ANY LEGAL AND
MORAL BASIS;

2. WHEN IT AWARDED P100,000.00 ATTORNEY’S FEES AND P50,000.00

EXPENSES OF LITIGATION, PLUS COSTS, TO DEFENDANT-APPELLEE,
WITHOUT FACTUAL AND LEGAL BASIS;

3. WHEN IT ORDERED PLAINTIFF-APPELLANT NOEL TO PAY DEFENDANT-

APPELLEE ONE-HALF OR P1,837,667.89 OUT OF HIS RETIREMENT BENEFITS
RECEIVED FROM THE FAR EAST BANK AND TRUST CO., WITH 12% INTEREST
THEREON FROM THE DATE OF ITS DECISION, NOTWITHSTANDING THAT
SAID RETIREMENT BENEFITS ARE GRATUITOUS AND EXCLUSIVE PROPERTY
OF NOEL, AND ALSO TO DELIVER TO DEFENDANT-APPELLEE ONE-HALF OF
HIS SHARES OF STOCK WITH THE MANILA MEMORIAL PARK AND THE
PROVIDENT GROUP OF COMPANIES, ALTHOUGH SAID SHARES OF STOCK
WERE ACQUIRED BY NOEL BEFORE HIS MARRIAGE TO RESPONDENT ISABEL
AND ARE, THEREFORE, AGAIN HIS EXCLUSIVE PROPERTIES; AND

4. WHEN IT AWARDED EXCLUSIVE CARE AND CUSTODY OVER THE PARTIES’

MINOR CHILD TO DEFENDANT-APPELLEE WITHOUT ASKING THE CHILD
(WHO WAS ALREADY 13 YEARS OLD AT THAT TIME) HIS CHOICE AS TO
WHOM, BETWEEN HIS TWO PARENTS, HE WOULD LIKE TO HAVE CUSTODY
OVER HIS PERSON.[11]

In the Petition for Certiorari, petitioner advances the following contentions:

THE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION WHEN IT REFUSED TO
SET RESPONDENT’S MOTION FOR INCREASED SUPPORT FOR THE PARTIES’ SON
FOR HEARING.[12]

THERE WAS NO NEED FOR THE COURT OF APPEALS TO INCREASE JAVY’S MONTHLY
SUPPORT OF P15,000.00 BEING GIVEN BY PETITIONER EVEN AT PRESENT PRICES.
[13]

IN RESOLVING RESPONDENT’S MOTION FOR THE INCREASE OF JAVY’S SUPPORT,

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

LIKEWISE, THE COURT OF APPEALS SHOULD HAVE GIVEN PETITIONER AN

OPPORTUNITY TO PROVE HIS PRESENT INCOME TO SHOW THAT HE CANNOT
AFFORD TO INCREASE JAVY’S SUPPORT.[15]

With regard to the first issue in the main case, the Court of Appeals articulated:

On Assignment of Error C, the trial court, after findings of fact ascertained from the
testimonies not only of the parties particularly the defendant-appellee but likewise,
those of the two psychologists, awarded damages on the basis of Articles 21, 2217
and 2229 of the Civil Code of the Philippines.

Thus, the lower court found that plaintiff-appellant deceived the defendant-appellee
into marrying him by professing true love instead of revealing to her that he was
under heavy parental pressure to marry and that because of pride he married
defendant-appellee; that he was not ready to enter into marriage as in fact his
career was and always would be his first priority; that he was unable to relate not
only to defendant-appellee as a husband but also to his son, Javy, as a father; that
he had no inclination to make the marriage work such that in times of trouble, he
chose the easiest way out, that of leaving defendant–appellee and their son; that
he had no desire to keep defendant-appellee and their son as proved by his
reluctance and later, refusal to reconcile after their separation; that the
aforementioned caused defendant-appellee to suffer mental anguish, anxiety,
besmirched reputation, sleepless nights not only in those years the parties were
together but also after and throughout their separation.

Plaintiff-appellant assails the trial court’s decision on the ground that unlike those
arising from a breach in ordinary contracts, damages arising as a consequence of
marriage may not be awarded. While it is correct that there is, as yet, no decided
case by the Supreme Court where damages by reason of the performance or non-
performance of marital obligations were awarded, it does not follow that no such
award for damages may be made.

Defendant-appellee, in her amended answer, specifically prayed for moral and

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

The award by the trial court of moral damages is based on Articles 2217 and 21 of
the Civil Code, which read as follows:

ART. 2217. Moral damages include physical suffering, mental anguish, fright,
serious anxiety, besmirched reputation, wounded feelings, moral shock, social
humiliation, and similar injury. Though incapable of pecuniary computation, moral
damages may be recovered if they are the proximate result of the defendant’s
wrongful act or omission.

ART. 21. Any person who wilfully causes loss or injury to another in a manner that
is contrary to morals, good customs or public policy shall compensate the latter for
the damage.
The trial court referred to Article 21 because Article 2219[17] of the Civil Code
enumerates the cases in which moral damages may be recovered and it mentions
Article 21 as one of the instances. It must be noted that Article 21 states that the
individual must willfully cause loss or injury to another. There is a need that the act
is willful and hence done in complete freedom. In granting moral damages,
therefore, the trial court and the Court of Appeals could not but have assumed that
the acts on which the moral damages were based were done willfully and freely,
otherwise the grant of moral damages would have no leg to stand on.

On the other hand, the trial court declared the marriage of the parties null and void
based on Article 36 of the Family Code, due to psychological incapacity of the
petitioner, Noel Buenaventura. Article 36 of the Family Code states:
A marriage contracted by any party who, at the time of the celebration, was
psychologically incapacitated to comply with the essential marital obligations of
marriage, shall likewise be void even if such incapacity becomes manifest only after
its solemnization.

Psychological incapacity has been defined, thus:

. . . no less than a mental (not physical) incapacity that causes a party to be truly
incognitive of the basic marital covenants that concomitantly must be
assumed and discharged by the parties to the marriage which, as so
expressed by Article 68 of the Family Code, include their mutual obligations to live
together, observe love, respect and fidelity and render help and support. There is
hardly any doubt that the intendment of the law has been to confine the meaning of
"psychological incapacity" to the most serious cases of personality disorders clearly
demonstrative of an utter insensitivity or inability to give meaning and
significance to the marriage. . . .[18]
The Court of Appeals and the trial court considered the acts of the petitioner after
the marriage as proof of his psychological incapacity, and therefore a product of his
incapacity or inability to comply with the essential obligations of marriage.
Nevertheless, said courts considered these acts as willful and hence as grounds for
granting moral damages. It is contradictory to characterize acts as a product of
psychological incapacity, and hence beyond the control of the party because of an
innate inability, while at the same time considering the same set of acts as willful.
By declaring the petitioner as psychologically incapacitated, the possibility of
awarding moral damages on the same set of facts was negated. The award of moral
damages should be predicated, not on the mere act of entering into the marriage,
but on specific evidence that it was done deliberately and with malice by a party
who had knowledge of his or her disability and yet willfully concealed the same. No
such evidence appears to have been adduced in this case.

For the same reason, since psychological incapacity means that one is truly
incognitive of the basic marital covenants that one must assume and discharge as a
consequence of marriage, it removes the basis for the contention that the petitioner
purposely deceived the private respondent. If the private respondent was deceived,
it was not due to a willful act on the part of the petitioner. Therefore, the award of
moral damages was without basis in law and in fact.

Since the grant of moral damages was not proper, it follows that the grant of
exemplary damages cannot stand since the Civil Code provides that exemplary
damages are imposed in addition to moral, temperate, liquidated or compensatory
damages.[19]
With respect to the grant of attorney’s fees and expenses of litigation the trial court
explained, thus:
Regarding Attorney’s fees, Art. 2208 of the Civil Code authorizes an award of
attorney’s fees and expenses of litigation, other than judicial costs, when as in this
case the plaintiff’s act or omission has compelled the defendant to litigate and to
incur expenses of litigation to protect her interest (par. 2), and where the Court
deems it just and equitable that attorney’s fees and expenses of litigation should be
recovered. (par. 11)[20]

The Court of Appeals reasoned as follows:

On Assignment of Error D, as the award of moral and exemplary damages is fully

justified, the award of attorney’s fees and costs of litigation by the trial court is
likewise fully justified.[21]
The acts or omissions of petitioner which led the lower court to deduce his
psychological incapacity, and his act in filing the complaint for the annulment of his
marriage cannot be considered as unduly compelling the private respondent to
litigate, since both are grounded on petitioner’s psychological incapacity, which as
explained above is a mental incapacity causing an utter inability to comply with the
obligations of marriage. Hence, neither can be a ground for attorney’s fees and
litigation expenses. Furthermore, since the award of moral and exemplary damages
is no longer justified, the award of attorney’s fees and expenses of litigation is left
without basis.

Anent the retirement benefits received from the Far East Bank and Trust Co. and
the shares of stock in the Manila Memorial Park and the Provident Group of
Companies, the trial court said:
The third issue that must be resolved by the Court is what to do with the assets of
the conjugal partnership in the event of declaration of annulment of the marriage.
The Honorable Supreme Court has held that the declaration of nullity of marriage
carries ipso facto a judgment for the liquidation of property (Domingo v. Court of
Appeals, et al., G.R. No. 104818, Sept. 17, 1993, 226 SCRA, pp. 572 – 573, 586).
Thus, speaking through Justice Flerida Ruth P. Romero, it was ruled in this case:

When a marriage is declared void ab initio, the law states that the final judgment
therein shall provide for the liquidation, partition and distribution of the properties
of the spouses, the custody and support of the common children and the delivery of
their presumptive legitimes, unless such matters had been adjudicated in the
previous proceedings.

The parties here were legally married on July 4, 1979, and therefore, all property
acquired during the marriage, whether the acquisition appears to have been made,
contracted or registered in the name of one or both spouses, is presumed to be
conjugal unless the contrary is proved (Art. 116, New Family Code; Art. 160, Civil
Code). Art. 117 of the Family Code enumerates what are conjugal partnership
properties. Among others they are the following:

1) Those acquired by onerous title during the marriage at the expense of the
common fund, whether the acquisition be for the partnership, or for only one of the
spouses;

2) Those obtained from the labor, industry, work or profession of either or both of
the spouses;

3) The fruits, natural, industrial, or civil, due or received during the marriage from
the common property, as well as the net fruits from the exclusive property of each
spouse. . . .

Applying the foregoing legal provisions, and without prejudice to requiring an

inventory of what are the parties’ conjugal properties and what are the exclusive
properties of each spouse, it was disclosed during the proceedings in this case that
the plaintiff who worked first as Branch Manager and later as Vice-President of Far
East Bank & Trust Co. received separation/retirement package from the said bank
in the amount of P3,701,500.00 which after certain deductions amounting to
P26,164.21 gave him a net amount of P3,675,335.79 and actually paid to him on
January 9, 1995 (Exhs. 6, 7, 8, 9, 10, 11). Not having shown debts or obligations
other than those deducted from the said retirement/separation pay, under Art. 129
of the Family Code “The net remainder of the conjugal partnership properties shall
constitute the profits, which shall be divided equally between husband and wife,
unless a different proportion or division was agreed upon in the marriage
settlement or unless there has been a voluntary waiver or forfeiture of such share
as provided in this Code.” In this particular case, however, there had been no
marriage settlement between the parties, nor had there been any voluntary waiver
or valid forfeiture of the defendant wife’s share in the conjugal partnership
properties. The previous cession and transfer by the plaintiff of his one-half (1/2)
share in their residential house and lot covered by T.C.T. No. S-35680 of the
Registry of Deeds of Parañaque, Metro Manila, in favor of the defendant as
stipulated in their Compromise Agreement dated July 12, 1993, and approved by
the Court in its Partial Decision dated August 6, 1993, was actually intended to be
in full settlement of any and all demands for past support. In reality, the defendant
wife had allowed some concession in favor of the plaintiff husband, for were the law
strictly to be followed, in the process of liquidation of the conjugal assets, the
conjugal dwelling and the lot on which it is situated shall, unless otherwise agreed
upon by the parties, be adjudicated to the spouse with whom their only child has
chosen to remain (Art. 129, par. 9). Here, what was done was one-half (1/2)
portion of the house was ceded to defendant so that she will not claim anymore for
past unpaid support, while the other half was transferred to their only child as his
presumptive legitime.

Consequently, nothing yet has been given to the defendant wife by way of her
share in the conjugal properties, and it is but just, lawful and fair, that she be given
one-half (1/2) share of the separation/retirement benefits received by the plaintiff
the same being part of their conjugal partnership properties having been obtained
or derived from the labor, industry, work or profession of said defendant husband in
accordance with Art. 117, par. 2 of the Family Code. For the same reason, she is
entitled to one-half (1/2) of the outstanding shares of stock of the plaintiff husband
with the Manila Memorial Park and the Provident Group of Companies.[22]

The Court of Appeals articulated on this matter as follows:

On Assignment of Error E, plaintiff-appellant assails the order of the trial court for
him to give one-half of his separation/retirement benefits from Far East Bank &
Trust Company and half of his outstanding shares in Manila Memorial Park and
Provident Group of Companies to the defendant-appellee as the latter’s share in the
conjugal partnership.

On August 6, 1993, the trial court rendered a Partial Decision approving the
Compromise Agreement entered into by the parties. In the same Compromise
Agreement, the parties had agreed that henceforth, their conjugal partnership is
dissolved. Thereafter, no steps were taken for the liquidation of the conjugal
partnership.

Finding that defendant-appellee is entitled to at least half of the

separation/retirement benefits which plaintiff-appellant received from Far East Bank
& Trust Company upon his retirement as Vice-President of said company for the
reason that the benefits accrued from plaintiff–appellant’s service for the bank for a
number of years, most of which while he was married to defendant-appellee, the
trial court adjudicated the same. The same is true with the outstanding shares of
plaintiff-appellant in Manila Memorial Park and Provident Group of Companies. As
these were acquired by the plaintiff-appellant at the time he was married to
defendant-appellee, the latter is entitled to one-half thereof as her share in the
conjugal partnership. We find no reason to disturb the ruling of the trial court.[23]
Since the present case does not involve the annulment of a bigamous marriage, the
provisions of Article 50 in relation to Articles 41, 42 and 43 of the Family Code,
providing for the dissolution of the absolute community or conjugal partnership of
gains, as the case may be, do not apply. Rather, the general rule applies, which is
that in case a marriage is declared void ab initio, the property regime applicable
and to be liquidated, partitioned and distributed is that of equal co-ownership.

In Valdes v. Regional Trial Court, Branch 102, Quezon City, [24] this Court expounded
on the consequences of a void marriage on the property relations of the spouses
and specified the applicable provisions of law:
The trial court correctly applied the law. In a void marriage, regardless of the cause
thereof, the property relations of the parties during the period of cohabitation is
governed by the provisions of Article 147 or Article 148, such as the case may be,
of the Family Code. Article 147 is a remake of Article 144 of the Civil Code as
interpreted and so applied in previous cases; it provides:

ART. 147. When a man and a woman who are capacitated to marry each other, live
exclusively with each other as husband and wife without the benefit of marriage or
under a void marriage, their wages and salaries shall be owned by them in equal
shares and the property acquired by both of them through their work or industry
shall be governed by the rules on co-ownership.
In the absence of proof to the contrary, properties acquired while they lived
together shall be presumed to have been obtained by their joint efforts, work or
industry, and shall be owned by them in equal shares. For purposes of this Article,
a party who did not participate in the acquisition by the other party of any property
shall be deemed to have contributed jointly in the acquisition thereof if the former's
efforts consisted in the care and maintenance of the family and of the household.

Neither party can encumber or dispose by acts inter vivos of his or her share in the
property acquired during cohabitation and owned in common, without the consent
of the other, until after the termination of their cohabitation.

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

This peculiar kind of co-ownership applies when a man and a woman, suffering no
legal impediment to marry each other, so exclusively live together as husband and
wife under a void marriage or without the benefit of marriage. The term
"capacitated" in the provision (in the first paragraph of the law) refers to the legal
capacity of a party to contract marriage, i.e., any "male or female of the age of
eighteen years or upwards not under any of the impediments mentioned in Articles
37 and 38" of the Code.

Under this property regime, property acquired by both spouses through their work
and industry shall be governed by the rules on equal co-ownership. Any property
acquired during the union is prima facie presumed to have been obtained through
their joint efforts. A party who did not participate in the acquisition of the property
shall still be considered as having contributed thereto jointly if said party's "efforts
consisted in the care and maintenance of the family household." Unlike the conjugal
partnership of gains, the fruits of the couple's separate property are not included in
the co-ownership.

Article 147 of the Family Code, in substance and to the above extent, has clarified
Article 144 of the Civil Code; in addition, the law now expressly provides that —

(a) Neither party can dispose or encumber by act[s] inter vivos [of] his or her share
in co-ownership property, without the consent of the other, during the period of
cohabitation; and

(b) In the case of a void marriage, any party in bad faith shall forfeit his or her
share in the co-ownership in favor of their common children; in default thereof or
waiver by any or all of the common children, each vacant share shall belong to the
respective surviving descendants, or still in default thereof, to the innocent party.
The forfeiture shall take place upon the termination of the cohabitation or
declaration of nullity of the marriage.

In deciding to take further cognizance of the issue on the settlement of the parties'
common property, the trial court acted neither imprudently nor precipitately; a
court which had jurisdiction to declare the marriage a nullity must be deemed
likewise clothed with authority to resolve incidental and consequential matters. Nor
did it commit a reversible error in ruling that petitioner and private respondent own
the "family home" and all their common property in equal shares, as well as in
concluding that, in the liquidation and partition of the property owned in common
by them, the provisions on co-ownership under the Civil Code, not Articles 50, 51
and 52, in relation to Articles 102 and 129, of the Family Code, should aptly prevail.
The rules set up to govern the liquidation of either the absolute community or the
conjugal partnership of gains, the property regimes recognized for valid
and voidable marriages (in the latter case until the contract is annulled), are
irrelevant to the liquidation of the co-ownership that exists between common-law
spouses. The first paragraph of Article 50 of the Family Code, applying paragraphs
(2), (3), (4) and (5) of Article 43, relates only, by its explicit terms, to voidable
marriages and, exceptionally, to void marriages under Article 40 of the Code, i.e.,
the declaration of nullity of a subsequent marriage contracted by a spouse of a prior
void marriage before the latter is judicially declared void. The latter is a special rule
that somehow recognizes the philosophy and an old doctrine that void marriages
are inexistent from the very beginning and no judicial decree is necessary to
establish their nullity. In now requiring for purposes of remarriage, the declaration
of nullity by final judgment of the previously contracted void marriage, the present
law aims to do away with any continuing uncertainty on the status of the second
marriage. It is not then illogical for the provisions of Article 43, in relation to
Articles 41 and 42, of the Family Code, on the effects of the termination of a
subsequent marriage contracted during the subsistence of a previous marriage to
be made applicable pro hac vice. In all other cases, it is not to be assumed that the
law has also meant to have coincident property relations, on the one hand, between
spouses in valid and voidable marriages (before annulment) and, on the other,
between common-law spouses or spouses of void marriages, leaving to ordain, in
the latter case, the ordinary rules on co-ownership subject to the provision of
Article 147 and Article 148 of the Family Code. It must be stressed, nevertheless,
even as it may merely state the obvious, that the provisions of the Family Code on
the "family home," i.e., the provisions found in Title V, Chapter 2, of the Family
Code, remain in force and effect regardless of the property regime of the spouses.
[25]

Since the properties ordered to be distributed by the court a quo were found, both
by the trial court and the Court of Appeals, to have been acquired during the union
of the parties, the same would be covered by the co-ownership. No fruits of a
separate property of one of the parties appear to have been included or involved in
said distribution. The liquidation, partition and distribution of the properties owned
in common by the parties herein as ordered by the court a quo should, therefore,
be sustained, but on the basis of co-ownership and not of the regime of conjugal
partnership of gains.

As to the issue on custody of the parties over their only child, Javy Singh
Buenaventura, it is now moot since he is about to turn twenty-five years of age on
May 27, 2005[26] and has, therefore, attained the age of majority.

With regard to the issues on support raised in the Petition for Certiorari, these
would also now be moot, owing to the fact that the son, Javy Singh Buenaventura,
as previously stated, has attained the age of majority.

WHEREFORE, the Decision of the Court of Appeals dated October 8, 1996 and its
Resolution dated December 10, 1996 which are contested in the Petition for Review
(G.R. No. 127449), are hereby MODIFIED, in that the award of moral and
exemplary damages, attorney’s fees, expenses of litigation and costs are deleted.
The order giving respondent one-half of the retirement benefits of petitioner from
Far East Bank and Trust Co. and one-half of petitioner’s shares of stock in Manila
Memorial Park and in the Provident Group of Companies is sustained but on the
basis of the liquidation, partition and distribution of the co-ownership and
not of the regime of conjugal partnership of gains. The rest of said Decision
and Resolution are AFFIRMED.

The Petition for Review on Certiorari (G.R. No. 127358) contesting the Court of

Appeals’ Resolutions of September 2, 1996 and November 13, 1996 which
increased the support pendente lite in favor of the parties’ son, Javy Singh
Buenaventura, is now MOOT and ACADEMIC and is, accordingly, DISMISSED.

No costs.

SO ORDERED.

Davide, Jr., C.J., (Chairman), Quisumbing, Ynares-Santiago, and Carpio,

JJ., concur.

SECOND DIVISION
[ G.R. NO. 146294, July 31, 2006 ]
JOHN ABING, PETITIONER, VS. JULIET WAEYAN,
RESPONDENT.

DECISION
GARCIA, J.: 

In this appeal by way of a petition for review under Rule 45 of the Rules of Court,
petitioner John Abing (John, hereafter) seeks to set aside the Decision[1] dated
October 24, 2000 of the Court of Appeals (CA) in CA-G.R. SP No. 48675, reversing
that of the Regional Trial Court (RTC) of Benguet, Branch 64, which affirmed an
earlier decision of the Municipal Trial Court (MTC) of Mankayan, Benguet in an
ejectment suit thereat commenced by the petitioner against the respondent.

In the main, the controversy is between a man and a woman who, during the good
old days, lived together as husband and wife without the benefit of marriage.
During their cohabitation, they acquired properties. Later, they parted ways, and
with it this litigation between them involving one of their common properties.

The facts:

Sometime in 1986, John and respondent Juliet Waeyan (Juliet, for short) met and
fell in love with each other. In time, the duo cohabited as husband and wife without
the benefit of marriage. Together, the couple bought a 2-storey residential house
from one Benjamin Macua which was erected on a lot owned by a certain Alejandro
Diño on Aurora Street, Mankayan, Benguet. Consequent to the purchase, the tax
declaration of the 2-storey house was transferred in the name of Juliet.

On December 2, 1991, Juliet left for overseas employment in Korea. She would
send money to John who deposited the same in their joint bank account.

In 1992, the original 2-storey residential house underwent renovation. To it was

annexed a new structure which housed a sari-sari store. This new structure and
the sari-sari store thereat are the properties involved in this case.

In 1994, Juliet returned from Korea and continued to live with John. She managed
the sari-sari store while John worked as a mine employee of the Lepanto
Consolidated Mining, Inc.

In 1995, the relationship between the two turned from bad to worse. Hence, they
decided to partition their properties. For the purpose, they executed on October 7,
1995 a Memorandum of Agreement. Unfortunately, the document was left unsigned
by the parties although signed by the witnesses thereto. Under their unsigned
agreement, John shall leave the couples' dwelling with Juliet paying him the amount
of P428,870.00 representing John's share in all their properties. On the same date -
October 7, 1995 - Juliet paid John the sum of P232,397.66 by way of partial
payment of his share, with the balance of P196,472.34 to be paid by Juliet in twelve
monthly installment beginning November 1995.

Juliet, however, failed to make good the balance. On account thereof, John
demanded of her to vacate the annex structure housing the sari-sari store. Juliet
refused, prompting John to file an ejectment suit against her before the MTC of
Mankayan, Benguet.

In his complaint, John alleged that he alone spent for the construction of the annex
structure with his own funds and thru money he borrowed from his relatives. In
fact, he added that the tax declaration for the structure was under his name. On
this premise, John claimed exclusive ownership of the subject structure, which
thereby gave him the right to eject Juliet therefrom upon the latter's failure to pay
the agreed balance due him under the aforementioned Memorandum of Agreement.

In her answer, Juliet countered that their original house was renovated thru their
common funds and that the subject structure annexed thereto was merely an
attachment or an extension of their original residential house, hence the same
pertained to the two of them in common.

In a decision[2] dated March 15, 1997, the MTC, on its finding that the money used
in the construction of the structure in question solely came from John, ruled that
the same exclusively pertained to the latter, and accordingly ordered Juliet's
eviction therefrom, including the sari-sari store thereat, and required her to
surrender possession thereof to John, thus:
WHEREFORE, judgment is rendered in favor of the plaintiff (John) and against the
defendant (Juliet).

Defendant is hereby ordered to vacate the premises of the store in litigation

covered by Tax Declaration No. 96-001-00445 in the name of the Plaintiff and turn
over possession thereof to the latter.

Defendant is hereby further ordered to pay the Plaintiff the sum of P2,500.00 a
month from the time she withheld possession of the store in litigation in June 1996
until she vacates the same and turn over possession thereof to the Plaintiff.

Defendant is finally ordered, to pay the sum of P5,000.00 to the Plaintiff by way of
Attorney's fees; and to pay the costs.

SO ORDERED.
On Juliet's appeal to the RTC, the latter, in its decision of July 29, 1995, affirmed
that of the MTC. Undaunted, Juliet then went to the CA in CA-G.R. SP No. 48675.

As stated at the threshold hereof, the CA, in its Decision of October 24, 2000,
[3]
 reversed that of the RTC, to wit:
WHEREFORE, the petition is GRANTED. The assailed decision of the Regional Trial
Court is hereby reversed and set aside. Petitioner, Juliet Waeyan is entitled to
possess the property and maintain therein her business.

SO ORDERED.
Partly says the CA in its reversal disposition:
It is undisputed that the parties lived together as husband and wife without the
benefit of marriage from 1986 to 1995 and that they acquired certain properties
which must be divided between them upon the termination of their common law
relationship.

xx xxx xxx

. . . their property relations cannot be governed by the provision of the Civil Code
on conjugal partnership... but by the rule on co-ownership.

xxx xxx xxx

. . . the parties' share in respect of the properties they have accumulated during
their cohabitation shall be equal unless there is proof to the contrary.
To the CA, John's evidence failed to establish that he alone spent for the
construction of the annex structure. Hence, the same pertained to both, and being
a co-owner herself, Juliet cannot be evicted therefrom, adding that if ever, John's
cause of action should have been for a sum of money "because he claims that Juliet
still owes him the payment for the extension." According to the CA, ejectment
cannot lie against Juliet because Juliet's possession of the premises in dispute was
not by virtue of a contract, express or implied, nor did she obtain such possession
thru force, intimidation, threat, strategy or stealth.

Hence, John's present recourse, submitting that the CA erred in -

1. not giving effect to the parties' Memorandum of Agreement which should

have been binding between them albeit unsigned by both;

2. in holding that the subject premises (annex structure housing the sari-

sari store) is owned by the two of them in common;

3. in ruling that the parties should settle their common properties in a separate
action for partition even as the community character of the subject premises
has not been proven.

We AFFIRM with modification.

Essentially, the issues raised center on the core question of whether or not the
property subject of the suit pertains to the exclusive ownership of petitioner, John.
Departing from the factual findings of the two courts before it, the CA found that
the premises in dispute is owned in common by Juliet and John, the latter having
failed to establish by the required quantum of proof that the money spent for the
construction thereof solely came from him. Being a co-owner of the same structure,
Juliet may not be ejected therefrom.

While the question raised is essentially one of fact, of which the Court normally
eschews from, yet, given the conflicting factual findings of the three courts below,
the Court shall go by the exception[4] to the general rule and proceed to make its
own assessment of the evidence.
First and foremost, it is undisputed that the parties hereto lived together as
husband and wife from 1986 to 1995 without the benefit of marriage. Neither is it
disputed that sometime in December 1991, Juliet left for Korea and worked thereat,
sending money to John which the latter deposited in their joint account. In fact,
Juliet was still in Korea when the annex structure was constructed in 1992.

Other than John's bare allegation that he alone, thru his own funds and money he
borrowed from his relatives, spent for the construction of the annex structure,
evidence is wanting to support such naked claim. For sure, John even failed to
reveal how much he spent therefor. Neither did he divulge the names of the alleged
relatives from whom he made his borrowings, let alone the amount of money he
borrowed from them. All that petitioner could offer by way of reinforcing his claim
of spending his own funds and borrowed money in putting up the subject structure
was the affidavit executed by a certain Manuel Macaraeg to the effect that
petitioner borrowed P30,000.00 from him. Even then, Macaraeg stated in his
affidavit that it was sometime in 1990 when John borrowed said amount from him.
With the petitioner's own admission that the subject structure was constructed only
in 1992, or two years after he borrowed P30,000.00 from Macaraeg, it is even
doubtful whether the amount he allegedly borrowed from the latter went into the
construction of the structure in dispute. More, it is noted that while petitioner was
able to present in evidence the Macaraeg affidavit, he failed to introduce similar
affidavits, if any, of his close relatives from whom he claimed to have made similar
borrowings. For sure, not a single relative came forward to confirm petitioner's tale.
In short, there is a paucity of evidence, testimonial or documentary, to support
petitioner's self-serving allegation that the annex structure which housed the sari-
sari store was put up thru his own funds and/or money borrowed by him. Sure,
petitioner has in his favor the tax declaration covering the subject structure. We
have, however, ruled time and again that tax declarations do not prove ownership
but at best an indicia of claims of ownership.[5] Payment of taxes is not proof of
ownership, any more than indicating possession in the concept of an owner.
[6]
 Neither tax receipts nor declaration of ownership for taxation purposes are
evidence of ownership or of the right to possess realty when not supported by other
effective proofs.[7]

In this connection, Article 147 of the Family Code is instructive. It reads:

Art. 147. When a man and a woman who are capacitated to marry each other, live
exclusively with each other as husband and wife without the benefit of marriage or
under a void marriage, their wages and salaries shall be owned by them in equal
shares and the property acquired by both of them through their work or industry
shall be governed by the rules on co-ownership.

In the absence of proof to the contrary, properties acquired while they lived
together shall be presumed to have been obtained by their joint efforts, work or
industry, and shall be owned by them in equal shares. For purposes of this Article,
a party who did not participate in the acquisition by other party of any property
shall be deemed to have contributed jointly in the acquisition thereof if the former's
efforts consisted in the care and maintenance of the family and of the household.
The law is clear. In the absence, as here, of proofs to the contrary, any property
acquired by common-law spouses during their period of cohabitation is presumed to
have been obtained thru their joint efforts and is owned by them in equal shares.
Their property relationship is governed by the rules on co-ownership. And under
this regime, they owned their properties in common "in equal shares." Being herself
a co-owner of the structure in question, Juliet, as correctly ruled by the CA, may
not be ejected therefrom.

True it is that under Article 487[8] of the Civil Code, a co-owner may bring an action
for ejectment against a co-owner who takes exclusive possession and asserts
exclusive ownership of a common property. It bears stressing, however, that in this
case, evidence is totally wanting to establish John's or Juliet's exclusive ownership
of the property in question. Neither did Juliet obtain possession thereof by virtue of
a contract, express or implied, or thru intimidation, threat, strategy or stealth. As
borne by the record, Juliet was in possession of the subject structure and the sari-
sari store thereat by virtue of her being a co-owner thereof. As such, she is as
much entitled to enjoy its possession and ownership as John.

We, however, disagree with the ruling of the CA that the subject Memorandum of
Agreement, being unsigned by Juliet and John, has no binding effect between them.

It is a matter of record that pursuant to said Agreement, Juliet did pay John the
amount of P232,397.66, as initial payment for John's share in their common
properties, with the balance of P196,472.34 payable in twelve monthly installments
beginning November 1995. It is also a matter of record that the Agreement was
signed by the witnesses thereto. Hence, the irrelevant circumstances that the
Agreement was left unsigned by Juliet and John cannot adversely affect its binding
force or effect between them, as evidently, Juliet's initial payment of P232,397.66
to John was in fulfillment of what the parties had agreed upon thereunder.
However, and as correctly held by the CA, Juliet's failure to pay John the balance of
the latter's share in their common properties could at best give rise to an action for
a sum of money against Juliet, or for rescission of the said agreement and not for
ejectment.

WHEREFORE, the petition is DENIED and the assailed CA Decision is AFFIRMED,

except that portion thereof denying effect to the parties' Memorandum of
Agreement for being unsigned by both.

Costs against petitioner.

SO ORDERED.

Puno, (Chairperson), Sandoval-Gutierrez, Corona, and Azcuna, JJ., concur.

SECOND DIVISION
 [ G.R. No. 163744, February 29, 2008 ]
METROPOLITAN BANK AND TRUST CO., Petitioner, vs.
NICHOLSON PASCUAL a.k.a. NELSON PASCUAL, Respondent.

DECISION

VELASCO JR., J.: 

Respondent Nicholson Pascual and Florencia Nevalga were married on January 19,
1985.  During the union, Florencia bought from spouses Clarito and Belen Sering a
250-square meter lot with a three-door apartment standing thereon located in
Makati City.  Subsequently, Transfer Certificate of Title (TCT) No. S-101473/T-510
covering the purchased lot was canceled and, in lieu thereof, TCT No. 156283[1] of
the Registry of Deeds of Makati City was issued in the name of Florencia, “married
to Nelson Pascual” a.k.a. Nicholson Pascual.

In 1994, Florencia filed a suit for the declaration of nullity of marriage under Article
36 of the Family Code, docketed as Civil Case No. Q-95-23533.  After trial, the
Regional Trial Court (RTC), Branch 94 in Quezon City rendered, on July 31, 1995, a
Decision,[2] declaring the marriage of Nicholson and Florencia null and void on the
ground of psychological incapacity on the part of Nicholson.  In the same decision,
the RTC, inter alia, ordered the dissolution and liquidation of the ex-spouses’
conjugal partnership of gains. Subsequent events saw the couple going their
separate ways without liquidating their conjugal partnership.

On April 30, 1997, Florencia, together with spouses Norberto and Elvira Oliveros,
obtained a PhP 58 million loan from petitioner Metropolitan Bank and Trust Co.
(Metrobank).  To secure the obligation, Florencia and the spouses Oliveros executed
several real estate mortgages (REMs) on their properties, including one involving
the lot covered by TCT No. 156283. Among the documents Florencia submitted to
procure the loan were a copy of TCT No. 156283, a photocopy of the marriage-
nullifying RTC decision, and a document denominated as “Waiver” that Nicholson
purportedly executed on April 9, 1995.  The waiver, made in favor of Florencia,
covered the conjugal properties of the ex-spouses listed therein, but did not
incidentally include the lot in question.

Due to the failure of Florencia and the spouses Oliveros to pay their loan obligation
when it fell due, Metrobank, on November 29, 1999, initiated foreclosure
proceedings under Act No. 3135, as amended, before the Office of the Notary Public
of Makati City. Subsequently, Metrobank caused the publication of the notice of sale
on three issues of Remate.[3]  At the auction sale on January 21, 2000, Metrobank
emerged as the highest bidder.

Getting wind of the foreclosure proceedings, Nicholson filed on June 28, 2000,
before the RTC in Makati City, a Complaint to declare the nullity of the mortgage of
the disputed property, docketed as Civil Case No. 00-789 and eventually raffled to
Branch 65 of the court.  In it, Nicholson alleged that the property, which is still
conjugal property, was mortgaged without his consent.

Metrobank, in its Answer with Counterclaim and Cross-Claim,[4] alleged that the

disputed lot, being registered in Florencia’s name, was paraphernal.  Metrobank
also asserted having approved the mortgage in good faith.

Florencia did not file an answer within the reglementary period and, hence, was
subsequently declared in default.

The RTC Declared the REM Invalid

After trial on the merits, the RTC rendered, on September 24, 2001, judgment
finding for Nicholson. The fallo reads:
PREMISES CONSIDERED, the Court renders judgment declaring the real estate
mortgage on the property covered by [TCT] No. 156283 of the Registry of Deeds
for the City of Makati as well as all proceedings thereon null and void.

The Court further orders defendants [Metrobank and Florencia] jointly and severally
to pay plaintiff [Nicholson]:

1. PhP100,000.00 by way of moral damages;

2. PhP75,000.00 by way of attorney’s fees; and
3. The costs.

SO ORDERED.[5]
Even as it declared the invalidity of the mortgage, the trial court found the said lot
to be conjugal, the same having been acquired during the existence of the marriage
of Nicholson and Florencia.  In so ruling, the RTC invoked Art. 116 of the Family
Code, providing that “all property acquired during the marriage, whether the
acquisition appears to have been made, contracted or registered in the name of one
or both spouses, is presumed to be conjugal unless the contrary is proved.” To the
trial court, Metrobank had not overcome the presumptive conjugal nature of the
lot.  And being conjugal, the RTC concluded that the disputed property may not be
validly encumbered by Florencia without Nicholson’s consent.

The RTC also found the deed of waiver Florencia submitted to Metrobank to be
fatally defective. For let alone the fact that Nicholson denied executing the same
and that the signature of the notarizing officer was a forgery, the waiver document
was allegedly executed on April 9, 1995 or a little over three months before the
issuance of the RTC decision declaring the nullity of marriage between Nicholson
and Florencia.

The trial court also declared Metrobank as a mortgagee in bad faith on account of
negligence, stating the observation that certain data appeared in the supporting
contract documents, which, if properly scrutinized, would have put the bank on
guard against approving the mortgage.  Among the data referred to was the date of
execution of the deed of waiver.

The RTC dismissed Metrobank’s counterclaim and cross-claim against the ex-
spouses.

Metrobank’s motion for reconsideration was denied.  Undeterred, Metrobank

appealed to the Court of Appeals (CA), the appeal docketed as CA-G.R. CV No.
74874.

The CA Affirmed with Modification the RTC’s Decision

On January 28, 2004, the CA rendered a Decision affirmatory of that of the RTC,
except for the award therein of moral damages and attorney’s fees which the CA
ordered deleted.  The dispositive portion of the CA’s Decision reads:
WHEREFORE, premises considered, the appealed decision is hereby AFFIRMED
WITH MODIFICATION with respect to the award of moral damages and attorney’s
fees which is hereby DELETED.

SO ORDERED.[6]
Like the RTC earlier held, the CA ruled that Metrobank failed to overthrow the
presumption established in Art. 116 of the Family Code. And also decreed as going
against Metrobank was Florencia’s failure to comply with the prescriptions of the
succeeding Art. 124 of the Code on the disposition of conjugal partnership property.
Art. 124 states:
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 x x x.

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 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.
As to the deletion of the award of moral damages and attorney’s fees, the CA, in
gist, held that Metrobank did not enter into the mortgage contract out of ill-will or
for some fraudulent purpose, moral obliquity, or like dishonest considerations as to
justify damages.

Metrobank moved but was denied reconsideration by the CA.

Thus, Metrobank filed this Petition for Review on Certiorari under Rule 45, raising
the following issues for consideration:
 a. Whether or not the [CA] erred in declaring subject property as conjugal by
applying Article 116 of the Family Code.

b. Whether or not the [CA] erred in not holding that the declaration of nullity of
marriage between the respondent Nicholson Pascual and Florencia
Nevalga ipso facto dissolved the regime of community of property of the
spouses.

c. Whether or not the [CA] erred in ruling that the petitioner is an innocent
purchaser for value.[7]

Our Ruling

A modification of the CA’s Decision is in order.

The Disputed Property is Conjugal

It is Metrobank’s threshold posture that Art. 160 of the Civil Code providing that
“[a]ll property of the marriage is presumed to belong to the conjugal partnership,
unless it be prove[n] that it pertains exclusively to the husband or to the wife,”
applies.  To Metrobank, Art. 116 of the Family Code could not be of governing
application inasmuch as Nicholson and Florencia contracted marriage before the
effectivity of the Family Code on August 3, 1988. Citing Manongsong v. Estimo,
[8]
 Metrobank asserts that the presumption of conjugal ownership under Art. 160 of
the Civil Code applies when there is proof that the property was acquired during the
marriage.  Metrobank adds, however, that for the presumption of conjugal
ownership to operate, evidence must be adduced to prove that not only was the
property acquired during the marriage but that conjugal funds were used for the
acquisition, a burden Nicholson allegedly failed to discharge.

To bolster its thesis on the paraphernal nature of the disputed property, Metrobank
cites Francisco v. Court of Appeals[9] and Jocson v. Court of Appeals,[10] among other
cases, where this Court held that a property registered in the name of a certain
person with a description of being married is no proof that the property was
acquired during the spouses’ marriage.

On the other hand, Nicholson, banking on De Leon v. Rehabilitation Finance

Corporation[11] and Wong v. IAC,[12]  contends that Metrobank failed to overcome
the legal presumption that the disputed property is conjugal.  He asserts that
Metrobank’s arguments on the matter of presumption are misleading as only one
postulate needs to be shown for the presumption in favor of conjugal ownership to
arise, that is, the fact of acquisition during marriage. Nicholson dismisses, as
inapplicable, Francisco and Jocson, noting that they are relevant only when there is
no indication as to the exact date of acquisition of the property alleged to be
conjugal.

As a final point, Nicholson invites attention to the fact that Metrobank had virtually
recognized the conjugal nature of the property in at least three instances. The first
was when the bank lumped him with Florencia in Civil Case No. 00-789 as co-
mortgagors and when they were referred to as “spouses” in the petition for
extrajudicial foreclosure of mortgage. Then came the published notice of foreclosure
sale where Nicholson was again designated as co-mortgagor. And third, in its
demand-letter[13] to vacate the disputed lot, Metrobank addressed Nicholson and
Florencia as “spouses,” albeit the finality of the decree of nullity of marriage
between them had long set in.

We find for Nicholson.

First, while Metrobank is correct in saying that Art. 160 of the Civil Code, not Art.
116 of the Family Code, is the applicable legal provision since the property was
acquired prior to the enactment of the Family Code, it errs in its theory that, before
conjugal ownership could be legally presumed, there must be a showing that the
property was acquired during marriage using conjugal funds.  Contrary to
Metrobank’s submission, the Court did not, in Manongsong,[14] add the matter of the
use of conjugal funds as an essential requirement for the presumption of conjugal
ownership to arise.  Nicholson is correct in pointing out that only proof of
acquisition during the marriage is needed to raise the presumption that the
property is conjugal.  Indeed, if proof on the use of conjugal is still required as a
necessary condition before the presumption can arise, then the legal presumption
set forth in the law would veritably be a superfluity.  As we stressed in Castro v.
Miat:
Petitioners also overlook Article 160 of the New Civil Code.  It provides that “all
property of the marriage is presumed to be conjugal partnership, unless it be
prove[n] that it pertains exclusively to the husband or to the wife.”  This
article does not require proof that the property was acquired with funds of
the partnership.  The presumption applies even when the manner in which the
property was acquired does not appear.[15] (Emphasis supplied.)
Second,  Francisco and Jocson do not reinforce Metrobank’s theory. Metrobank
would thrust on the Court, invoking the two cases, the argument that the
registration of the property in the name of “Florencia Nevalga, married to Nelson
Pascual” operates to describe only the marital status of the title holder, but not as
proof that the property was acquired during the existence of the marriage.

Metrobank is wrong. As Nicholson aptly points out, if proof obtains on the

acquisition of the property during the existence of the marriage, then the
presumption of conjugal ownership applies.  The correct lesson
of Francisco and Jocson is that proof of acquisition during the marital coverture is a
condition sine qua non for the operation of the presumption in favor of conjugal
ownership.  When there is no showing as to when the property was acquired by the
spouse, the fact that a title is in the name of the spouse is an indication that the
property belongs exclusively to said spouse.[16]

The Court, to be sure, has taken stock of Nicholson’s arguments regarding

Metrobank having implicitly acknowledged, thus being in virtual estoppel to
question, the conjugal ownership of the disputed lot, the bank having named the
former in the foreclosure proceedings below as either the spouse of Florencia or her
co-mortgagor. It is felt, however, that there is no compelling reason to delve into
the matter of estoppel, the same having been raised only for the first time in this
petition.  Besides, however Nicholson was designated below does not really change,
one way or another, the classification of the lot in question.

Termination of Conjugal Property Regime does

not ipso facto End the Nature of Conjugal Ownership

Metrobank next maintains that, contrary to the CA’s holding, Art. 129 of the Family
Code is inapplicable.  Art. 129 in part reads:
Art. 129.  Upon the dissolution of the conjugal partnership regime, the following
procedure shall apply:

x  x  x  x

(7)  The net remainder of the conjugal partnership properties shall constitute the
profits, which shall be divided equally between husband and wife, unless a different
proportion or division was agreed upon in the marriage settlements or unless there
has been a voluntary waiver or forfeiture of such share as provided in this Code.
Apropos the aforequoted provision, Metrobank asserts that the waiver executed by
Nicholson, effected as it were before the dissolution of the conjugal property
regime, vested on Florencia full ownership of all the properties acquired during the
marriage.

Nicholson counters that the mere declaration of nullity of marriage, without more,
does not automatically result in a regime of complete separation when it is shown
that there was no liquidation of the conjugal assets.

We again find for Nicholson.

While the declared nullity of marriage of Nicholson and Florencia severed their
marital bond and dissolved the conjugal partnership, the character of the properties
acquired before such declaration continues to subsist as conjugal properties until
and after the liquidation and partition of the partnership. This conclusion holds true
whether we apply Art. 129 of the Family Code on liquidation of the conjugal
partnership’s assets and liabilities which is generally prospective in application, or
Section 7, Chapter 4, Title IV, Book I (Arts. 179 to 185) of the Civil Code on the
subject, Conjugal Partnership of Gains. For, the relevant provisions of both Codes
first require the liquidation of the conjugal properties before a regime of separation
of property reigns.

In Dael v. Intermediate Appellate Court, we ruled that pending its liquidation

following its dissolution, the conjugal partnership of gains is converted into an
implied ordinary co-ownership among the surviving spouse and the other heirs of
the deceased.[17]

In this pre-liquidation scenario, Art. 493 of the Civil Code shall govern the property
relationship between the former spouses, where:
Each co-owner shall have the full ownership of his part and of the fruits and
benefits pertaining thereto, and he may therefore alienate, assign or mortgage it,
and even substitute another person in its enjoyment, except when personal rights
are involved.  But the effect of the alienation or the mortgage, with respect
to the co-owners, shall be limited to the portion which may be allotted to
him in the division upon the termination of the co-ownership. (Emphasis
supplied.)
In the case at bar, Florencia constituted the mortgage on the disputed lot on April
30, 1997, or a little less than two years after the dissolution of the conjugal
partnership on July 31, 1995, but before the liquidation of the partnership. Be that
as it may, what governed the property relations of the former spouses when the
mortgage was given is the aforequoted Art. 493. Under it, Florencia has the right to
mortgage or even sell her one-half (1/2) undivided interest in the disputed property
even without the consent of Nicholson.  However, the rights of Metrobank, as
mortgagee, are limited only to the 1/2 undivided portion that Florencia owned.
Accordingly, the mortgage contract insofar as it covered the remaining 1/2
undivided portion of the lot is null and void, Nicholson not having consented to the
mortgage of his undivided half.

The conclusion would have, however, been different if Nicholson indeed duly waived
his share in the conjugal partnership. But, as found by the courts a quo, the April 9,
1995 deed of waiver allegedly executed by Nicholson three months prior to the
dissolution of the marriage and the conjugal partnership of gains on July 31, 1995
bore his forged signature, not to mention  that of the notarizing officer. A spurious
deed of waiver does not transfer any right at all, albeit it may become the root of a
valid title in the hands of an innocent buyer for value.

Upon the foregoing perspective, Metrobank’s right, as mortgagee and as the

successful bidder at the auction of the lot, is confined only to the 1/2 undivided
portion thereof heretofore pertaining in ownership to Florencia.  The other
undivided half belongs to Nicholson. As owner pro indiviso of a portion of the lot in
question, Metrobank may ask for the partition of the lot and its property rights
“shall be limited to the portion which may be allotted to [the bank] in the division
upon the termination of the co-ownership.”[18] This disposition is in line with the
well-established principle that the binding force of a contract must be recognized as
far as it is legally possible to do so––quando res non valet ut ago, valeat quantum
valere potest.[19]

In view of our resolution on the validity of the auction of the lot in favor of
Metrobank, there is hardly a need to discuss at length whether or not Metrobank
was a mortgagee in good faith. Suffice it to state for the nonce that where the
mortgagee is a banking institution, the general rule that a purchaser or mortgagee
of the land need not look beyond the four corners of the title is inapplicable.
[20]
 Unlike private individuals, it behooves banks to exercise greater care and due
diligence before entering into a mortgage contract. The ascertainment of the status
or condition of the property offered as security and the validity of the mortgagor’s
title must be standard and indispensable part of the bank’s operation.[21] A bank
that failed to observe due diligence cannot be accorded the status of a bona
fide mortgagee,[22] as here.

But as found by the CA, however, Metrobank’s failure to comply with the due
diligence requirement was not the result of a dishonest purpose, some moral
obliquity or breach of a known duty for some interest or ill-will that partakes of
fraud that would justify damages.

WHEREFORE, the petition is PARTLY GRANTED.  The appealed Decision of the CA

dated January 28, 2004, upholding with modification the Decision of the RTC,
Branch 65 in Makati City, in Civil Case No. 00-789, is AFFIRMED with
the MODIFICATION that the REM over the lot covered by TCT No. 156283 of the
Registry of Deeds of Makati City is hereby declared valid only insofar as the pro
indiviso share of Florencia thereon is concerned.

As modified, the Decision of the RTC shall read:

PREMISES CONSIDERED, the real estate mortgage on the property covered by

TCT No. 156283 of the Registry of Deeds of Makati City and all proceedings thereon
are NULL and VOID with respect to the undivided 1/2 portion of the disputed
property owned by Nicholson, but VALID with respect to the other undivided 1/2
portion belonging to Florencia.

The claims of Nicholson for moral damages and attorney’s fees are DENIED for lack
of merit.

No pronouncement as to costs.

SO ORDERED.

Carpio (Acting Chairperson), Azcuna, Carpio-Morales, and Tinga, JJ., concur.

Quisumbing, (Chairperson), J., on official leave.

SECOND DIVISION
[ G.R. No. 178044, January 19, 2011 ]
ALAIN M. DIÑO , PETITIONER, VS. MA. CARIDAD L. DIÑO,
RESPONDENT.

DECISION
CARPIO, J.: 

The Case

Before the Court is a petition for review[1] assailing the 18 October 2006

Decision[2] and the 12 March 2007 Order[3] of the Regional Trial Court of Las Piñas
City, Branch 254 (trial court) in Civil Case No. LP-01-0149.

The Antecedent Facts

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

On 30 May 2001, petitioner filed an action for Declaration of Nullity of Marriage

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

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

On 30 April 2002, the Office of the Las Piñas prosecutor found that there were no
indicative facts of collusion between the parties and the case was set for trial on the
merits.

Dr. Nedy L. Tayag (Dr. Tayag), a clinical psychologist, submitted a psychological

report establishing that respondent was suffering from Narcissistic Personality
Disorder which was deeply ingrained in her system since her early formative years.
Dr. Tayag found that respondent's disorder was long-lasting and by nature,
incurable.

In its 18 October 2006 Decision, the trial court granted the petition on the ground
that respondent was psychologically incapacited to comply with the essential
marital obligations at the time of the celebration of the marriage.
 The Decision of the Trial Court

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

The dispositive portion of the trial court's decision reads:

WHEREFORE, in view of the foregoing, judgment is hereby rendered:

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

2. Dissolving the regime of absolute community of property.

A DECREE OF ABSOLUTE NULLITY OF MARRIAGE shall only be issued upon

compliance with Article[s] 50 and 51 of the Family Code.

Let copies of this Decision be furnished the parties, the Office of the Solicitor
General, Office of the City Prosecutor, Las Piñas City and the Office of the Local Civil
Registrar of Las Piñas City, for their information and guidance.

SO ORDERED.[4]

Petitioner filed a motion for partial reconsideration questioning the dissolution of

the absolute community of property and the ruling that the decree of annulment
shall only be issued upon compliance with Articles 50 and 51 of the Family Code.

In its 12 March 2007 Order, the trial court partially granted the motion and
modified its 18 October 2006 Decision as follows:

WHEREFORE, in view of the foregoing, judgment is hereby rendered:

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

2) Dissolving the regime of absolute community of property.

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

Let copies of this Order be furnished the parties, the Office of the Solicitor General,
the Office of the City Prosecutor of Las Piñas City and the Local Civil Registrar of
Las Piñas City, for their information and guidance.[5]

Hence, the petition before this Court.

The Issue

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

The Ruling of this Court

The petition has merit.

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

We agree with petitioner.

The Court has ruled in Valdes v. RTC, Branch 102, Quezon City that in a void
marriage, regardless of its cause, the property relations of the parties during the
period of cohabitation is governed either by Article 147 or Article 148 of the Family
Code.[7] Article 147 of the Family Code applies to union of parties who are legally
capacitated and not barred by any impediment to contract marriage, but whose
marriage is nonetheless void,[8] such as petitioner and respondent in the case
before the Court.

Article 147 of the Family Code provides:

Article 147. When a man and a woman who are capacitated to marry each other,
live exclusively with each other as husband and wife without the benefit of marriage
or under a void marriage, their wages and salaries shall be owned by them in equal
shares and the property acquired by both of them through their work or industry
shall be governed by the rules on co-ownership.

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

Neither party can encumber or dispose by acts inter vivos of his or her share in the
property acquired during cohabitation and owned in common, without the consent
of the other, until after the termination of their cohabitation.

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

For Article 147 of the Family Code to apply, the following elements must be
present:

1. The man and the woman must be capacitated to marry each other;
2. They live exclusively with each other as husband and wife; and
3. Their union is without the benefit of marriage, or their marriage is void.[9]

All these elements are present in this case and there is no question that Article 147
of the Family Code applies to the property relations between petitioner and
respondent.

We agree with petitioner that the trial court erred in ordering that a decree of
absolute nullity of marriage shall be issued only after liquidation, partition and
distribution of the parties' properties under Article 147 of the Family Code. The
ruling has no basis because Section 19(1) of the Rule does not apply to cases
governed under Articles 147 and 148 of the Family Code. Section 19(1) of the Rule
provides:

Sec. 19. Decision. - (1) If the court renders a decision granting the petition, it shall
declare therein that the decree of absolute nullity or decree of annulment shall be
issued by the court only after compliance with Articles 50 and 51 of the Family
Code as implemented under the Rule on Liquidation, Partition and Distribution of
Properties.

The pertinent provisions of the Family Code cited in Section 19(1) of the Rule are:

Article 50. The effects provided for in paragraphs (2), (3), (4) and (5) of Article 43
and in Article 44 shall also apply in proper cases to marriages which are declared
void ab initio or annulled by final judgment under Articles 40 and 45.[10]
The final judgment in such cases shall provide for the liquidation, partition and
distribution of the properties of the spouses, the custody and support of the
common children, and the delivery of their presumptive legitimes, unless such
matters had been adjudicated in previous judicial proceedings.

All creditors of the spouses as well as of the absolute community of the conjugal
partnership shall be notified of the proceedings for liquidation.

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

Article 51. In said partition, the value of the presumptive legitimes of all common
children, computed as of the date of the final judgment of the trial court, shall be
delivered in cash, property or sound securities, unless the parties, by mutual
agreement judicially approved, had already provided for such matters.

The children of their guardian, or the trustee of their property, may ask for the
enforcement of the judgment.

The delivery of the presumptive legitimes herein prescribed shall in no way

prejudice the ultimate successional rights of the children accruing upon the death of
either or both of the parents; but the value of the properties already received under
the decree of annulment or absolute nullity shall be considered as advances on their
legitime.

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

Article 40 of the Family Code contemplates a situation where a second or bigamous

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

x x x where the absolute nullity of a previous marriage is sought to be invoked for

purposes of contracting a second marriage, the sole basis acceptable in law, for
said projected marriage to be free from legal infirmity, is a final judgment declaring
a previous marriage void.[11]

Article 45 of the Family Code, on the other hand, refers to voidable marriages,
meaning, marriages which are valid until they are set aside by final judgment of a
competent court in an action for annulment.[12] In both instances under Articles 40
and 45, the marriages are governed either by absolute community of property[13] or
conjugal partnership of gains[14] unless the parties agree to a complete separation
of property in a marriage settlement entered into before the marriage. Since the
property relations of the parties is governed by absolute community of property or
conjugal partnership of gains, there is a need to liquidate, partition and distribute
the properties before a decree of annulment could be issued. That is not the case
for annulment of marriage under Article 36 of the Family Code because the
marriage is governed by the ordinary rules on co-ownership.

In this case, petitioner's marriage to respondent was declared void under Article
36[15] of the Family Code and not under Article 40 or 45. Thus, what governs the
liquidation of properties owned in common by petitioner and respondent are the
rules on co-ownership. In Valdes, the Court ruled that the property relations of
parties in a void marriage during the period of cohabitation is governed either by
Article 147 or Article 148 of the Family Code.[16] The rules on co-ownership apply
and the properties of the spouses should be liquidated in accordance with the Civil
Code provisions on co-ownership. Under Article 496 of the Civil Code, "[p]artition
may be made by agreement between the parties or by judicial proceedings. x x x."
It is not necessary to liquidate the properties of the spouses in the same proceeding
for declaration of nullity of marriage.

WHEREFORE, we AFFIRM the Decision of the trial court with

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

SO ORDERED.

Nachura, Peralta, Abad, and Mendoza, JJ., concur.

SECOND DIVISION
[ G.R. No. 202370, September 23, 2013 ]
JUAN SEVILLA SALAS, JR., PETITIONER, VS. EDEN VILLENA
AGUILA, RESPONDENT.

DECISION

CARPIO, J.: 
 The Case

This petition for review on certiorari[1] assails the 16 March 2012 Decision[2] and the
28 June 2012 Resolution[3] of the Court of Appeals (CA) in CA-G.R. CV No. 95322.
The CA affirmed the 26 September 2008 Order[4] of the Regional Trial Court of
Nasugbu, Batangas, Branch 14 (RTC), in Civil Case No. 787.

The Facts

On 7 September 1985, petitioner Juan Sevilla Salas, Jr. (Salas) and respondent
Eden Villena Aguila (Aguila) were married. On 7 June 1986, Aguila gave birth to
their daughter, Joan Jiselle. Five months later, Salas left their conjugal dwelling.
Since then, he no longer communicated with Aguila or their daughter.

On 7 October 2003, Aguila filed a Petition for Declaration of Nullity of Marriage

(petition) citing psychological incapacity under Article 36 of the Family Code. The
petition states that they “have no conjugal properties whatsoever.”[5] In the Return
of Summons dated 13 October 2003, the sheriff narrated that Salas instructed his
mother Luisa Salas to receive the copy of summons and the petition.[6]

On 7 May 2007, the RTC rendered a Decision[7] declaring the nullity of the marriage
of Salas and Aguila (RTC Decision). The RTC Decision further provides for the
“dissolution of their conjugal partnership of gains, if any.”[8]

On 10 September 2007, Aguila filed a Manifestation and Motion[9] stating that she

discovered: (a) two 200-square-meter parcels of land with improvements located in
San Bartolome, Quezon City, covered by Transfer Certificate of Title (TCT) No. N-
259299-A and TCT No. N-255497; and (b) a 108-square-meter parcel of land with
improvement located in Tondo, Manila, covered by TCT No. 243373 (collectively,
“Discovered Properties”). The registered owner of the Discovered Properties is
“Juan S. Salas, married to Rubina C. Salas.” The manifestation was set for hearing
on 21 September 2007. However, Salas’ notice of hearing was returned unserved
with the remark, “RTS Refused To Receive.”

On 19 September 2007, Salas filed a Manifestation with Entry of

Appearance[10] requesting for an Entry of Judgment of the RTC Decision since no
motion for reconsideration or appeal was filed and no conjugal property was
involved.

On 21 September 2007, the hearing for Aguila’s manifestation ensued, with Aguila,
her counsel and the state prosecutor present. During the hearing, Aguila testified
that on 17 April 2007 someone informed her of the existence of the Discovered
Properties. Thereafter, she verified the information and secured copies of TCTs of
the Discovered Properties. When asked to clarify, Aguila testified that Rubina C.
Salas (Rubina) is Salas’ common-law wife.[11]

On 8 February 2008, Salas filed an Opposition to the Manifestation[12] alleging that

there is no conjugal property to be partitioned based on Aguila’s petition. According
to Salas, Aguila’s statement was a judicial admission and was not made through
palpable mistake. Salas claimed that Aguila waived her right to the Discovered
Properties. Salas likewise enumerated properties he allegedly waived in favor of
Aguila, to wit:  (1) parcels of land with improvements located in Sugar Landing
Subdivision, Alangilan, Batangas City; No. 176 Brias Street, Nasugbu, Batangas; P.
Samaniego Street, Silangan, Nasugbu, Batangas; and Batangas City, financed by
Filinvest; (2) cash amounting to P200,000.00; and (3) motor vehicles, specifically
Honda City and Toyota Tamaraw FX (collectively, “Waived Properties”). Thus, Salas
contended that the conjugal properties were deemed partitioned.

The Ruling of the Regional Trial Court

In its 26 September 2008 Order, the RTC ruled in favor of Aguila. The dispositive
portion of the Order reads:

WHEREFORE, foregoing premises being considered, the petitioner and the

respondent are hereby directed to partition between themselves by proper
instruments of conveyance, the following properties, without prejudice to the
legitime of their legitimate child, Joan Jisselle Aguila Salas:

(1) A parcel of land registered in the name of Juan S. Salas married to Rubina C.
Salas located in San Bartolome, Quezon City and covered by TCT No. N-259299-A
marked as Exhibit “A” and its improvements;

(2) A parcel of land registered in the name of Juan S. Salas married to Rubina C.
Salas located in San Bartolome, Quezon City and covered by TCT No. N-255497
marked as Exhibit “B” and its improvements;

(3) A parcel of land registered in the name of Juan S. Salas married to Rubina
Cortez Salas located in Tondo and covered by TCT No. 243373-Ind. marked as
Exhibit “D” and its improvements.

Thereafter, the Court shall confirm the partition so agreed upon by the parties, and
such partition, together with the Order of the Court confirming the same, shall be
recorded in the Registry of Deeds of the place in which the property is situated.
SO ORDERED.[13]

The RTC held that pursuant to the Rules,[14] even upon entry of judgment granting
the annulment of marriage, the court can proceed with the liquidation, partition and
distribution of the conjugal partnership of gains if it has not been judicially
adjudicated upon, as in this case. The RTC found that the Discovered Properties are
among the conjugal properties to be partitioned and distributed between Salas and
Aguila. However, the RTC held that Salas failed to prove the existence of the
Waived Properties.

On 11 November 2008, Rubina filed a Complaint-in-Intervention, claiming that: (1)

she is Rubina Cortez, a widow and unmarried to Salas; (2) the Discovered
Properties are her paraphernal properties; (3) Salas did not contribute money to
purchase the Discovered Properties as he had no permanent job in Japan; (4) the
RTC did not acquire jurisdiction over her as she was not a party in the case; and (5)
she authorized her brother to purchase the Discovered Properties but because he
was not well-versed with legal documentation, he registered the properties in the
name of “Juan S. Salas, married to Rubina C. Salas.”

In its 16 December 2009 Order, the RTC denied the Motion for Reconsideration filed
by Salas. The RTC found that Salas failed to prove his allegation that Aguila
transferred the Waived Properties to third persons. The RTC emphasized that it
cannot go beyond the TCTs, which state that Salas is the registered owner of the
Discovered Properties. The RTC further held that Salas and Rubina were at fault for
failing to correct the TCTs, if they were not married as they claimed.

Hence, Salas filed an appeal with the CA.

The Ruling of the Court of Appeals

On 16 March 2012, the CA affirmed the order of the RTC.[15] The CA ruled that
Aguila’s statement in her petition is not a judicial admission. The CA pointed out
that the petition was filed on 7 October 2003, but Aguila found the Discovered
Properties only on 17 April 2007 or before the promulgation of the RTC decision.
Thus, the CA concluded that Aguila was palpably mistaken in her petition and it
would be unfair to punish her over a matter that she had no knowledge of at the
time she made the admission. The CA also ruled that Salas was not deprived of the
opportunity to refute Aguila’s allegations in her manifestation, even though he was
not present in its hearing. The CA likewise held that Rubina cannot collaterally
attack a certificate of title.
In a Resolution dated 28 June 2012,[16] the CA denied the Motion for
Reconsideration[17] filed by Salas. Hence, this petition.

The Issues

Salas seeks a reversal and raises the following issues for resolution:

1. The Court of Appeals erred in affirming the trial court’s decision ordering the
partition of the parcels of land covered by TCT Nos. N-259299-A and N-255497 in
Quezon City and as well as the property in Manila covered by TCT No. 243373
between petitioner and respondent.

2. The Court of Appeals erred in affirming the trial court’s decision in not allowing
Rubina C. Cortez to intervene in this case[18]

The Ruling of the Court

The petition lacks merit.

Since the original manifestation was an action for partition, this Court cannot order
a division of the property, unless it first makes a determination as to the existence
of a co-ownership.[19] Thus, the settlement of the issue of ownership is the first
stage in this action.[20]

Basic is the rule that the party making an allegation in a civil case has the burden
of proving it by a preponderance of evidence.[21] Salas alleged that contrary to
Aguila’s petition stating that they had no conjugal property, they actually acquired
the Waived Properties during their marriage. However, the RTC found, and the CA
affirmed, that Salas failed to prove the existence and acquisition of the Waived
Properties during their marriage:

A perusal of the record shows that the documents submitted by [Salas] as the
properties allegedly registered in the name of [Aguila] are merely photocopies and
not certified true copies, hence, this Court cannot admit the same as part of the
records of this case. These are the following:

(1) TCT No. T-65876 – a parcel of land located at Poblacion, Nasugbu, Batangas,
registered in the name of Eden A. Salas, married to Juan Salas Jr. which is
cancelled by TCT No. T-105443 in the name of Joan Jiselle A. Salas, single;

(2) TCT No. T-68066 – a parcel of land situated in the Barrio of Landing, Nasugbu,
Batangas, registered in the name of Eden A. Salas, married to Juan S. Salas Jr.
Moreover, [Aguila] submitted original copy of Certification issued by Ms. Erlinda A.
Dasal, Municipal Assessor of Nasugbu, Batangas, certifying that [Aguila] has no real
property (land and improvement) listed in the Assessment Roll for taxation
purposes, as of September 17, 2008. Such evidence, in the absence of proof to the
contrary, has the presumption of regularity. x x x.

Suffice it to say that such real properties are existing and registered in the name of
[Aguila], certified true copies thereof should have been the ones submitted to this
Court. Moreover, there is also a presumption that properties registered in the
Registry of Deeds are also declared in the Assessment Roll for taxation purposes.[22]

On the other hand, Aguila proved that the Discovered Properties were acquired by
Salas during their marriage. Both the RTC and the CA agreed that the Discovered
Properties registered in Salas’ name were acquired during his marriage with Aguila.
The TCTs of the Discovered Properties were entered on 2 July 1999 and 29
September 2003, or during the validity of Salas and Aguila’s marriage.
In Villanueva v. Court of Appeals,[23] we held that the question of whether the
properties were acquired during the marriage is a factual issue. Factual findings of
the RTC, particularly if affirmed by the CA, are binding on us, except under
compelling circumstances not present in this case.[24]

On Salas’ allegation that he was not accorded due process for failing to attend the
hearing of Aguila’s manifestation, we find the allegation untenable. The essence of
due process is opportunity to be heard. We hold that Salas was given such
opportunity when he filed his opposition to the manifestation, submitted evidence
and filed his appeal.

On both Salas and Rubina’s contention that Rubina owns the Discovered Properties,
we likewise find the contention unmeritorious. The TCTs state that “Juan S. Salas,
married to Rubina C. Salas” is the registered owner of the Discovered Properties. A
Torrens title is generally a conclusive evidence of the ownership of the land referred
to, because there is a strong presumption that it is valid and regularly issued.[25]The
phrase “married to” is merely descriptive of the civil status of the registered owner.
[26]
 Furthermore, Salas did not initially dispute the ownership of the Discovered
Properties in his opposition to the manifestation. It was only when Rubina
intervened that Salas supported Rubina’s statement that she owns the Discovered
Properties.

Considering that Rubina failed to prove her title or her legal interest in the
Discovered Properties, she has no right to intervene in this case. The Rules of Court
provide that only “a person who has a legal interest in the matter in litigation, or in
the success of either of the parties, or an interest against both, or is so situated as
to be adversely affected by a distribution or other disposition of property in the
custody of the court or of an officer thereof may, with leave of court, be allowed to
intervene in the action.”[27]

In Diño v. Diño,[28] we held that Article 147 of the Family Code applies to the union
of parties who are legally capacitated and not barred by any impediment to contract
marriage, but whose marriage is nonetheless declared void under Article 36 of the
Family Code, as in this case. Article 147 of the Family Code provides:

ART. 147. When a man and a woman who are capacitated to marry each other, live
exclusively with each other as husband and wife without the benefit of marriage or
under a void marriage, their wages and salaries shall be owned by them in equal
shares and the property acquired by both of them through their work or
industry shall be governed by the rules on co-ownership.

In the absence of proof to the contrary, properties acquired while they

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

Neither party can encumber or dispose by acts inter vivos of his or her share in the
property acquired during cohabitation and owned in common, without the consent
of the other, until after the termination of their cohabitation.

When only one of the parties to a void marriage is in good faith, the share of the
party in bad faith in the co-ownership shall be forfeited in favor of their common
children. In case of default of or waiver by any or all of the common children or
their descendants, each vacant share shall belong to the respective surviving
descendants. In the absence of descendants, such share shall belong to the
innocent party. In all cases, the forfeiture shall take place upon termination of the
cohabitation. (Emphasis supplied)

Under this property regime, property acquired during the marriage is prima
facie presumed to have been obtained through the couple’s joint efforts and
governed by the rules on co-ownership.[29] In the present case, Salas did not rebut
this presumption. In a similar case where the ground for nullity of marriage was
also psychological incapacity, we held that the properties acquired during the union
of the parties, as found by both the RTC and the CA, would be governed by co-
ownership.[30] Accordingly, the partition of the Discovered Properties as ordered by
the RTC and the CA should be sustained, but on the basis of co-ownership and not
on the regime of conjugal partnership of gains.

WHEREFORE, we DENY the petition. We AFFIRM the Decision dated 16 March

2012 and the Resolution dated 28 June 2012 of the Court of Appeals in CA-G.R. CV
No. 95322.

SO ORDERED.

Brion, Del Castillo, Perez, and Perlas-Bernabe, JJ., concur.

SECOND DIVISION
[ G.R. No. 202932, October 23, 2013 ]
EDILBERTO U. VENTURA, JR., PETITIONER, VS. SPOUSES
PAULINO AND EVANGELINE ABUDA, RESPONDENTS. 

DECISION

CARPIO, J.: 

The Case

This petition for review on certiorari seeks to annul the Decision[1] dated 9 March
2012 of the Court of Appeals (CA) in CA-G.R. CV No. 92330 and the
Resolution[2] dated 3 August 2012 denying the motion for reconsideration. The
Decision and Resolution dismissed the Appeal dated 23 October 2009 and affirmed
with modification the Decision[3] dated 24 November 2008 of the Regional Trial
Court of Manila, Branch 32 (RTC Manila).

The Facts

The RTC-Manila and the CA found the facts to be as follows:

Socorro Torres (Socorro) and Esteban Abletes (Esteban) were married on 9 June
1980. Although Socorro and Esteban never had common children, both of them had
children from prior marriages: Esteban had a daughter named Evangeline Abuda
(Evangeline), and Socorro had a son, who was the father of Edilberto U. Ventura,
Jr. (Edilberto), the petitioner in this case.
Evidence shows that Socorro had a prior subsisting marriage to Crispin Roxas
(Crispin) when she married Esteban. Socorro married Crispin on 18 April 1952. This
marriage was not annulled, and Crispin was alive at the time of Socorro’s marriage
to Esteban.

Esteban’s prior marriage, on the other hand, was dissolved by virtue of his wife’s
death in 1960.

According to Edilberto, sometime in 1968, Esteban purchased a portion of a lot

situated at 2492 State Alley, Bonifacio Street, Vitas, Tondo, Manila (Vitas property).
The remaining portion was thereafter purchased by Evangeline on her father’s
behalf sometime in 1970.[4] The Vitas property was covered by Transfer Certificate
of Title No. 141782, dated 11 December 1980, issued to “Esteban Abletes, of legal
age, Filipino, married to Socorro Torres.”[5]

Edilberto also claimed that starting 1978, Evangeline and Esteban operated small
business establishments located at 903 and 905 Delpan Street, Tondo, Manila
(Delpan property).[6]

On 6 September 1997, Esteban sold the Vitas and Delpan properties to Evangeline
and her husband, Paulino Abuda (Paulino).[7] According to Edilberto:

[w]hen Esteban was diagnosed with colon cancer sometime in 1993, he decided to
sell the Delpan and Vitas properties to Evangeline. Evangeline continued paying the
amortizations on the two (2) properties situated in Delpan Street. The
amortizations, together with the amount of Two Hundred Thousand Pesos (Php
200,000.00), which Esteban requested as advance payment, were considered part
of the purchase price of the Delpan properties. Evangeline likewise gave her father
Fifty Thousand Pesos (Php 50,000.00) for the purchase of the Vitas properties and
[she] shouldered his medical expenses.[8]

Esteban passed away on 11 September 1997, while Socorro passed away on 31

July 1999.

Sometime in 2000, Leonora Urquila (Leonora), the mother of Edilberto, discovered

the sale. Thus, Edilberto, represented by Leonora, filed a Petition for Annulment of
Deeds of Sale before the RTC-Manila. Edilberto alleged that the sale of the
properties was fraudulent because Esteban’s signature on the deeds of sale was
forged. Respondents, on the other hand, argued that because of Socorro’s prior
marriage to Crispin, her subsequent marriage to Esteban was null and void. Thus,
neither Socorro nor her heirs can claim any right or interest over the properties
purchased by Esteban and respondents.[9]

The Ruling of the RTC-Manila

The RTC-Manila dismissed the petition for lack of merit.

The RTC-Manila ruled that the marriage between Socorro and Esteban was void
from the beginning.[10] Article 83 of the Civil Code, which was the governing law at
the time Esteban and Socorro were married, provides:

Art. 83. Any marriage subsequently contracted by any person during the lifetime of
the first spouse of such person shall be illegal and void from its performance
unless:

1. The first marriage was annulled or dissolved; or

2. The first spouse had been absent for seven consecutive years at the time of the
second marriage without the spouse present having news of the absentee being
alive, or if the absentee, though he has been absent for less than seven years, is
generally considered as dead and believed to be so by the spouse present at the
time of contracting such subsequent marriage, or if the absentee is presumed dead
according to articles 390 and 391. The marriage so contracted shall be valid in any
of the three cases until declared null and void.

During trial, Edilberto offered the testimony of Socorro’s daughter- in-law Conchita
Ventura (Conchita). In her first affidavit, Conchita claimed that Crispin, who was a
seaman, had been missing and unheard from for 35 years. However, Conchita
recanted her earlier testimony and executed an Affidavit of Retraction.[11]

The RTC-Manila ruled that the lack of a judicial decree of nullity does not affect the
status of the union. It applied our ruling in Niñal v. Badayog:[12]

Jurisprudence under the Civil Code states that no judicial decree is necessary in
order to establish the nullity of a marriage. x x x

Under ordinary circumstances, the effect of a void marriage, so far as concerns the
conferring of legal rights upon the parties, is as though no marriage had ever taken
place. And therefore, being good for no legal purpose, its invalidity can be
maintained in any proceeding in which [the] fact of marriage may be material,
either direct or collateral, in any civil court between any parties at any time,
whether before or after the death of either or both the husband and the wife, and
upon mere proof of the facts rendering such marriage void, it will be disregarded or
treated as non- existent by the courts.[13]

According to the RTC-Manila, the Vitas and Delpan properties are not conjugal, and
are governed by Articles 144 and 485 of the Civil Code, to wit:

Art. 144. When a man and a woman live together as husband and wife, but they
are not married, or their marriage is void from the beginning, the property acquired
by either or both of them through their work or industry or their wages and salaries
shall be governed by the rules on co-ownership.

Art. 485. The share of the co-owners, in the benefits as well as in the charges, shall
be proportional to their respective interests. Any stipulation in a contract to the
contrary shall be void.

The portions belonging to the co-owners in the co-ownership shall be presumed

equal, unless the contrary is proved.

The RTC-Manila then determined the respective shares of Socorro and Esteban in
the properties. It found that:

[w]ith respect to the property located at 2492 State Alley, Bonifacio St. Vitas,
Tondo, Manila covered by TCT No. 141782, formerly Marcos Road, Magsaysay
Village, Tondo, Manila, [Evangeline] declared that part of it was first acquired by
[her] father Esteban Abletes sometime in 1968 when he purchased the right of
Ampiano Caballegan. Then, in 1970, she x x x bought the right to one-half of the
remaining property occupied by Ampiano Caballegan. However, during the survey
of the National Housing Authority, she allowed the whole lot [to be] registered in
her father’s name. As proof thereof, she presented Exhibits “8” to “11” x x x.
[These documents prove that] that she has been an occupant of the said property
in Vitas, Tondo even before her father and Socorro Torres got married in June,
1980.[14]

Anent the parcels of land and improvements thereon 903 and 905 Del Pan Street,
Tondo, Manila, x x x Evangeline professed that in 1978, before [her] father met
Socorro Torres and before the construction of the BLISS Project thereat, [her]
father [already had] a bodega of canvas (lona) and a sewing machine to sew the
canvas being sold at 903 Del Pan Street, Tondo Manila. In 1978, she was also
operating Vangie’s Canvas Store at 905 Del Pan [Street], Tondo, Manila, which was
evidenced by Certificate of Registration of Business Name issued in her favor on 09
November 1998 x x x. When the BLISS project was constructed in 1980, [the
property] became known as Unit[s] D-9 and D-10. At first, [her] father [paid] for
the amortizations [for] these two (2) parcels of land but when he got sick [with]
colon cancer in 1993, he asked [respondents] to continue paying for the
amortizations x x x. [Evangeline] paid a total of P195,259.52 for Unit D-9 as shown
by the 37 pieces of receipts x x x and the aggregate amount of P188,596.09 for
Unit D-10, [as evidenced by] 36 receipts x x x.[15]

The RTC-Manila concluded that Socorro did not contribute any funds for the
acquisition of the properties. Hence, she cannot be considered a co- owner, and her
heirs cannot claim any rights over the Vitas and Delpan properties.[16]

Aggrieved, Edilberto filed an appeal before the CA.

The Ruling of the CA

In its Decision[17] dated 9 March 2012, the CA sustained the decision of the RTC-
Manila. The dispositive portion of the CA Decision reads:

WHEREFORE, the Appeal is hereby DENIED and the challenged Decision of the
court a quo STANDS.

SO ORDERED.[18]

The CA ruled, however, that the RTC-Manila should have applied Article 148 of the
Family Code, and not Articles 144 and 485 of the Civil Code. Article 148 of the
Family Code states that in unions between a man and a woman who are
incapacitated to marry each other:

x x x only the properties acquired by both of the parties through their actual joint
contribution of money, property, or industry shall be owned by them in common in
proportion to their respective contributions. In the absence of proof to the contrary,
their contributions and corresponding shares are presumed to be equal. The same
rule and presumption shall apply to joint deposits of money and evidences of credit.

If one of the parties is validly married to another, his or her share in the co-
ownership shall accrue to the absolute community or conjugal partnership existing
in such valid marriage. If the party who acted in bad faith is not validly married to
another, his or her share shall be forfeited in the manner provided in the last
paragraph of the preceding Article.

The foregoing rules on forfeiture shall likewise apply even if both parties are in bad
faith.

The CA applied our ruling in Saguid v. Court of Appeals,[19] and held that the
foregoing provision applies “even if the cohabitation or the acquisition of the
property occurred before the [effectivity] of the Family Code.”[20] The CA found that
Edilberto failed to prove that Socorro contributed to the purchase of the Vitas and
Delpan properties. Edilberto was unable to provide any documentation evidencing
Socorro’s alleged contribution.[21]

On 2 April 2012, Edilberto filed a Motion for Reconsideration,[22] which was denied

by the CA in its Resolution dated 3 August 2012.[23]

Hence, this petition.

The Ruling of this Court

We deny the petition.

Edilberto admitted that in unions between a man and a woman who are
incapacitated to marry each other, the ownership over the properties acquired
during the subsistence of that relationship shall be based on the actual contribution
of the parties. He even quoted our ruling in Borromeo v. Descallar[24] in his petition:

It is necessary for each of the partners to prove his or her actual contribution to the
acquisition of property in order to be able to lay claim to any portion of it.
Presumptions of co-ownership and equal contribution do not apply.[25]

This is a reiteration of Article 148 of the Family Code, which the CA applied in the
assailed decision:

Art 148. In cases of cohabitation [wherein the parties are incapacitated to marry
each other], only the properties acquired by both of the parties through their actual
joint contribution of money, property, or industry shall be owned by them in
common in proportion to their respective contributions. In the absence of proof to
the contrary, their contributions and corresponding shares are presumed to be
equal. The same rule and presumption shall apply to joint deposits of money and
evidences of credit.

If one of the parties is validly married to another, his or her share in the co-
ownership shall accrue to the absolute community or conjugal partnership existing
in such valid marriage. If the party who acted in bad faith is not validly married to
another, his or her share shall be forfeited in the manner provided in the last
paragraph of the preceding Article.

The foregoing rules on forfeiture shall likewise apply even if both parties are in bad
faith.
Applying the foregoing provision, the Vitas and Delpan properties can be considered
common property if: (1) these were acquired during the cohabitation of Esteban
and Socorro; and (2) there is evidence that the properties were acquired through
the parties’ actual joint contribution of money, property, or industry.

Edilberto argues that the certificate of title covering the Vitas property shows that
the parcel of land is co-owned by Esteban and Socorro because: (1) the Transfer
Certificate of Title was issued on 11 December 1980, or several months after the
parties were married; and (2) title to the land was issued to “Esteban Abletes, of
legal age, married to Socorro Torres.”[26]

We disagree. The title itself shows that the Vitas property is owned by Esteban
alone. The phrase “married to Socorro Torres” is merely descriptive of his civil
status, and does not show that Socorro co-owned the property.[27] The evidence on
record also shows that Esteban acquired ownership over the Vitas property prior to
his marriage to Socorro, even if the certificate of title was issued after the
celebration of the marriage. Registration under the Torrens title system merely
confirms, and does not vest title. This was admitted by Edilberto on page 9 of his
petition wherein he quotes an excerpt of our ruling in Borromeo:

[R]egistration is not a mode of acquiring ownership. It is only a means of

confirming the fact of its existence with notice to the world at large. Certificates of
title are not a source of right. The mere possession of a title does not make one the
true owner of the property. Thus, the mere fact that respondent has the titles of
the disputed properties in her name does not necessarily, conclusively and
absolutely make her the owner. The rule on indefeasibility of title likewise does not
apply to respondent. A certificate of title implies that the title is quiet, and that it is
perfect, absolute and indefeasible. However, there are well-defined exceptions to
this rule, as when the transferee is not a holder in good faith and did not acquire
the subject properties for a valuable consideration.

Edilberto claims that Esteban's actual contribution to the purchase of the Delpan
property was not sufficiently proven since Evangeline shouldered some of the
amortizations.[28]  Thus, the law presumes that Esteban and Socorro jointly
contributed to the acquisition of the Del pan property.

We cannot sustain Edilberto's claim. Both the RTC-Manila and the CA found that the
Delpan property was acquired prior to the marriage of Esteban and Socorro.
[29]
 Furthermore, even if payment of the purchase price of the Delpan property was
made by Evangeline, such payment was made on behalf of her father. Article 1238
of the Civil Code provides:
Art. 1238. Payment made by a third person who does not intend to be reimbursed
by the debtor is deemed to be a donation, which requires the debtor's consent. But
the payment is in any case valid as to the creditor who has accepted it.

Thus, it is clear that Evangeline paid on behalf of her father, and the parties
intended that the Delpan property would be owned by and registered under the
name of Esteban.

During trial, the Abuda spouses  presented receipts evidencing payments of the
amortizations for the Delpan property. On the other hand, Edilberto failed to show
any evidence showing Socorro's alleged monetary contributions. As correctly
pointed out by the CA:

[s]ettled is the rule that in civil cases x x x the burden of proof rests upon the party
who, as determined by the pleadings or the nature of the case, asserts the
affirmative of an issue. x x x. Here it is Appellant who is duty bound to prove the
allegations in the complaint which undoubtedly, he miserably failed to do so.[30]

WHEREFORE, the petition is DENIED. The Decision dated 9 March 2012 of the
Court of Appeals in CA-G.R. CV No. 92330 is AFFIRMED.

SO ORDERED.

Velasco, Jr.,. Brion, Reyes,  and Perlas-Bernabe, JJ., concur.

SECOND DIVISION
[ G.R. No. 195670, December 03, 2012 ]
WILLEM BEUMER, PETITIONER, VS. AVELINA AMORES,
RESPONDENT.

DECISION
PERLAS-BERNABE, J.: 

Before the Court is a Petition for Review on Certiorari[1] under Rule 45 of the Rules
of Court assailing the October 8, 2009 Decision[2] and January 24, 2011
Resolution[3] of the Court of Appeals (CA) in CA-G.R. CV No. 01940, which affirmed
the February 28, 2007 Decision[4] of the Regional Trial Court (RTC) of Negros
Oriental, Branch 34 in Civil Case No. 12884. The foregoing rulings dissolved the
conjugal partnership of gains of Willem Beumer (petitioner) and Avelina Amores
(respondent) and distributed the properties forming part of the said property
regime.

The Factual Antecedents

Petitioner, a Dutch National, and respondent, a Filipina, married in March 29, 1980.
After several years, the RTC of Negros Oriental, Branch 32, declared the nullity of
their marriage in the Decision[5] dated November 10, 2000 on the basis of the
former’s psychological incapacity as contemplated in Article 36 of the Family Code.

Consequently, petitioner filed a Petition for Dissolution of Conjugal

Partnership[6] dated December 14, 2000 praying for the distribution of the following
described properties claimed to have been acquired during the subsistence of their
marriage, to wit:

By Purchase:

a. Lot 1, Block 3 of the consolidated survey of Lots 2144 & 2147 of the
Dumaguete Cadastre, covered by Transfer Certificate of Title (TCT) No.
22846, containing an area of 252 square meters (sq.m.), including a
residential house constructed thereon.

b. Lot 2142 of the Dumaguete Cadastre, covered by TCT No. 21974, containing
an area of 806 sq.m., including a residential house constructed thereon.

c. Lot 5845 of the Dumaguete Cadastre, covered by TCT No. 21306, containing
an area of 756 sq.m.

d. Lot 4, Block 4 of the consolidated survey of Lots 2144 & 2147 of the
Dumaguete Cadastre, covered by TCT No. 21307, containing an area of 45
sq.m.

By way of inheritance:

e. 1/7 of Lot 2055-A of the Dumaguete Cadastre, covered by TCT No. 23567,
containing an area of 2,635 sq.m. (the area that appertains to the conjugal
partnership is 376.45 sq.m.).
 f. 1/15 of Lot 2055-I of the Dumaguete Cadastre, covered by TCT No. 23575,
containing an area of 360 sq.m. (the area that appertains to the conjugal
partnership is 24 sq.m.).[7]

In defense,[8] respondent averred that, with the exception of their two (2)

residential houses on Lots 1 and 2142, she and petitioner did not acquire any
conjugal properties during their marriage, the truth being that she used her own
personal money to purchase Lots 1, 2142, 5845 and 4 out of her personal funds
and Lots 2055-A and 2055-I by way of inheritance.[9] She submitted a joint affidavit
executed by her and petitioner attesting to the fact that she purchased Lot 2142
and the improvements thereon using her own money.[10] Accordingly, respondent
sought the dismissal of the petition for dissolution as well as payment for attorney’s
fees and litigation expenses.[11]

During trial, petitioner testified that while Lots 1, 2142, 5845 and 4 were registered
in the name of respondent, these properties were acquired with the money he
received from the Dutch government as his disability benefit[12] since respondent did
not have sufficient income to pay for their acquisition. He also claimed that the joint
affidavit they submitted before the Register of Deeds of Dumaguete City was
contrary to Article 89 of the Family Code, hence, invalid. [13]

For her part, respondent maintained that the money used for the purchase of the
lots came exclusively from her personal funds, in particular, her earnings from
selling jewelry as well as products from Avon, Triumph and Tupperware.[14] She
further asserted that after she filed for annulment of their marriage in 1996,
petitioner transferred to their second house and brought along with him certain
personal properties, consisting of drills, a welding machine, grinders, clamps, etc.
She alleged that these tools and equipment have a total cost of P500,000.00.[15]

The RTC Ruling

On February 28, 2007, the RTC of Negros Oriental, Branch 34 rendered its Decision,
dissolving the parties’ conjugal partnership, awarding all the parcels of land to
respondent as her paraphernal properties; the tools and equipment in favor of
petitioner as his exclusive properties; the two (2) houses standing on Lots 1 and
2142 as co-owned by the parties, the dispositive of which reads:

WHEREFORE, judgment is hereby rendered granting the dissolution of the conjugal

partnership of gains between petitioner Willem Beumer and [respondent] Avelina
Amores considering the fact that their marriage was previously annulled by Branch
32 of this Court. The parcels of land covered by Transfer Certificate of Titles Nos.
22846, 21974, 21306, 21307, 23567 and 23575 are hereby declared paraphernal
properties of respondent Avelina Amores due to the fact that while these real
properties were acquired by onerous title during their marital union, Willem
Beumer, being a foreigner, is not allowed by law to acquire any private land in the
Philippines, except through inheritance.
The personal properties, i.e., tools and equipment mentioned in the complaint
which were brought out by Willem from the conjugal dwelling are hereby declared
to be exclusively owned by the petitioner.

The two houses standing on the lots covered by Transfer Certificate of Title Nos.
21974 and 22846 are hereby declared to be co-owned by the petitioner and the
respondent since these were acquired during their marital union and since there is
no prohibition on foreigners from owning buildings and residential units. Petitioner
and respondent are, thereby, directed to subject this court for approval their
project of partition on the two house[s] aforementioned.

The Court finds no sufficient justification to award the counterclaim of respondent

for attorney’s fees considering the well settled doctrine that there should be no
premium on the right to litigate. The prayer for moral damages are likewise denied
for lack of merit.

No pronouncement as to costs.

SO ORDERED.[16]

It ruled that, regardless of the source of funds for the acquisition of Lots 1, 2142,
5845 and 4, petitioner could not have acquired any right whatsoever over these
properties as petitioner still attempted to acquire them notwithstanding his
knowledge of the constitutional prohibition against foreign ownership of private
lands.[17] This was made evident by the sworn statements petitioner executed
purporting to show that the subject parcels of land were purchased from the
exclusive funds of his wife, the herein respondent.[18] Petitioner’s plea for
reimbursement for the amount he had paid to purchase the foregoing properties on
the basis of equity was likewise denied for not having come to court with clean
hands.

The CA Ruling

Petitioner elevated the matter to the CA, contesting only the RTC’s award of Lots 1,
2142, 5845 and 4 in favor of respondent. He insisted that the money used to
purchase the foregoing properties came from his own capital funds and that they
were registered in the name of his former wife only because of the constitutional
prohibition against foreign ownership. Thus, he prayed for reimbursement of one-
half (1/2) of the value of what he had paid in the purchase of the said properties,
waiving the other half in favor of his estranged ex-wife.[19]

On October 8, 2009, the CA promulgated a Decision[20] affirming in toto the

judgment rendered by the RTC of Negros Oriental, Branch 34. The CA stressed the
fact that petitioner was “well-aware of the constitutional prohibition for aliens to
acquire lands in the Philippines.”[21]  Hence, he cannot invoke equity to support his
claim for reimbursement.
Consequently, petitioner filed the instant Petition for Review on Certiorari assailing
the CA Decision due to the following error:

UNDER THE FACTS ESTABLISHED, THE COURT ERRED IN NOT SUSTAINING

THE PETITIONER’S ATTEMPT AT SUBSEQUENTLY ASSERTING OR CLAIMING
A RIGHT OF HALF OR WHOLE OF THE PURCHASE PRICE USED IN THE
PURCHASE OF THE REAL PROPERTIES SUBJECT OF THIS CASE.[22] (Emphasis
supplied)

The Ruling of the Court

The petition lacks merit.

The issue to be resolved is not of first impression. In In Re: Petition For Separation
of Property-Elena Buenaventura Muller v. Helmut Muller [23] the Court had already
denied a claim for reimbursement of the value of purchased parcels of Philippine
land instituted by a foreigner Helmut Muller, against his former Filipina spouse,
Elena Buenaventura Muller. It held that Helmut Muller cannot seek reimbursement
on the ground of equity where it is clear that he willingly and knowingly bought the
property despite the prohibition against foreign ownership of Philippine
land[24] enshrined under Section 7, Article XII of the 1987 Philippine Constitution
which reads:

Section 7.  Save in cases of hereditary succession, no private lands shall be

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

Undeniably, petitioner openly admitted that he “is well aware of the [above-cited]
constitutional prohibition”[25] and even asseverated that, because of such
prohibition, he and respondent registered the subject properties in the latter’s
name.[26] Clearly, petitioner’s actuations showed his palpable intent to skirt the
constitutional prohibition. On the basis of such admission, the Court finds no reason
why it should not apply the Muller ruling and accordingly, deny petitioner’s claim for
reimbursement.

As also explained in Muller, the time-honored principle is that he who seeks equity
must do equity, and he who comes into equity must come with clean hands.
Conversely stated, he who has done inequity shall not be accorded equity. Thus, a
litigant may be denied relief by a court of equity on the ground that his conduct has
been inequitable, unfair and dishonest, or fraudulent, or deceitful. [27]

In this case, petitioner’s statements regarding the real source of the funds used to
purchase the subject parcels of land dilute the veracity of his claims: While
admitting to have previously executed a joint affidavit that respondent’s personal
funds were used to purchase Lot 1,[28] he likewise claimed that his personal
disability funds were used to acquire the same. Evidently, these inconsistencies
show his untruthfulness. Thus, as petitioner has come before the Court with
unclean hands, he is now precluded from seeking any equitable refuge.
In any event, the Court cannot, even on the grounds of equity, grant
reimbursement to petitioner given that he acquired no right whatsoever over the
subject properties by virtue of its unconstitutional purchase. It is well-established
that equity as a rule will follow the law and will not permit that to be done indirectly
which, because of public policy, cannot be done directly.[29] Surely, a contract that
violates the Constitution and the law is null and void, vests no rights, creates no
obligations and produces no legal effect at all.[30] Corollary thereto, under Article
1412 of the Civil Code,[31]  petitioner cannot have the subject properties deeded to
him or allow him to recover the money he had spent for the purchase thereof. The
law will not aid either party to an illegal contract or agreement; it leaves the parties
where it finds them.[32] Indeed, one cannot salvage any rights from an
unconstitutional transaction knowingly entered into.

Neither can the Court grant petitioner’s claim for reimbursement on the basis of
unjust enrichment.[33] As held in Frenzel v. Catito, a case also involving a foreigner
seeking monetary reimbursement for money spent on purchase of Philippine land,
the provision on unjust enrichment does not apply if the action is proscribed by the
Constitution, to wit:

Futile, too, is petitioner's reliance on Article 22 of the New Civil Code which reads:

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.

The provision is expressed in the maxim: "MEMO CUM ALTERIUS DETER

DETREMENTO PROTEST" (No person should unjustly enrich himself at the expense
of another). An action for recovery of what has been paid without just cause has
been designated as an accion in rem verso. This provision does not apply if, as in
this case, the action is proscribed by the Constitution or by the application of the
pari delicto doctrine. It may be unfair and unjust to bar the petitioner from filing
an accion in rem verso over the subject properties, or from recovering the money
he paid for the said properties, but, as Lord Mansfield stated in the early case
of Holman v. Johnson: "The objection that a contract is immoral or illegal as
between the plaintiff and the defendant, sounds at all times very ill in the mouth of
the defendant. It is not for his sake, however, that the objection is ever allowed;
but it is founded in general principles of policy, which the defendant has the
advantage of, contrary to the real justice, as between him and the
plaintiff."[34] (Citations omitted)

Nor would the denial of his claim amount to an injustice based on his foreign
citizenship.[35] Precisely, it is the Constitution itself which demarcates the rights of
citizens and non-citizens in owning Philippine land. To be sure, the constitutional
ban against foreigners applies only to ownership of Philippine land and not to the
improvements built thereon, such as the two (2) houses standing on Lots 1 and
2142 which were properly declared to be co-owned by the parties subject to
partition. Needless to state, the purpose of the prohibition is to conserve the
national patrimony[36] and it is this policy which the Court is duty-bound to protect.

WHEREFORE, the petition is DENIED. Accordingly, the assailed October 8, 2009

Decision and January 24, 2011 Resolution of the Court of Appeals in CA-G.R. CV
No. 01940 are AFFIRMED.

SO ORDERED.

Carpio, (Chairperson), Brion, Del Castillo, and Perez, JJ., concur.

THIRD DIVISION
[ G.R. No. 198908, August 03, 2015 ]
VIRGINIA OCAMPO, PETITIONER, VS. DEOGRACIO OCAMPO,
RESPONDENT.

DECISION

PERALTA, J.: 

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court

seeking the reversal of the Decision[1] dated August 11, 2010 and Resolution[2] 
dated October 5, 2011, respectively, of the Court of Appeals (CA) in CA-G.R. CV No.
82318, which denied the petitioner's appeal and motion for reconsideration.

The facts of the case, as culled from the records, are as follows:

On September 10, 1990, petitioner Virginia Sy Ocampo (Virginia) filed a Petition for
Declaration of Nullity of her Marriage with Deogracio Ocampo (Deogracio) before
Regional Trial Court of Quezon City, Branch 87, on the ground of psychological
incapacity, docketed as Civil Case No. Q-90-6616.[3]

On January 22, 1993, the trial court rendered a Decision[4] declaring the marriage
between Virginia and Deogracio as null and void, the dispositive  portion of which
reads:

WHEREFORE, the petition is hereby GRANTED. The marriage between the petitioner
and the respondent is hereby declared null and void from the beginning under
Article 36 of the Family Code. The status of their children, however, shall remain
legitimate and their custody is hereby awarded to the petitioner.

As to the couple's property relations, their conjugal partnership of gains shall

necessarily be dissolved and liquidated but since the petitioner has not submitted
any detailed and formal listing or inventory of such property, the court cannot act
now on the liquidation aspect. The parties are given thirty (30) days to submit an
inventory of their conjugal partnership for the purpose of liquidation.

IT IS SO ORDERED.[5]

The decision became final, since no party appealed the judgment annulling the
marriage.

On March 31, 1999, the trial court directed the parties to submit a project of
partition of their inventoried properties, and if they failed to do so, a hearing will be
held on the factual issues with regard to said properties. Having failed to agree on a
project of partition of their conjugal properties, hearing ensued where the parties
adduced evidence in support of their respective stand.

On January 13, 2004, the trial court rendered the assailed Order[6] stating that the
properties declared by the parties belong to each one of them on a 50-50 sharing.

On February 2, 2004, Virginia filed a Notice of Appeal before the trial court.

On February 13, 2004, Deogracio filed a Motion to Deny and/or Dismiss the Notice
of Appeal and for immediate execution pursuant to Section 20 of A.M. No. 02-1-10.

On February 20, 2004, the trial court denied the aforesaid motion to deny and/or
dismiss the notice of appeal for lack of merit.

On March 4, 2004, Deogracio filed a Motion for Reconsideration. On March 22,

2004, the trial court denied anew the motion for reconsideration.

In the disputed Decision dated August 11, 2010, the Court of Appeals denied
Virginia's appeal. Virginia moved for reconsideration, but was denied  in a
Resolution dated October 5, 2011.

Thus, the instant petition for review substantially questioning whether respondent
should be deprived of his share in the conjugal partnership of gains by reason of
bad faith and psychological perversity.

The petition lacks merit.

While Virginia and Deogracio tied the marital knot on January 16, 1978, it is still the
Family Code provisions on conjugal partnerships, however, which will govern the
property relations between Deogracio and Virginia even if they were married before
the effectivity of the Family Code.

Article 105 of the Family Code explicitly mandates that the Family Code shall apply
to conjugal partnerships established before the Family Code without prejudice to
vested rights already acquired under the Civil Code or other laws. Thus, under the
Family Code, if the properties are acquired during the marriage, the presumption is
that they are conjugal. Hence, the burden of proof is on the party claiming that
they are not conjugal. This is counter-balanced by the requirement that the
properties must first be proven to have been acquired during the marriage before
they are presumed conjugal.[7]

The applicable law, however, in so far as the liquidation of the conjugal partnership
assets and liability is concerned, is Article 129[8] of the Family Code in relation to
Article 147 of the Family Code.[9]

The Court held that in a void marriage, as in those declared void under Article
36[10] of the Family Code, the property relations of the parties during the period of
cohabitation is governed either by Article 147 or Article 148 of the Family Code.
[11]
 Article 147 of the Family Code applies to union of parties who are legally
capacitated and not barred by any impediment to contract marriage, but whose
marriage is nonetheless void, as in this case. Article 147 of the Family Code
provides:

Article 147. When a man and a woman who are capacitated to marry each other,
live exclusively with each other as husband and wife without the benefit of marriage
or under a void marriage, their wages and salaries shall be owned by them in equal
shares and the property acquired by both of them through their work or industry
shall be governed by the rules on co-ownership.

In the absence of proof to the contrary, properties acquired while they

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

Neither party can encumber or dispose by acts inter vivos of his or her share in the
property acquired during cohabitation and owned in common, without the consent
of the other, until after the termination of their cohabitation.

When only one of the parties to a void marriage is in good faith, the share of the
party in bad faith in the co-ownership shall be forfeited in favor of their common
children. In case of default of or waiver by any or all of the common children or
their descendants, each vacant share shall belong to the respective surviving
descendants. In the absence of descendants, such share shall belong to the
innocent party. In all cases, the forfeiture shall take place upon termination of the
cohabitation.[12]

This particular kind of co-ownership applies when a man and a woman, suffering no
illegal impediment to marry each other, exclusively live together as husband and
wife under a void marriage or without the benefit of marriage. It is clear, therefore,
that for Article 147 to operate, the man and the woman: (1) must be capacitated to
marry each other; (2) live exclusively with each other as husband and wife; and (3)
their union is without the benefit of marriage or their marriage is void, as in the
instant case. The term "capacitated" in the first paragraph of the provision pertains
to the legal capacity of a party to contract marriage. Any impediment to marry has
not been shown to have existed on the part of either Virginia or Deogracio. They
lived exclusively with each other as husband and wife. However, their marriage was
found to be void under Article 36 of the Family Code on the ground of psychological
incapacity.[13]

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

Citing Valdes v. RTC,[15] the Court held that the court a quo did not commit a
reversible error in utilizing Article 147 of the Family Code and in ruling that the
former spouses own the family home and all their common property in equal
shares, as well as in concluding that, in the liquidation and partition of the property
that they owned in common, the provisions on co-ownership under the Civil Code
should aptly prevail. The rules which are set up to govern the liquidation of either
the absolute community or the conjugal partnership of gains, the property regimes
recognized for valid and voidable marriages, are irrelevant to the liquidation of the
co-ownership that exists between common-law spouses or spouses of void
marriages.

Thus, the trial court and the appellate court correctly held that the parties will share
on equal shares considering that Virginia failed to prove that the properties were
acquired solely on her own efforts, to wit:

This Court keenly observes that only testimonial evidence was presented by the
parties respectively, to prove and dispute the claim of the other with regard to the
properties and assets acquired during the marriage. In the absence, therefore, of
any documentary evidence to prove the contrary, all the properties acquired by the
spouses during the marriage are presumed conjugal. Further, the testimonial
evidence adduced by the petitioner aimed at establishing that respondent took no
part in acquiring said properties failed to convince this Court that the latter be given
only a meager share thereof.

While it may be true that management of the businesses referred to herein may
have been actively undertaken by the petitioner, it cannot be gainsaid that
petitioner was able to do so without the invaluable help of respondent. Even a plain
housewife who stays all the time in the house and take[s] care of the household
while the husband indulges in lucrative and gainful activities is entitled to a share in
the same proportion the husband is, to the property  or properties acquired by the
marriage. In the same breadth, respondent must be considered to be entitled to the
same extent. Petitioner's claim that the seed money in that business was provided
by her mother and that, had it not been for that reason, the properties now subject
of controversy could not have been acquired. That may be true but the Court is not
prone to believe so because of insufficient evidence to prove such contention but
petitioner's self-serving allegations. Of course, attempts to establish respondent as
an irresponsible and unfaithful husband, as well as family man were made but the
testimonies adduced towards that end, failed to fully convince the Court that
respondent should be punished by depriving him of his share of the conjugal
property because of his indiscretion.[16]

In the instant case, both the trial and appellate courts agreed that the subject
properties were in fact acquired during the marriage of Virginia and Deogracio. We
give due deference to factual findings of trial courts, especially when affirmed by
the appellate court, as in this case. A reversal of this finding can only occur if
petitioners show sufficient reason for us to doubt its correctness. There is none, in
this case.

Likewise, we note that the former spouses both substantially agree that they
acquired the subject properties during the subsistence of their marriage.[17]  The
certificates of titles and tax declarations are not sufficient proof to overcome the
presumption under Article 116 of the Family Code. All properties acquired by the
spouses during the marriage, regardless in whose name the properties are
registered, are presumed conjugal unless proved otherwise. The presumption is not
rebutted by the mere fact that the certificate of title of the property or the tax
declaration is in the name of one of the spouses only. Article 116 expressly provides
that the presumption remains even if the property is "registered in the name of one
or both of the spouses."[18]  Thus, the failure of Virginia to rebut this presumption,
said properties were obtained by the spouses' joint efforts, work or industry, and
shall be jointly owned by them in equal shares.  Accordingly, the partition of the
former spouses' properties on the basis of co-ownership, as ordered by the RTC and
the appellate court, should be affirmed, and not on the regime of conjugal
partnership of gains.

WHEREFORE, the petition is DENIED. The Decision dated August 11, 2010 and
the Resolution dated October 5, 2011 of the Court of Appeals in CA-G.R. CV No.
82318 are AFFIRMED. The case is REMANDED to the trial court for proper
disposition.

SO ORDERED.

Velasco, Jr., (Chairperson), Villarama, Jr., Perez,* and Jardeleza, JJ., concur.

SECOND DIVISION
[ G.R. No. 116668, July 28, 1997 ]
ERLINDA A. AGAPAY, PETITIONER, VS. CARLINA (CORNELIA)
V. PALANG AND HERMINIA P. DELA CRUZ, RESPONDENTS. 

DECISION

ROMERO, J.: 
Before us is a petition for review of the decision of the Court of Appeals in CA-G.R.
CV No. 24199 entitled “Erlinda Agapay v. Carlina (Cornelia) Palang and Herminia P.
Dela Cruz” dated June 22, 1994 involving the ownership of two parcels of land
acquired during the cohabitation of petitioner and private respondent’s legitimate
spouse.

Miguel Palang contracted his first marriage on July 16, 1949 when he took private
respondent Carlina (or Cornelia) Vallesterol as a wife at the Pozorrubio Roman
Catholic Church in Pangasinan. A few months after the wedding, in October 1949,
he left to work in Hawaii. Miguel and Carlina’s only child, Herminia Palang, was born
on May 12, 1950.

Miguel returned in 1954 for a year. His next visit to the Philippines was in 1964 and
during the entire duration of his year-long sojourn he stayed in Zambales with his
brother, not in Pangasinan with his wife and child. The trial court found evidence
that as early as 1957, Miguel had attempted to divorce Carlina in Hawaii.[1] When
he returned for good in 1972, he refused to live with private respondents, but
stayed alone in a house in Pozorrubio, Pangasinan.

On July 15, 1973, the then sixty-three-year-old Miguel contracted his second
marriage with nineteen-year-old Erlinda Agapay, herein petitioner.[2] Two months
earlier, on May 17, 1973, Miguel and Erlinda, as evidenced by the Deed of Sale,
jointly purchased a parcel of agricultural land located at San Felipe, Binalonan,
Pangasinan with an area of 10,080 square meters. Consequently, Transfer
Certificate of Title No. 101736 covering said rice land was issued in their names.

A house and lot in Binalonan, Pangasinan was likewise purchased on September 23,
1975, allegedly by Erlinda as the sole vendee. TCT No. 143120 covering said
property was later issued in her name.

On October 30, 1975, Miguel and Cornelia Palang executed a Deed of Donation as a
form of compromise agreement to settle and end a case filed by the latter.[3] The
parties therein agreed to donate their conjugal property consisting of six parcels of
land to their only child, Herminia Palang.[4]

Miguel and Erlinda’s cohabitation produced a son, Kristopher A. Palang, born on

December 6, 1977. In 1979, Miguel and Erlinda were convicted of Concubinage
upon Carlina’s complaint.[5] Two years later, on February 15, 1981, Miguel died.

On July 11, 1981, Carlina Palang and her daughter Herminia Palang de la Cruz,
herein private respondents, instituted the case at bar, an action for recovery of
ownership and possession with damages against petitioner before the Regional Trial
Court in Urdaneta, Pangasinan (Civil Case No. U-4265). Private respondents sought
to get back the riceland and the house and lot both located at Binalonan,
Pangasinan allegedly purchased by Miguel during his cohabitation with petitioner.

Petitioner, as defendant below, contended that while the riceland covered by TCT
No. 101736 is registered in their names (Miguel and Erlinda), she had already given
her half of the property to their son Kristopher Palang. She added that the house
and lot covered by TCT No. 143120 is her sole property, having bought the same
with her own money. Erlinda added that Carlina is precluded from claiming
aforesaid properties since the latter had already donated their conjugal estate to
Herminia.

After trial on the merits, the lower court rendered its decision on June 30, 1989
dismissing the complaint after declaring that there was little evidence to prove that
the subject properties pertained to the conjugal property of Carlina and Miguel
Palang. The lower court went on to provide for the intestate shares of the parties,
particularly of Kristopher Palang, Miguel’s illegitimate son. The dispositive portion of
the decision reads:

“WHEREFORE, premises considered, judgment is hereby rendered-

1)             Dismissing the complaint, with costs against plaintiffs;

2)             Confirming the ownership of defendant Erlinda Agapay of the residential

lot located at Poblacion, Binalonan, Pangasinan, as evidenced by TCT No. 143120,
Lot 290-B including the old house standing therein;

3)             Confirming the ownership of one-half (1/2) portion of that piece of

agricultural land situated at Balisa, San Felipe, Binalonan, Pangasinan, consisting of
10,080 square meters and as evidenced by TCT No. 101736, Lot 1123-A to Erlinda
Agapay;

4)             Adjudicating to Kristopher Palang as his inheritance from his deceased

father, Miguel Palang, the one-half (1/2) of the agricultural land situated at Balisa,
San Felipe, Binalonan, Pangasinan, under TCT No. 101736 in the name of Miguel
Palang, provided that the former (Kristopher) executes, within 15 days after this
decision becomes final and executory, a quit-claim forever renouncing any claims to
annul/reduce the donation to Herminia Palang de la Cruz of all conjugal properties
of her parents, Miguel Palang and Carlina Vallesterol Palang, dated October 30,
1975, otherwise, the estate of deceased Miguel Palang will have to be settled in
another separate action;
5)             No pronouncement as to damages and attorney’s fees.

SO ORDERED.”[6]

On appeal, respondent court reversed the trial court’s decision. The Court of
Appeals rendered its decision on July 22, 1994 with the following dispositive
portion:

“WHEREFORE, PREMISES CONSIDERED, the appealed decision is hereby REVERSED

and another one entered:

1.             Declaring plaintiffs-appellants the owners of the properties in question;

2.             Ordering defendant-appellee to vacate and deliver the properties in

question to herein plaintiffs-appellants;

3.             Ordering the Register of Deeds of Pangasinan to cancel Transfer

Certificate of Title Nos. 143120 and 101736 and to issue in lieu thereof another
certificate of title in the name of plaintiffs-appellants.

No pronouncement as to costs.”[7]

Hence, this petition.

Petitioner claims that the Court of Appeals erred in not sustaining the validity of two
deeds of absolute sale covering the riceland and the house and lot, the first in favor
of Miguel Palang and Erlinda Agapay and the second, in favor of Erlinda Agapay
alone. Second, petitioner contends that respondent appellate court erred in not
declaring Kristopher A. Palang as Miguel Palang’s illegitimate son and thus entitled
to inherit from Miguel’s estate. Third, respondent court erred, according to
petitioner, “in not finding that there is sufficient pleading and evidence that
Kristoffer A. Palang or Christopher A. Palang should be considered as party-
defendant in Civil Case No. U-4625 before the trial court and in CA-G.R. No. 24199.
[8]

After studying the merits of the instant case, as well as the pertinent provisions of
law and jurisprudence, the Court denies the petition and affirms the questioned
decision of the Court of Appeals.

The first and principal issue is the ownership of the two pieces of property subject
of this action. Petitioner assails the validity of the deeds of conveyance over the
same parcels of land. There is no dispute that the transfers of ownership from the
original owners of the riceland and the house and lot, Corazon Ilomin and the
spouses Cespedes, respectively, were valid.

The sale of the riceland on May 17, 1973, was made in favor of Miguel and Erlinda.
The provision of law applicable here is Article 148 of the Family Code providing for
cases of cohabitation when a man and a woman who are not capacitated to marry
each other live exclusively with each other as husband and wife without the benefit
of marriage or under a void marriage. While Miguel and Erlinda contracted marriage
on July 15, 1973, said union was patently void because the earlier marriage of
Miguel and Carlina was still susbsisting and unaffected by the latter’s de facto
separation.

Under Article 148, only the properties acquired by both of the parties through their
actual joint contribution of money, property or industry shall be owned by them in
common in proportion to their respective contributions. It must be stressed that
actual contribution is required by this provision, in contrast to Article 147 which
states that efforts in the care and maintenance of the family and household, are
regarded as contributions to the acquisition of common property by one who has no
salary or income or work or industry. If the actual contribution of the party is not
proved, there will be no co-ownership and no presumption of equal shares.[9]

In the case at bar, Erlinda tried to establish by her testimony that she is engaged in
the business of buy and sell and had a sari-sari store[10]but failed to persuade us
that she actually contributed money to buy the subject riceland. Worth noting is the
fact that on the date of conveyance, May 17, 1973, petitioner was only around
twenty years of age and Miguel Palang was already sixty-four and a pensioner of
the U.S. Government. Considering her youthfulness, it is unrealistic to conclude
that in 1973 she contributed P3,750.00 as her share in the purchase price of
subject property,[11] there being no proof of the same.

Petitioner now claims that the riceland was bought two months before Miguel and
Erlinda actually cohabited. In the nature of an afterthought, said added assertion
was intended to exclude their case from the operation of Article 148 of the Family
Code. Proof of the precise date when they commenced their adulterous cohabitation
not having been adduced, we cannot state definitively that the riceland was
purchased even before they started living together. In any case, even assuming
that the subject property was bought before cohabitation, the rules of co-ownership
would still apply and proof of actual contribution would still be essential.

Since petitioner failed to prove that she contributed money to the purchase price of
the riceland in Binalonan, Pangasinan, we find no basis to justify her co-ownership
with Miguel over the same. Consequently, the riceland should, as correctly held by
the Court of Appeals, revert to the conjugal partnership property of the deceased
Miguel and private respondent Carlina Palang.

Furthermore, it is immaterial that Miguel and Carlina previously agreed to donate

their conjugal property in favor of their daughter Herminia in 1975. The trial court
erred in holding that the decision adopting their compromise agreement “in effect
partakes the nature of judicial confirmation of the separation of property between
spouses and the termination of the conjugal partnership.”[12] Separation of property
between spouses during the marriage shall not take place except by judicial order
or without judicial conferment when there is an express stipulation in the marriage
settlements.[13] The judgment which resulted from the parties’ compromise was not
specifically and expressly for separation of property and should not be so inferred.

With respect to the house and lot, Erlinda allegedly bought the same for P20,000.00
on September 23, 1975 when she was only 22 years old. The testimony of the
notary public who prepared the deed of conveyance for the property reveals the
falsehood of this claim. Atty. Constantino Sagun testified that Miguel Palang
provided the money for the purchase price and directed that Erlinda’s name alone
be placed as the vendee.[14]

The transaction was properly a donation made by Miguel to Erlinda, but one which
was clearly void and inexistent by express provision of law because it was made
between persons guilty of adultery or concubinage at the time of the donation,
under Article 739 of the Civil Code. Moreover, Article 87 of the Family Code
expressly provides that the prohibition against donations between spouses now
applies to donations between persons living together as husband and wife without a
valid marriage,[15] for otherwise, the condition of those who incurred guilt would
turn out to be better than those in legal union.[16]

The second issue concerning Kristopher Palang’s status and claim as an illegitimate
son and heir to Miguel’s estate is here resolved in favor of respondent court’s
correct assessment that the trial court erred in making pronouncements regarding
Kristopher’s heirship and filiation “inasmuch as questions as to who are the heirs of
the decedent, proof of filiation of illegitimate children and the determination of the
estate of the latter and claims thereto should be ventilated in the proper probate
court or in a special proceeding instituted for the purpose and cannot be
adjudicated in the instant ordinary civil action which is for recovery of ownership
and possession.”[17]

As regards the third issue, petitioner contends that Kristopher Palang should be
considered as party-defendant in the case at bar following the trial court’s decision
which expressly found that Kristopher had not been impleaded as party defendant
but theorized that he had submitted to the court’s jurisdiction through his
mother/guardian ad litem.[18] The trial court erred gravely. Kristopher, not having
been impleaded, was, therefore, not a party to the case at bar. His mother, Erlinda,
cannot be called his guardian ad litem for he was not involved in the case at bar.
Petitioner adds that there is no need for Kristopher to file another action to prove
that he is the illegitimate son of Miguel, in order to avoid multiplicity of suits.
[19]
 Petitioner’s grave error has been discussed in the preceeding paragraph where
the need for probate proceedings to resolve the settlement of Miguel’s estate and
Kristopher’s successional rights has been pointed out.

WHEREFORE, the instant petition is hereby DENIED. The questioned decision of

the Court of Appeals is AFFIRMED. Costs against petitioner.
SO ORDERED.

Regalado, (Chairman), Puno, and Mendoza, JJ., concur.

Torres, Jr., J., on leave.

SECOND DIVISION
[ G.R. No. 136803, June 16, 2000 ]
EUSTAQUIO MALLILIN, JR., PETITIONER, VS. MA. ELVIRA
CASTILLO, RESPONDENT.

DECISION

MENDOZA, J.: 

This is a petition for review of the amended decision[1] of the Court of Appeals dated
May 7, 1998 in CA G.R. CV No. 48443 granting respondent's motion for
reconsideration of its decision dated November 7, 1996, and of the resolution dated
December 21, 1998 denying petitioner's motion for reconsideration.

The factual and procedural antecedents are as follows:

On February 24, 1993, petitioner Eustaquio Mallilin, Jr. filed a complaint[2] for

"Partition and/or Payment of Co-Ownership Share, Accounting and Damages"
against respondent Ma. Elvira Castillo. The complaint, docketed as Civil Case No.
93-656 at the Regional Trial Court in Makati City, alleged that petitioner and
respondent, both married and with children, but separated from their respective
spouses, cohabited after a brief courtship sometime in 1979 while their respective
marriages still subsisted. During their union, they set up the Superfreight Customs
Brokerage Corporation, with petitioner as president and chairman of the board of
directors, and respondent as vice-president and treasurer. The business flourished
and petitioner and respondent acquired real and personal properties which were
registered solely in respondent's name. In 1992, due to irreconcilable differences,
the couple separated. Petitioner demanded from respondent his share in the subject
properties, but respondent refused alleging that said properties had been registered
solely in her name.

In her Amended Answer,[3] respondent admitted that she engaged in the customs

brokerage business with petitioner but alleged that the Superfreight Customs
Brokerage Corporation was organized with other individuals and duly registered
with the Securities and Exchange Commission in 1987. She denied that she and
petitioner lived as husband and wife because the fact was that they were still legally
married to their respective spouses. She claimed to be the exclusive owner of all
real and personal properties involved in petitioner's action for partition on the
ground that they were acquired entirely out of her own money and registered solely
in her name.

On November 25, 1994, respondent filed a Motion for Summary Judgment,[4] in

accordance with Rule 34 of the Rules of Court.[5] She contended that summary
judgment was proper, because the issues raised in the pleadings were sham and
not genuine, to wit: 

A.

The main issue is -- Can plaintiff validly claim the partition and/or payment of
co-ownership share, accounting and damages, considering that plaintiff
and defendant are admittedly both married to their respective spouses
under still valid and subsisting marriages, even assuming as claimed by
plaintiff, that they lived together as husband and wife without benefit of marriage?
In other words, can the parties be considered as co-owners of the properties, under
the law, considering the present status of the parties as both married and incapable
of marrying each other, even assuming that they lived together as husband and
wife (?)

B.
As a collateral issue, can the plaintiff be considered as an unregistered co-
owner of the real properties under the Transfer Certificates of Title duly
registered solely in the name of defendant Ma. Elvira Castillo? This issue is
also true as far as the motor vehicles in question are concerned which are also
registered in the name of defendant.[6]

On the first point, respondent contended that even if she and petitioner actually
cohabited, petitioner could not validly claim a part of the subject real and personal
properties because Art. 144 of the Civil Code, which provides that the rules on co-
ownership shall govern the properties acquired by a man and a woman living
together as husband and wife but not married, or under a marriage which is void ab
initio, applies only if the parties are not in any way incapacitated to contract
marriage.[7] In the parties' case, their union suffered the legal impediment of a prior
subsisting marriage. Thus, the question of fact being raised by petitioner, i.e.,
whether they lived together as husband and wife, was irrelevant as no co-
ownership could exist between them.

As to the second issue, respondent maintained that petitioner can not be

considered an unregistered co-owner of the subject properties on the ground that,
since titles to the land are solely in her name, to grant petitioner's prayer would be
to allow a collateral attack on the validity of such titles.

Petitioner opposed respondent's Motion for Summary Judgment.[8] He contended

that the case presented genuine factual issues and that Art. 144 of the Civil Code
had been repealed by the Family Code which now allows, under Art. 148, a limited
co-ownership even though a man and a woman living together are not capacitated
to marry each other. Petitioner also asserted that an implied trust was constituted
when he and respondent agreed to register the properties solely in the latter's
name although the same were acquired out of the profits made from their
brokerage business. Petitioner invoked the following provisions of the Civil Code: 

Art. 1452. If two or more persons agree to purchase property and by common
consent the legal title is taken in the name of one of them for the benefit of all, a
trust is created by force of law in favor of the others in proportion to the interest of
each.

Art. 1453. When the property is conveyed to a person in reliance upon his declared
intention to hold it for, or transfer it to another grantor, there is an implied trust in
favor of the person whose benefit is contemplated.

On January 30, 1995, the trial court rendered its decision[9] granting respondent's
motion for summary judgment. It ruled that an examination of the pleadings shows
that the issues involved were purely legal. The trial court also sustained
respondent's contention that petitioner's action for partition amounted to a
collateral attack on the validity of the certificates of title covering the subject
properties. It held that even if the parties really had cohabited, the action for
partition could not be allowed because an action for partition among co-owners
ceases to be so and becomes one for title if the defendant, as in the present case,
alleges exclusive ownership of the properties in question. For these reasons, the
trial court dismissed Civil Case No. 93-656.

On appeal, the Court of Appeals on November 7, 1996, ordered the case remanded
to the court of origin for trial on the merits. It cited the decision in Roque v.
Intermediate Appellate Court[10] to the effect that an action for partition is at once
an action for declaration of co-ownership and for segregation and conveyance of a
determinate portion of the properties involved. If the defendant asserts exclusive
title over the property, the action for partition should not be dismissed. Rather, the
court should resolve the case and if the plaintiff is unable to sustain his claimed
status as a co-owner, the court should dismiss the action, not because the wrong
remedy was availed of, but because no basis exists for requiring the defendant to
submit to partition. Resolving the issue whether petitioner's action for partition was
a collateral attack on the validity of the certificates of title, the Court of Appeals
held that since petitioner sought to compel respondent to execute documents
necessary to effect transfer of what he claimed was his share, petitioner was not
actually attacking the validity of the titles but in fact, recognized their validity.
Finally, the appellate court upheld petitioner's position that Art. 144 of the Civil
Code had been repealed by Art. 148 of the Family Code. 

Respondent moved for reconsideration of the decision of the Court of Appeals. On

May 7, 1998, nearly two years after its first decision, the Court of Appeals granted
respondent's motion and reconsidered its prior decision. In its decision now
challenged in the present petition, it held --

Prefatorily, and to better clarify the controversy on whether this suit is a collateral
attack on the titles in issue, it must be underscored that plaintiff-appellant alleged
in his complaint that all the nine (9) titles are registered in the name of defendant-
appellee, Ma. Elvira T. Castillo, except one which appears in the name of Eloisa
Castillo (see par. 9, Complaint). However, a verification of the annexes of such
initiatory pleading shows some discrepancies, to wit:

1. TCT No. 149046 (Annex A) =.Elvira T. Castillo, single

2. TCT No. 168208 ( Annex B) =..........-do-

3. TCT No. 37046 (Annex C) =..........-do-

4. TCT No. 37047 (Annex D) = ..... ...-do-

5. TCT No. 37048 (Annex E) =..........-do-

6. TCT No. 30368 (Annex F) = Steelhaus Realty & Dev. Corp.

7. TCT No. 30369 (Annex G) =..........-do-

8. TCT No. 30371 (Annex F) =..........-do-

9.TCT No. (92323) 67881 (Annex I) = Eloisa Castillo

In this action, plaintiff-appellant seeks to be declared as 1/2 co-owner of the real

properties covered by the above listed titles and eventually for their partition [par.
(a), Prayer; p. 4 Records]. Notably, in order to achieve such prayer for a joint co-
ownership declaration, it is unavoidable that the individual titles involved be
altered, changed, canceled or modified to include therein the name of the appellee
as a registered 1/2 co-owner. Yet, no cause of action or even a prayer is contained
in the complaint filed. Manifestly, absent any cause or prayer for the alteration,
cancellation, modification or changing of the titles involved, the desired declaration
of co-ownership and eventual partition will utterly be an indirect or collateral attack
on the subject titles in this suit.

It is here that We fell into error, such that, if not rectified will surely lead to a
procedural lapse and a possible injustice. Well settled is the rule that a certificate of
title cannot be altered, modified or canceled except in a direct proceeding in
accordance with law. 

In this jurisdiction, the remedy of the landowner whose property has been
wrongfully or erroneously registered in another name is, after one year from the
date of the decree, not to set aside the decree, but respecting it as incontrovertible
and no longer open to review, to bring an action for reconveyance or, if the
property had passed into the hands of an innocent purchaser for value, for
damages. Verily, plaintiff-appellant should have first pursued such remedy or any
other relief directly attacking the subject titles before instituting the present
partition suit. Apropos, the case at bench appears to have been prematurely filed.

Lastly, to grant the partition prayed for by the appellant will in effect rule and
decide against the properties registered in the names of Steelhouse Realty and
Development Corporation and Eloisa Castillo, who are not parties in the case. To
allow this to happen will surely result to injustice and denial of due process of law. .
. .[11]
Petitioner moved for reconsideration but his motion was denied by the Court of
Appeals in its resolution dated December 21, 1998. Hence this petition.

Petitioner contends that: (1) the Court of Appeals, in its first decision of November
7, 1996, was correct in applying the Roque ruling and in rejecting respondent's
claim that she was the sole owner of the subject properties and that the partition
suit was a collateral attack on the titles; (2) the Court of Appeals correctly ruled in
its first decision that Art. 148 of the Family Code governs the co-ownership
between the parties, hence, the complaint for partition is proper; (3) with respect
to the properties registered in the name of Steelhouse Realty, respondent admitted
ownership thereof and, at the very least, these properties could simply be excluded
and the partition limited to the remaining real and personal properties; and (4) the
Court of Appeals erred in not holding that under the Civil Code, there is an implied
trust in his favor.[12]

The issue in this case is really whether summary judgment, in accordance with Rule
35 of the Rules of Court, is proper. We rule in the negative.

First. Rule 35, §3 of the Rules of Court provides that summary judgment is proper
only when, based on the pleadings, depositions, and admissions on file, and after
summary hearing, it is shown that except as to the amount of damages, there is no
veritable issue regarding any material fact in the action and the movant is entitled
to judgment as a matter of law.[13] Conversely, where the pleadings tender a
genuine issue, i.e., an issue of fact the resolution of which calls for the presentation
of evidence, as distinguished from an issue which is sham, fictitious, contrived, set-
up in bad faith, or patently unsubstantial, summary judgment is not proper.[14]

In the present case, we are convinced that genuine issues exist. Petitioner anchors
his claim of co-ownership on two factual grounds: first, that said properties were
acquired by him and respondent during their union from 1979 to 1992 from profits
derived from their brokerage business; and second, that said properties were
registered solely in respondent's name only because they agreed to that
arrangement, thereby giving rise to an implied trust in accordance with Art. 1452
and Art. 1453 of the Civil Code. These allegations are denied by respondent. She
denies that she and petitioner lived together as husband and wife. She also claims
that the properties in question were acquired solely by her with her own money and
resources. With such conflicting positions, the only way to ascertain the truth is
obviously through the presentation of evidence by the parties.

The trial court ruled that it is immaterial whether the parties actually lived together
as husband and wife because Art. 144 of the Civil Code can not be made to apply to
them as they were both incapacitated to marry each other. Hence, it was
impossible for a co-ownership to exist between them.

We disagree.

Art. 144 of the Civil Code provides:

When a man and a woman live together as husband and wife, but they are not
married, or their marriage is void from the beginning, the property acquired by
either or both of them through their work or industry or their wages and salaries
shall be governed by the rules on co-ownership.

This provision of the Civil Code, applies only to cases in which a man and a woman
live together as husband and wife without the benefit of marriage provided they are
not incapacitated or are without impediment to marry each other,[15] or in which the
marriage is void ab initio,provided it is not bigamous. Art. 144, therefore, does not
cover parties living in an adulterous relationship. However, Art. 148 of the Family
Code now provides for a limited co-ownership in cases where the parties in union
are incapacitated to marry each other. It states:

In cases of cohabitation not falling under the preceding article,[16] only the

properties acquired by both of the parties through their actual joint contribution of
money, property or industry shall be owned by them in common in proportion to
their respective contributions. In the absence of proof to the contrary, their
contributions and corresponding shares are presumed to be equal. The same rule
and presumption shall apply to joint deposits of money and evidences of credits.

If one of the parties is validly married to another, his or her share in the co-
ownership shall accrue to the absolute community or conjugal partnership existing
in such valid marriage. If the party who acted in bad faith is not validly married to
another, his or her share shall be forfeited in the manner provided in the last
paragraph of the preceding article.

The foregoing rules on forfeiture shall likewise apply even if both parties are in bad
faith.

It was error for the trial court to rule that, because the parties in this case were not
capacitated to marry each other at the time that they were alleged to have been
living together, they could not have owned properties in common. The Family Code,
in addition to providing that a co-ownership exists between a man and a woman
who live together as husband and wife without the benefit of marriage, likewise
provides that, if the parties are incapacitated to marry each other, properties
acquired by them through their joint contribution of money, property or industry
shall be owned by them in common in proportion to their contributions which, in the
absence of proof to the contrary, is presumed to be equal. There is thus co-
ownership eventhough the couple are not capacitated to marry each other.

In this case, there may be a co-ownership between the parties herein.

Consequently, whether petitioner and respondent cohabited and whether the
properties involved in the case are part of the alleged co-ownership are genuine
and material. All but one of the properties involved were alleged to have been
acquired after the Family Code took effect on August 3, 1988. With respect to the
property acquired before the Family Code took effect if it is shown that it was really
acquired under the regime of the Civil Code, then it should be excluded.

Petitioner also alleged in paragraph 7 of his complaint that:

Due to the effective management, hardwork and enterprise of plaintiff assisted by

defendant, their customs brokerage business grew and out of the profits therefrom,
the parties acquired real and personal properties which were, upon agreement of
the parties, listed and registered in defendant's name with plaintiff as the
unregistered co-owner of all said properties.[17]

On the basis of this, he contends that an implied trust existed pursuant to Art. 1452
of the Civil Code which provides that "(I)f two or more persons agree to purchase
property and by common consent the legal title is taken in the name of one of them
for the benefit of all, a trust is created by force of law in favor of the others in
proportion to the interest of each." We do not think this is correct. The legal relation
of the parties is already specifically covered by Art. 148 of the Family Code under
which all the properties acquired by the parties out of their actual joint
contributions of money, property or industry shall constitute a co-ownership. Co-
ownership is a form of trust and every co-owner is a trustee for the other.[18] The
provisions of Art. 1452 and Art. 1453 of the Civil Code, then are no longer material
since a trust relation already inheres in a co-ownership which is governed under
Title III, Book II of the Civil Code.

Second. The trial court likewise dismissed petitioner's action on the ground that
the same amounted to a collateral attack on the certificates of title involved. As
already noted, at first, the Court of Appeals ruled that petitioner's action does not
challenge the validity of respondent's titles. However, on reconsideration, it
reversed itself and affirmed the trial court. It noted that petitioner's complaint failed
to include a prayer for the alteration, cancellation, modification, or changing of the
titles involved. Absent such prayer, the appellate court ruled that a declaration of
co-ownership and eventual partition would involve an indirect or collateral attack on
the titles. We disagree.

A torrens title, as a rule, is conclusive and indefeasible. Proceeding from this, P.D.
No. 1529,[19] §48 provides that a certificate of title shall not be subject to collateral
attack and can not be altered, modified, or canceled except in a direct proceeding.
When is an action an attack on a title? It is when the object of the action or
proceeding is to nullify the title, and thus challenge the judgment pursuant to which
the title was decreed. The attack is direct when the object of an action or
proceeding is to annul or set aside such judgment, or enjoin its enforcement. On
the other hand, the attack is indirect or collateral when, in an action to obtain a
different relief, an attack on the judgment is nevertheless made as an incident
thereof.[20]

In his complaint for partition, consistent with our ruling in Roque regarding the
nature of an action for partition, petitioner seeks first, a declaration that he is a co-
owner of the subject properties; and second, the conveyance of his lawful shares.
He does not attack respondent's titles. Petitioner alleges no fraud, mistake, or any
other irregularity that would justify a review of the registration decree in
respondent's favor. His theory is that although the subject properties were
registered solely in respondent's name, but since by agreement between them as
well as under the Family Code, he is co-owner of these properties and as such is
entitled to the conveyance of his shares. On the premise that he is a co-owner, he
can validly seek the partition of the properties in co-ownership and the conveyance
to him of his share.

Thus, in Guevara v. Guevara,[21] in which a parcel of land bequeathed in a last will

and testament was registered in the name of only one of the heirs, with the
understanding that he would deliver to the others their shares after the debts of the
original owner had been paid, this Court ruled that notwithstanding the registration
of the land in the name of only one of the heirs, the other heirs can claim their
shares in "such action, judicial or extrajudicial, as may be necessary to partition the
estate of the testator."[22]

Third. The Court of Appeals also reversed its first decision on the ground that to
order partition will, in effect, rule and decide against Steelhouse Realty
Development Corporation and Eloisa Castillo, both strangers to the present case, as
to the properties registered in their names. This reasoning, however, ignores the
fact that the majority of the properties involved in the present case are registered
in respondent's name, over which petitioner claims rights as a co-owner. Besides,
other than the real properties, petitioner also seeks partition of a substantial
amount of personal properties consisting of motor vehicles and several pieces of
jewelry. By dismissing petitioner's complaint for partition on grounds of due process
and equity, the appellate court unwittingly denied petitioner his right to prove
ownership over the claimed real and personal properties. The dismissal of
petitioner's complaint is unjustified since both ends may be amply served by simply
excluding from the action for partition the properties registered in the name of
Steelhouse Realty and Eloisa Castillo.

WHEREFORE, the amended decision of the Court of Appeals, dated May 7, 1998, is
REVERSED and the case is REMANDED to the Regional Trial Court, Branch 59,
Makati City for further proceedings on the merits.

SO ORDERED.

Bellosillo, (Chairman), Quisumbing,  and De Leon, Jr., JJ.,  concur.

Buena, J., no part. Percuriam

FIRST DIVISION
[ G.R. No. 150611, June 10, 2003 ]
JACINTO SAGUID, PETITIONER, VS. HON. COURT OF
APPEALS, THE REGIONAL TRIAL COURT, BRANCH 94, BOAC,
MARINDUQUE AND GINA S. REY, RESPONDENTS.

DECISION

YNARES-SANTIAGO, J.: 

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

Seventeen-year old Gina S. Rey was married,[2] but separated de facto from her

husband, when she met petitioner Jacinto Saguid in Marinduque, sometime in July
1987.[3]  After a brief courtship, the two decided to cohabit as husband and wife in a
house built on a lot owned by Jacinto's father.[4]  Their cohabitation was not blessed
with any children.  Jacinto made a living as the patron of their fishing vessel
"Saguid Brothers."[5]  Gina, on the other hand, worked as a fish dealer, but decided
to work as an entertainer in Japan from 1992 to 1994 when her relationship with
Jacinto's relatives turned sour.  Her periodic absence, however, did not ebb away
the conflict with petitioner's relatives. In 1996, the couple decided to separate and
end up their 9-year cohabitation.[6]

On January 9, 1997, private respondent filed a complaint for Partition and Recovery
of Personal Property with Receivership against the petitioner with the Regional Trial
Court of Boac, Marinduque.  She alleged that from her salary of $1,500.00 a month
as entertainer in Japan, she was able to contribute P70,000.00 in the completion of
their unfinished house. Also, from her own earnings as an entertainer and fish
dealer, she was able to acquire and accumulate appliances, pieces of furniture and
household effects, with a total value of P111,375.00. She prayed that she be
declared the sole owner of these personal properties and that the amount of
P70,000.00, representing her contribution to the construction of their house, be
reimbursed to her.

Private respondent testified that she deposited part of her earnings in her savings
account with First Allied Development Bank.[7]  Her Pass Book shows that as of May
23, 1995, she had a balance of P21,046.08.[8]  She further stated that she had a
total of P35,465.00[9] share in the joint account deposit which she and the petitioner
maintained with the same bank.[10]  Gina declared that said deposits were spent for
the purchase of construction materials, appliances and other personal properties.[11]

In his answer[12] to the complaint, petitioner claimed that the expenses for the
construction of their house were defrayed solely from his income as a captain of
their fishing vessel.  He averred that private respondent's meager income as fish
dealer rendered her unable to contribute in the construction of said house. Besides,
selling fish was a mere pastime to her; as such, she was contented with the small
quantity of fish allotted to her from his fishing trips.   Petitioner further contended
that Gina did not work continuously in Japan from 1992 to 1994, but only for a 6-
month duration each year.  When their house was repaired and improved sometime
in 1995-1996, private respondent did not share in the expenses because her
earnings as entertainer were spent on the daily needs and business of her parents.
From his income in the fishing business, he claimed to have saved a total of
P130,000.00, P75,000.00 of which was placed in a joint account deposit with
private respondent.  This savings, according to petitioner was spent in purchasing
the disputed personal properties.
On May 21, 1997, the trial court declared the petitioner as in default for failure to
file a pre-trial brief as required by Supreme Court Circular No. 1-89.[13]  

On May 26, 1997, petitioner filed a motion for reconsideration[14] of the May 21,
1997 order, which was denied on June 2, 1997, and private respondent was allowed
to present evidence ex parte.[15] Petitioner filed another motion for reconsideration
but the same was also denied on October 8, 1997. 

On July 15, 1998, a decision[16] was rendered  in favor of private respondent, the

dispositive portion of which reads:

WHEREFORE, in view of all the foregoing, judgment is hereby rendered in favor of

the plaintiff Gina S. Rey against defendant Jacinto Saguid:

a)      Ordering the partition of the house identified as plaintiff's Exhibit C and D and
directing the defendant to return and/or reimburse to the plaintiff the amount of
seventy thousand pesos (P70,000,00) which the latter actually contributed to its
construction and completion;

b)      Declaring the plaintiff as the exclusive owner of the personal properties listed
on Exhibit M;

c)      Ordering the defendant, and/or anyone in possession of the aforesaid

personal properties, to return and/or deliver the same to the plaintiff; and

d)      Ordering the defendant to pay the plaintiff moral damages in the sum of fifty
thousand pesos (P50,000.00) plus the costs of suit.

SO ORDERED.[17]

On appeal, said decision was affirmed by the Court of Appeals; however, the award
of P50,000.00 as moral damages was deleted for lack of basis.[18]  The appellate
court ruled that the propriety of the order which declared the petitioner as in
default became moot and academic in view of the effectivity of the 1997 Rules of
Civil Procedure.  It explained that the new rules now require the filing of a pre-trial
brief and the defendant's non-compliance therewith entitles the plaintiff to present
evidence ex parte. 

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

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

B.

THE HONORABLE COURT OF APPEALS COMMIT[TED] A REVERSIBLE ERROR IN

RELYING ON THE FACTUAL FINDINGS OF THE TRIAL COURT WHICH RECEIVED THE
EVIDENCE OF HEREIN RESPONDENT ONLY EX PARTE.[19]
The issues for resolution are: (1) whether or not the trial court erred in allowing
private respondent to present evidence ex parte; and (2) whether or not the trial
court's decision is supported by evidence.

Under Section 6, Rule 18 of the 1997 Rules of Civil Procedure, the failure of the
defendant to file a pre-trial brief shall have the same effect as failure to appear at
the pre-trial, i.e., the plaintiff may present his evidence ex parte and the court shall
render judgment on the basis thereof.[20]  The remedy of the defendant is to file a
motion for reconsideration[21] showing that his failure to file a pre-trial brief was due
to fraud, accident, mistake or excusable neglect.[22]   The motion need not really
stress the fact that the defendant has a valid and meritorious defense because his
answer which contains his defenses is already on record.[23]

In the case at bar, petitioner insists that his failure to file a pre-trial brief is justified
because he was not represented by counsel.  This justification is not, however,
sufficient to set aside the order directing private respondent to present evidence ex
parte, inasmuch as the petitioner chose at his own risk not to be represented by
counsel.  Even without the assistance of a lawyer, petitioner was able to file a
motion for extension to file answer,[24] the required answer stating therein the
special and affirmative defenses,[25] and several other motions.[26]  If it were true
that petitioner did not understand the import of the April 23, 1997 order directing
him to file a pre-trial brief, he could have inquired from the court or filed a motion
for extension of time to file the brief. Instead, he waited until May 26, 1997, or 14
days from his alleged receipt of the April 23, 1997 order before he filed a motion
asking the court to excuse his failure to file a brief. Pre-trial rules are not to be
belittled or dismissed because their non-observance may result in prejudice to a
party's substantive rights.  Like all rules, they should be followed except only for
the most persuasive of reasons when they may be relaxed to relieve a litigant of an
injustice not commensurate with the degree of his thoughtlessness in not complying
with the procedure prescribed.[27]  
In the instant case, the fact that petitioner was not assisted by a lawyer is not a
persuasive reason to relax the application of the rules.  There is nothing in the
Constitution which mandates that a party in a non-criminal proceeding be
represented by counsel and that the absence of such representation amounts to a
denial of due process. The assistance of lawyers, while desirable, is not
indispensable. The legal profession is not engrafted in the due process clause such
that without the participation of its members the safeguard is deemed ignored or
violated.[28]

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

Coming now to the substantive issue, it is not disputed that Gina and Jacinto were
not capacitated to marry each other because the former was validly married to
another man at the time of her cohabitation with the latter.  Their property regime
therefore is governed by Article 148[30] of the Family Code, which applies to
bigamous marriages, adulterous relationships, relationships in a state of
concubinage, relationships where both man and woman are married to other
persons, and multiple alliances of the same married man.  Under this regime,
"...only the properties acquired by both of the parties through their actual joint
contribution of money, property, or industry shall be owned by them in common in
proportion to their respective contributions ..."[31] Proof of actual contribution is
required.[32]

In the case at bar, although the adulterous cohabitation of the parties commenced
in 1987, which is before the date of the effectivity of the Family Code on August 3,
1998, Article 148 thereof applies because this provision was intended precisely to
fill up the hiatus in Article 144 of the Civil Code.[33]  Before Article 148 of the Family
Code was enacted, there was no provision governing property relations of couples
living in a state of adultery or concubinage. Hence, even if the cohabitation or the
acquisition of the property occurred before the Family Code took effect, Article 148
governs.[34]
In the cases of Agapay v. Palang,[35] and Tumlos v. Fernandez,[36] which involved the
issue of co-ownership of properties acquired by the parties to a bigamous marriage
and an adulterous relationship, respectively, we ruled that proof of actual
contribution in the acquisition of the property is essential.  The claim of co-
ownership of the petitioners therein who were parties to the bigamous and
adulterous union is without basis because they failed to substantiate their allegation
that they contributed money in the purchase of the disputed properties.  Also
in Adriano v. Court of Appeals,[37] we ruled that the fact that the controverted
property was titled in the name of the parties to an adulterous relationship is not
sufficient proof of co-ownership absent evidence of actual contribution in the
acquisition of the property.

As in other civil cases, the burden of proof rests upon the party who, as determined
by the pleadings or the nature of the case, asserts an affirmative issue. 
Contentions must be proved by competent evidence and reliance must be had on
the strength of the party's own evidence and not upon the weakness of the
opponent's defense.[38]  This applies with more vigor where, as in the instant case,
the plaintiff was allowed to present evidence ex parte.  The plaintiff is not
automatically entitled to the relief prayed for. The law gives the defendant some
measure of protection as the plaintiff must still prove the allegations in the
complaint.  Favorable relief can be granted only after the court is convinced that
the facts proven by the plaintiff warrant such relief.[39]  Indeed, the party alleging a
fact has the burden of proving it and a mere allegation is not evidence.[40]  

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

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

As regards the trial court's award of P50,000.00 as moral damages, the Court of
Appeals correctly deleted the same for lack of basis.

WHEREFORE, in view of all the foregoing, the Decision of the Court of Appeals in
CA-G.R. CV No. 64166 is AFFIRMED with MODIFICATION.  Private respondent
Gina S. Rey is declared co-owner of petitioner Jacinto Saguid in the controverted
house to the extent of P11,413.00 and personal properties to the extent of
P55,687.50.  Petitioner is ordered to reimburse the amount of P67,100.50 to
private respondent, failing which the house shall be sold at public auction to satisfy
private respondent's claim.

SO ORDERED.

Davide, Jr., C.J., (Chairman), Vitug, Carpio, and Azcuna, JJ., concur.

SECOND DIVISION
[ G.R. NO. 169698, November 29, 2006 ]
LUPO ATIENZA, PETITIONER, VS. YOLANDA DE CASTRO,
RESPONDENT. 

DECISION

GARCIA, J.: 
Assailed and sought to be set aside in this petition for review on certiorari is the
Decision[1] dated April 29, 2005 of the Court of Appeals (CA) in CA-G.R. CV No.
69797, as reiterated in its Resolution[2] of September 16, 2005, reversing an earlier
decision of the Regional Trial Court (RTC) of Makati City, Branch 61, in an action
for Judicial Partition of Real Property thereat commenced by the herein petitioner
Lupo Atienza against respondent Yolanda de Castro.

The facts:

Sometime in 1983, petitioner Lupo Atienza, then the President and General
Manager of Enrico Shipping Corporation and Eurasian Maritime Corporation, hired
the services of respondent Yolanda U. De Castro as accountant for the two
corporations.

In the course of time, the relationship between Lupo and Yolanda became intimate.
Despite Lupo being a married man, he and Yolanda eventually lived together in
consortium beginning the later part of 1983. Out of their union, two children were
born. However, after the birth of their second child, their relationship turned sour
until they parted ways.

On May 28, 1992, Lupo filed in the RTC of Makati City a complaint against Yolanda
for the judicial partition between them of a parcel of land with improvements
located in Bel-Air Subdivision, Makati City and covered by Transfer Certificate of
Title No. 147828 of the Registry of Deeds of Makati City. In his complaint, docketed
in said court as Civil Case No. 92-1423, Lupo alleged that the subject property was
acquired during his union with Yolanda as common-law husband and wife, hence
the property is co-owned by them.

Elaborating, Lupo averred in his complaint that the property in question was
acquired by Yolanda sometime in 1987 using his exclusive funds and that the title
thereto was transferred by the seller in Yolanda's name without his knowledge and
consent. He did not interpose any objection thereto because at the time, their affair
was still thriving. It was only after their separation and his receipt of information
that Yolanda allowed her new live-in partner to live in the disputed property, when
he demanded his share thereat as a co-owner.

In her answer, Yolanda denied Lupo's allegations. According to her, she acquired
the same property for Two Million Six Hundred Thousand Pesos (P2,600,000.00)
using her exclusive funds. She insisted having bought it thru her own savings and
earnings as a businesswoman.

In a decision[3] dated December 11, 2000, the trial court rendered judgment for
Lupo by declaring the contested property as owned in common by him and Yolanda
and ordering its partition between the two in equal shares, thus:

WHEREFORE, judgment is hereby rendered declaring the property covered by

Transfer Certificate of Title No. 147828 of the Registry of Deeds of Makati City to be
owned in common by plaintiff LUPO ATIENZA and the defendant YOLANDA U. DE
CASTRO share-and-share alike and ordering the partition of said property between
them. Upon the finality of this Decision, the parties are hereby directed to submit
for the confirmation of the Court a mutually agreed project of partition of said
property or, in case the physical partition of said property is not feasible because of
its nature, that either the same be assigned to one of the parties who shall pay the
value corresponding to the share of the other or that the property to be sold and
the proceeds thereof be divided equally between the parties after deducting the
expenses incident to said sale.

The parties shall bear their own attorney's fees and expenses of litigation.

Costs against the defendant.

SO ORDERED.

From the decision of the trial court, Yolanda went on appeal to the CA in CA-G.R.
CV No. 69797, therein arguing that the evidence on record preponderate that she
purchased the disputed property in her own name with her own money. She
maintained that the documents appertaining to her acquisition thereof are the best
evidence to prove who actually bought it, and refuted the findings of the trial court,
as well as Lupo's assertions casting doubt as to her financial capacity to acquire the
disputed property.

As stated at the threshold hereof, the appellate court, in its decision[4] of April 29,
2005, reversed and set aside that of the trial court and adjudged the litigated
property as exclusively owned by Yolanda, to wit:

WHEREFORE, the foregoing considered, the assailed decision is

hereby REVERSED and SET ASIDE. The subject property is hereby declared to be
exclusively owned by defendant-appellant Yolanda U. De Castro. No costs.

SO ORDERED.

In decreeing the disputed property as exclusively owned by Yolanda, the CA ruled

that under the provisions of Article 148 of the Family Code vis-á-vis the evidence
on record and attending circumstances, Yolanda's claim of sole ownership is
meritorious, as it has been substantiated by competent evidence. To the CA, Lupo
failed to overcome the burden of proving his allegation that the subject property
was purchased by Yolanda thru his exclusive funds.

With his motion for reconsideration having been denied by the CA in its Resolution
of September 16, 2005,[5] Lupo is now with this Court via the present recourse
arguing that pursuant to Article 144[6] of the Civil Code, he was in no way burdened
to prove that he contributed to the acquisition of the subject property because with
or without the contribution by either partner, he is deemed a co-owner thereof,
adding that under Article 484[7] of Civil Code, as long as the property was acquired
by either or both of them during their extramarital union, such property would be
legally owned by them in common and governed by the rules on co-ownership,
which apply in default of contracts, or special provisions.

We DENY.

It is not disputed that the parties herein were not capacitated to marry each other
because petitioner Lupo Atienza was validly married to another woman at the time
of his cohabitation with the respondent. Their property regime, therefore, is
governed by Article 148[8] of the Family Code, which applies to bigamous marriages,
adulterous relationships, relationships in a state of concubinage, relationships
where both man and woman are married to other persons, and multiple alliances of
the same married man. Under this regime, ...only the properties acquired by both
of the parties through their actual joint contribution of money, property, or industry
shall be owned by them in common in proportion to their respective
contributions ...[9] Proof of actual contribution is required.[10]

As it is, the regime of limited co-ownership of property governing the union of

parties who are not legally capacitated to marry each other, but who nonetheless
live together as husband and wife, applies to properties acquired during said
cohabitation in proportion to their respective contributions. Co-ownership will only
be up to the extent of the proven actual contribution of money, property or
industry. Absent proof of the extent thereof, their contributions and corresponding
shares shall be presumed to be equal.[11]

Here, although the adulterous cohabitation of the parties commenced in 1983, or

way before the effectivity of the Family Code on August 3, 1998, Article 148 thereof
applies because this provision was intended precisely to fill up the hiatus in Article
144 of the Civil Code.[12] Before Article 148 of the Family Code was enacted, there
was no provision governing property relations of couples living in a state of adultery
or concubinage. Hence, even if the cohabitation or the acquisition of the property
occurred before the Family Code took effect, Article 148 governs.[13]
The applicable law being settled, we now remind the petitioner that here, as in
other civil cases, the burden of proof rests upon the party who, as determined by
the pleadings or the nature of the case, asserts an affirmative issue. Contentions
must be proved by competent evidence and reliance must be had on the strength of
the party's own evidence and not upon the weakness of the opponent's defense.
The petitioner as plaintiff below is not automatically entitled to the relief prayed for.
The law gives the defendant some measure of protection as the plaintiff must still
prove the allegations in the complaint. Favorable relief can be granted only after
the court is convinced that the facts proven by the plaintiff warrant such relief.
[14]
 Indeed, the party alleging a fact has the burden of proving it and a mere
allegation is not evidence.[15]

It is the petitioner's posture that the respondent, having no financial capacity to

acquire the property in question, merely manipulated the dollar bank accounts of
his two (2) corporations to raise the amount needed therefor. Unfortunately for
petitioner, his submissions are burdened by the fact that his claim to the property
contradicts duly written instruments, i.e., the Contract to Sell dated March 24,
1987, the Deed of Assignment of Redemption dated March 27, 1987 and the Deed
of Transfer dated April 27, 1987, all entered into by and between the respondent
and the vendor of said property, to the exclusion of the petitioner. As aptly pointed
out by the CA:

Contrary to the disquisition of the trial court, [Lupo] failed to overcome this burden.
Perusing the records of the case, it is evident that the trial court committed errors
of judgment in its findings of fact and appreciation of evidence with regard to the
source of the funds used for the purchase of the disputed property and ultimately
the rightful owner thereof. Factual findings of the trial court are indeed entitled to
respect and shall not be disturbed, unless some facts or circumstances of weight
and substance have been overlooked or misinterpreted that would otherwise
materially affect the disposition of the case.

In making proof of his case, it is paramount that the best and most complete
evidence be formally entered. Rather than presenting proof of his actual
contribution to the purchase money used as consideration for the disputed
property, [Lupo] diverted the burden imposed upon him to [Yolanda] by painting
her as a shrewd and scheming woman without the capacity to purchase any
property. Instead of proving his ownership, or the extent thereof, over the subject
property, [Lupo] relegated his complaint to a mere attack on the financial capacity
of [Yolanda]. He presented documents pertaining to the ins and outs of the dollar
accounts of ENRICO and EURASIAN, which unfortunately failed to prove his actual
contribution in the purchase of the said property. The fact that [Yolanda] had a
limited access to the funds of the said corporations and had repeatedly withdrawn
money from their bank accounts for their behalf do not prove that the money she
used in buying the disputed property, or any property for that matter, came from
said withdrawals.

As it is, the disquisition of the court a quo heavily rested on the apparent financial
capacity of the parties. On one side, there is [Lupo], a retired sea captain and the
President and General Manager of two corporations and on the other is [Yolanda], a
Certified Public Accountant. Surmising that [Lupo] is financially well heeled than
[Yolanda], the court a quo concluded, sans evidence, that [Yolanda] had taken
advantage of [Lupo]. Clearly, the court a quo is in error. (Words in brackets
supplied.)

As we see it, petitioner's claim of co-ownership in the disputed property is without

basis because not only did he fail to substantiate his alleged contribution in the
purchase thereof but likewise the very trail of documents pertaining to its purchase
as evidentiary proof redounds to the benefit of the respondent. In contrast, aside
from his mere say so and voluminous records of bank accounts, which sadly find no
relevance in this case, the petitioner failed to overcome his burden of proof.
Allegations must be proven by sufficient evidence. Simply stated, he who alleges a
fact has the burden of proving it; mere allegation is not evidence.

True, the mere issuance of a certificate of title in the name of any person does not
foreclose the possibility that the real property covered thereby may be under co-
ownership with persons not named in the certificate or that the registrant may only
be a trustee or that other parties may have acquired interest subsequent to the
issuance of the certificate of title. However, as already stated, petitioner's evidence
in support of his claim is either insufficient or immaterial to warrant the trial court's
finding that the disputed property falls under the purview of Article 148 of the
Family Code. In contrast to petitioner's dismal failure to prove his cause, herein
respondent was able to present preponderant evidence of her sole ownership. There
can clearly be no co-ownership when, as here, the respondent sufficiently
established that she derived the funds used to purchase the property from her
earnings, not only as an accountant but also as a businesswoman engaged in
foreign currency trading, money lending and jewelry retail. She presented her
clientele and the promissory notes evincing substantial dealings with her clients.
She also presented her bank account statements and bank transactions, which
reflect that she had the financial capacity to pay the purchase price of the subject
property.

All told, the Court finds and so holds that the CA committed no reversible error in
rendering the herein challenged decision and resolution.
WHEREFORE, the instant petition is DENIED and the assailed issuances of the CA
are AFFIRMED.

Costs against the petitioner.

SO ORDERED.

Puno, (Chairperson), Sandoval-Gutierrez, Corona, and Azcuna, JJ., concur.

FIRST DIVISION
[ G. R. No. 159310, February 24, 2009 ]
CAMILO F. BORROMEO, PETITIONER, ANTONIETTA O.
DESCALLAR, RESPONDENT.

DECISION

PUNO, C.J.: 

What are the rights of an alien (and his successor-in-interest) who acquired real
properties in the country as against his former Filipina girlfriend in whose sole name
the properties were registered under the Torrens system?

The facts are as follows:

Wilhelm Jambrich, an Austrian, arrived in the Philippines in 1983 after he was

assigned by his employer, Simmering-Graz Panker A.G., an Austrian company, to
work at a project in Mindoro.  In 1984, he transferred to Cebu and worked at the
Naga II Project of the National Power Corporation.  There, he met respondent
Antonietta Opalla-Descallar, a separated mother of two boys who was working as a
waitress at St. Moritz Hotel.  Jambrich befriended respondent and asked her to
tutor him in English. In dire need of additional income to support her children,
respondent agreed. The tutorials were held in Antonietta's residence at a squatters'
area in Gorordo Avenue.

Jambrich and respondent fell in love and decided to live together in a rented house
in Hernan Cortes, Mandaue City.  Later, they transferred to their own house and
lots at Agro-Macro Subdivision, Cabancalan, Mandaue City.  In the Contracts to Sell
dated November 18, 1985[1] and March 10, 1986[2] covering the properties,
Jambrich and respondent were referred to as the buyers.  A Deed of Absolute Sale
dated November 16, 1987[3] was likewise issued in their favor. However, when the
Deed of Absolute Sale was presented for registration before the Register of Deeds,
registration was refused on the ground that Jambrich was an alien and could not
acquire alienable lands of the public domain.  Consequently, Jambrich's name was
erased from the document.  But it could be noted that his signature remained on
the left hand margin of page 1, beside respondent's signature as buyer on page 3,
and at the bottom of page 4 which is the last page.  Transfer Certificate of Title
(TCT) Nos. 24790, 24791 and 24792 over the properties were issued in
respondent's name alone.

Jambrich also formally adopted respondent's two sons in Sp. Proc. No. 39-MAN,
[4]
 and per Decision of the Regional Trial Court of Mandaue City dated May 5, 1988.
[5]

However, the idyll lasted only until April 1991. By then, respondent found a new
boyfriend while Jambrich began to live with another woman in Danao City. 
Jambrich supported respondent's sons for only two months after the break up.

Jambrich met petitioner Camilo F. Borromeo sometime in 1986.  Petitioner was

engaged in the real estate business.  He also built and repaired speedboats as a
hobby.  In 1989, Jambrich purchased an engine and some accessories for his boat
from petitioner, for which he became indebted to the latter for about P150,000.00. 
To pay for his debt, he sold his rights and interests in the Agro-Macro properties to
petitioner for P250,000, as evidenced by a "Deed of Absolute Sale/Assignment."[6] 
On July 26, 1991, when petitioner sought to register the deed of assignment, he
discovered that titles to the three lots have been transferred in the name of
respondent, and that the subject property has already been mortgaged.

On August 2, 1991, petitioner filed a complaint against respondent for recovery of

real property before the Regional Trial Court of Mandaue City.  Petitioner alleged
that the Contracts to Sell dated November 18, 1985 and March 10, 1986 and the
Deed of Absolute Sale dated November 16, 1987 over the properties which
identified both Jambrich and respondent as buyers do not reflect the true
agreement of the parties since respondent did not pay a single centavo of the
purchase price and was not in fact a buyer; that it was Jambrich alone who paid for
the properties using his exclusive funds; that Jambrich was the real and absolute
owner of the properties; and, that petitioner acquired absolute ownership by virtue
of the Deed of Absolute Sale/Assignment dated July 11, 1991 which Jambrich
executed in his favor.

In her Answer, respondent belied the allegation that she did not pay a single
centavo of the purchase price.  On the contrary, she claimed that she "solely and
exclusively used her own personal funds to defray and pay for the purchase price of
the subject lots in question," and that Jambrich, being an alien, was prohibited to
acquire or own real property in the Philippines.
At the trial, respondent presented evidence showing her alleged financial capacity
to buy the disputed property with money from a supposed copra business. 
Petitioner, in turn, presented Jambrich as his witness and documentary evidence
showing the substantial salaries which Jambrich received while still employed by the
Austrian company, Simmering-Graz Panker A.G.
In its decision, the court a quo found--

Evidence on hand clearly show that at the time of the purchase and acquisition of
[the] properties under litigation that Wilhelm Jambrich was still working and
earning much. This fact of Jambrich earning much is not only supported by
documentary evidence but also by the admission made by the defendant
Antoniet[t]a Opalla.  So that, Jambrich's financial capacity to acquire and
purchase the properties . . . is not disputed.[7]

x   x   x

On the other hand, evidence . . . clearly show that before defendant met Jambrich
sometime in the latter part of 1984, she was only working as a waitress at the St.
Moritz Hotel with an income of P1,000.00 a month and was . . . renting and living
only in . . . [a] room at . . . [a] squatter area at Gorordo Ave., Cebu City; that
Jambrich took pity of her and the situation of her children that he offered her a
better life which she readily accepted.  In fact, this miserable financial situation of
hers and her two children . . . are all stated and reflected in the Child Study Report
dated April 20, 1983 (Exhs. "G" and "G-1") which facts she supplied to the Social
Worker who prepared the same when she was personally interviewed by her in
connection with the adoption of her two children by Wilhelm Jambrich.  So that, if
such facts were not true because these are now denied by her . . . and if it was also
true that during this time she was already earning as much as  P8,000.00 to
P9,000.00 as profit per month from her copra business, it would be highly
unbelievable and impossible for her to be living only in such a miserable condition
since it is the observation of this Court that she is not only an extravagant but also
an expensive person and not thrifty as she wanted to impress this Court in order to
have a big saving as clearly shown by her actuation when she was already
cohabiting and living with Jambrich that according to her . . . the allowance given . .
. by him in the amount of $500.00 a month is not enough to maintain the education
and maintenance of  her children.[8]

This being the case, it is highly improbable and impossible that she could
acquire the properties under litigation or could contribute any amount for
their acquisition which according to her is worth more than P700,000.00 when
while she was working as [a] waitress at St. Moritz Hotel earning
P1,000.00 a month as salary and tips of more or less P2,000.00 she could
not even provide [for] the daily needs of her family so much so that it is
safe to conclude that she was really in financial distress when she met and
accepted the offer of Jambrich to come and live with him because that was
a big financial opportunity for her and her children who were already
abandoned by her husband.[9]
x   x   x

The only probable and possible reason why her name appeared and was included in
[the contracts to sell dated November 18, 1985 and March 10, 1986 and finally, the
deed of absolute sale dated November 16, 1987] as buyer is because as observed
by the Court, she being a scheming and exploitive woman, she has taken
advantage of the goodness of Jambrich who at that time was still bewitched by her
beauty, sweetness, and good attitude shown by her to him since he could still very
well provide for everything she needs, he being earning (sic) much yet at that
time.  In fact, as observed by this Court, the acquisition of these properties under
litigation was at the time when their relationship was still going smoothly and
harmoniously.[10] [Emphasis supplied.]

The dispositive portion of the Decision states:

WHEREFORE, . . . Decision is hereby rendered in favor of the plaintiff and against

the defendant Antoniet[t]a Opalla by:

1) Declaring plaintiff as the owner in fee simple over the residential house of strong
materials and three parcels of land designated as Lot Nos. 1, 3 and 5 which are
covered by TCT Nos. 24790, 24791 and 24792 issued by the Register of Deeds of
Mandaue City;

2) Declaring as null and void TCT Nos. 24790, 24791 and 24792 issued in the name
of defendant Antoniet[t]a Descallar by the Register of Deeds of Mandaue City;

3)  Ordering the Register of Deeds of Mandaue City to cancel TCT Nos. 24790,
24791 and 24792 in the name of defendant Antoniet[t]a Descallar and to issue new
ones in the name of plaintiff Camilo F. Borromeo;

4)  Declaring the contracts now marked as Exhibits "I," "K" and "L" as avoided
insofar as they appear to convey rights and interests over the properties in question
to the defendant Antoniet[t]a Descallar;

5)  Ordering the defendant to pay plaintiff attorney's fees in the amount of
P25,000.00 and litigation expenses in the amount of P10,000.00; and,

6)  To pay the costs.[11]

Respondent appealed to the Court of Appeals.  In a Decision dated April 10, 2002,
[12]
 the appellate court reversed the decision of the trial court.  In ruling for the
respondent, the Court of Appeals held:

We disagree with the lower court's conclusion.  The circumstances involved in the
case cited by the lower court and similar cases decided on by the Supreme Court
which upheld the validity of the title of the subsequent Filipino purchasers are
absent in the case at bar.  It should be noted that in said cases, the title to the
subject property has been issued in the name of the alien transferee (Godinez et
al., vs. Fong Pak Luen et al., 120 SCRA 223 citing Krivenko vs. Register of Deeds of
Manila, 79 Phils. 461; United Church Board for World Ministries vs. Sebastian, 159
SCRA 446, citing the case of Sarsosa Vda. De Barsobia vs. Cuenco, 113 SCRA 547;
Tejido vs. Zamacoma, 138 SCRA 78).  In the case at bar, the title of the subject
property is not in the name of Jambrich but in the name of defendant-appellant. 
Thus, Jambrich could not have transferred a property he has no title thereto.[13]
Petitioner's motion for reconsideration was denied.

Hence, this petition for review.

Petitioner assigns the following errors:

I. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN DISREGARDING

RESPONDENT'S JUDICIAL ADMISSION AND OTHER OVERWHELMING
EVIDENCE ESTABLISHING JAMBRICH'S PARTICIPATION, INTEREST AND
OWNERSHIP OF THE PROPERTIES IN QUESTION AS FOUND BY THE
HONORABLE TRIAL COURT.

II. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT

JAMBRICH HAS NO TITLE TO THE PROPERTIES IN QUESTION AND MAY NOT
THEREFORE TRANSFER AND ASSIGN ANY RIGHTS AND INTERESTS IN FAVOR
OF PETITIONER.

III. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN REVERSING THE

WELL-REASONED DECISION OF THE TRIAL COURT AND IN IMPOSING
DOUBLE COSTS AGAINST HEREIN PETITIONER (THEN, PLAINTIFF-
APPELLEE).[14]

First, who purchased the subject properties?

The evidence clearly shows, as pointed out by the trial court, who between
respondent and Jambrich possesses the financial capacity to acquire the properties
in dispute.  At the time of the acquisition of the properties in 1985 to 1986,
Jambrich was gainfully employed at Simmering-Graz Panker A.G., an Austrian
company.  He was earning an estimated monthly salary of P50,000.00.  Then,
Jambrich was assigned to Syria for almost one year where his monthly salary was
approximately P90,000.00.

On the other hand, respondent was employed as a waitress from 1984 to 1985 with
a monthly salary of not more than P1,000.00. In 1986, when the parcels of land
were acquired, she was unemployed, as admitted by her during the pre-trial
conference.  Her allegations of income from a copra business were
unsubstantiated.  The supposed copra business was actually the business of her
mother and their family, with ten siblings.  She has no license to sell copra, and had
not filed any income tax return. All the motorized bancas of her mother were lost to
fire, and the last one left standing was already scrap. Further, the Child Study
Report[15] submitted by the Department of Social Welfare and Development (DSWD)
in the adoption proceedings of respondent's two sons by Jambrich disclosed that:
Antonietta tried all types of job to support the children until she was accepted as a
waitress at St. Moritz Restaurant in 1984. At first she had no problem with money
because most of the customers of St. Moritz are (sic) foreigners and they gave
good tips but towards the end of 1984 there were no more foreigners coming
because of the situation in the Philippines at that time. Her financial problem
started then. She was even renting a small room in a squatters area in Gorordo
Ave., Cebu City. It was during her time of great financial distress that she met
Wilhelm Jambrich who later offered her a decent place for herself and her children.
[16]

The DSWD Home Study Report[17] further disclosed that:

[Jambrich] was then at the Restaurant of St. Moritz when he saw Antonietta
Descallar, one of the waitresses of the said Restaurants. He made friends with the
girl and asked her to tutor him in [the] English language. Antonietta accepted the
offer because she was in need of additional income to support [her] 2 young
children who were abandoned by their father. Their session was agreed to be
scheduled every afternoon at the residence of Antonietta in the squatters area in
Gorordo Avenue, Cebu City. The Austrian was observing the situation of the family
particularly the children who were malnourished. After a few months sessions, Mr.
Jambrich offered to transfer the family into a decent place. He told Antonietta that
the place is not good for the children. Antonietta who was miserable and financially
distressed at that time accepted the offer for the sake of the children.[18]
Further, the following additional pieces of evidence point to Jambrich as the source
of fund used to purchase the three parcels of land, and to construct the house
thereon:

(1)     Respondent Descallar herself affirmed under oath, during her re-direct
examination and during the proceedings for the adoption of her minor children, that
Jambrich was the owner of the properties in question, but that his name was
deleted in the Deed of Absolute Sale because of legal constraints. Nonetheless, his
signature remained in the deed of sale, where he signed as buyer.

(2)     The money used to pay the subject parcels of land in installments was in
postdated checks issued by Jambrich.  Respondent has never opened any account
with any bank.  Receipts of the installment payments were also in the name of
Jambrich and respondent.

(3)     In 1986-1987, respondent lived in Syria with Jambrich and her two children
for ten months, where she was completely under the support of Jambrich.

(4)     Jambrich executed a Last Will and Testament, where he, as owner,
bequeathed the subject properties to respondent.

Thus, Jambrich has all authority to transfer all his rights, interests and participation
over the subject properties to petitioner by virtue of the Deed of Assignment he
executed on July 11, 1991.

Well-settled is the rule that this Court is not a trier of facts.  The findings of fact of
the trial court are accorded great weight and respect, if not finality by this Court,
subject to a number of exceptions.  In the instant case, we find no reason to
disturb the factual findings of the trial court.  Even the appellate court did not
controvert the factual findings of the trial court.  They differed only in their
conclusions of law.

Further, the fact that the disputed properties were acquired during the couple's
cohabitation also does not help respondent.  The rule that co-ownership applies to a
man and a woman living exclusively with each other as husband and wife without
the benefit of marriage, but are otherwise capacitated to marry each other, does
not apply.[19]  In the instant case, respondent was still legally married to another
when she and Jambrich lived together.  In such an adulterous relationship, no co-
ownership exists between the parties. It is necessary for each of the partners to
prove his or her actual contribution to the acquisition of property in order to be able
to lay claim to any portion of it.  Presumptions of co-ownership and equal
contribution do not apply.[20]

Second, we dispose of the issue of registration of the properties in the name of

respondent alone.  Having found that the true buyer of the disputed house and lots
was the Austrian Wilhelm Jambrich, what now is the effect of registration of the
properties in the name of respondent?

It is settled that registration is not a mode of acquiring ownership.[21] It is only a

means of confirming the fact of its existence with notice to the world at large.[22] 
Certificates of title are not a source of right.  The mere possession of a title does
not make one the true owner of the property.  Thus, the mere fact that respondent
has the titles of the disputed properties in her name does not necessarily,
conclusively and absolutely make her the owner. The rule on indefeasibility of title
likewise does not apply to respondent.  A certificate of title implies that the title is
quiet,[23] and that it is perfect, absolute and indefeasible.[24]  However, there are
well-defined exceptions to this rule, as when the transferee is not a holder in good
faith and did not acquire the subject properties for a valuable consideration.[25]  This
is the situation in the instant case.  Respondent did not contribute a single centavo
in the acquisition of the properties.  She had no income of her own at that time, nor
did she have any savings.  She and her two sons were then fully supported by
Jambrich.

Respondent argued that aliens are prohibited from acquiring private land.  This is
embodied in Section 7, Article XII of the 1987 Constitution,[26] which is basically a
reproduction of Section 5, Article XIII of the 1935 Constitution,[27] and Section 14,
Article XIV of the 1973 Constitution.[28]  The capacity to acquire private land is
dependent on the capacity "to acquire or hold lands of the public domain."  Private
land may be transferred only to individuals or entities "qualified to acquire or hold
lands of the public domain."  Only Filipino citizens or corporations at least 60% of
the capital of which is owned by Filipinos are qualified to acquire or hold lands of
the public domain.  Thus, as the rule now stands, the fundamental law explicitly
prohibits non-Filipinos from acquiring or holding title to private lands, except only
by way of legal succession or if the acquisition was made by a former natural-born
citizen.[29]
Therefore, in the instant case, the transfer of land from Agro-Macro Development
Corporation to Jambrich, who is an Austrian, would have been declared invalid if
challenged, had not Jambrich conveyed the properties to petitioner who is a Filipino
citizen.  In United Church Board for World Ministries v. Sebastian,[30] the
Court reiterated the consistent ruling in a number of cases[31] that if land is invalidly
transferred to an alien who subsequently becomes a Filipino citizen or transfers it to
a Filipino, the flaw in the original transaction is considered cured and the title of the
transferee is rendered valid.  Applying United Church Board for World
Ministries, the trial court ruled in favor of petitioner, viz.:
[W]hile the acquisition and the purchase of (sic) Wilhelm Jambrich of the properties
under litigation [were] void ab initio since [they were] contrary to the Constitution
of the Philippines, he being a foreigner, yet, the acquisition of these properties by
plaintiff who is a Filipino citizen from him, has cured the flaw in the original
transaction and the title of the transferee is valid.
The trial court upheld the sale by Jambrich in favor of petitioner and ordered the
cancellation of the TCTs in the name of respondent.  It declared petitioner as owner
in fee simple of the residential house of strong materials and three parcels of land
designated as Lot Nos. 1, 3 and 5, and ordered the Register of Deeds of Mandaue
City to issue new certificates of title in his name.  The trial court likewise ordered
respondent to pay petitioner P25,000 as attorney's fees and P10,000 as litigation
expenses, as well as the costs of suit.

We affirm the Regional Trial Court.

The rationale behind the Court's ruling in United Church Board for World
Ministries, as reiterated in subsequent cases,[32] is this - since the ban on aliens is
intended to preserve the nation's land for future generations of Filipinos, that aim is
achieved by making lawful the acquisition of real estate by aliens who became
Filipino citizens by naturalization or those transfers made by aliens to Filipino
citizens.  As the property in dispute is already in the hands of a qualified person, a
Filipino citizen, there would be no more public policy to be protected. The objective
of the constitutional provision to keep our lands in Filipino hands has been
achieved.

IN VIEW WHEREOF, the petition is GRANTED.  The Decision of the Court of

Appeals in C.A. G.R. CV No. 42929 dated April 10, 2002 and its Resolution dated
July 8, 2003 are REVERSED and SET ASIDE.  The Decision of the Regional Trial
Court of Mandaue City in Civil Case No. MAN-1148 is REINSTATED.

SO ORDERED.

Carpio, Corona, Leonardo-De Castro, and Brion, JJ., concur.

 FIRST DIVISION
[ G.R. No. 171914, July 23, 2014 ]
SOLEDAD L. LAVADIA, PETITIONER, VS. HEIRS OF JUAN
LUCES LUNA, REPRESENTED BY GREGORIO Z. LUNA AND
EUGENIA ZABALLERO-LUNA, RESPONDENTS.

DECISION

BERSAMIN, J.: 

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

The Case

The petitioner, the second wife of the late Atty. Juan Luces Luna, appeals the
adverse decision promulgated on November 11, 2005,[1]whereby the Court of
Appeals (CA) affirmed with modification the decision rendered on August 27, 2001
by the Regional Trial Court (RTC), Branch 138, in Makati City.[2] The CA thereby
denied her right in the 25/100 pro indiviso share of the husband in a condominium
unit, and in the law books of the husband acquired during the second marriage.

Antecedents

The antecedent facts were summarized by the CA as follows:

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

On January 12, 1976, ATTY. LUNA obtained a divorce decree of his marriage with
EUGENIA from the Civil and Commercial Chamber of the First Circumscription of the
Court of First Instance of Sto. Domingo, Dominican Republic. Also in Sto. Domingo,
Dominican Republic, on the same date, ATTY. LUNA contracted another marriage,
this time with SOLEDAD. Thereafter, ATTY. LUNA and SOLEDAD returned to the
Philippines and lived together as husband and wife until 1987.

Sometime in 1977, ATTY. LUNA organized a new law firm named: Luna, Puruganan,
Sison and Ongkiko (LUPSICON) where ATTY. LUNA was the managing partner.

On February 14, 1978, LUPSICON through ATTY. LUNA purchased from Tandang
Sora Development Corporation the 6th Floor of Kalaw-Ledesma Condominium
Project (condominium unit) at Gamboa St., Makati City, consisting of 517.52 square
meters, for P1,449,056.00, to be paid on installment basis for 36 months starting
on April 15, 1978. Said condominium unit was to be used as law office of
LUPSICON. After full payment, the Deed of Absolute Sale over the condominium
unit was executed on July 15, 1983, and CCT No. 4779 was issued on August 10,
1983, which was registered bearing the following names:
“JUAN LUCES LUNA, married to Soledad L. Luna (46/100); MARIO E. ONGKIKO,
married to Sonia P.G. Ongkiko (25/100); GREGORIO R. PURUGANAN, married to
Paz A. Puruganan (17/100); and TERESITA CRUZ SISON, married to Antonio J.M.
Sison (12/100)  x x x”
Subsequently, 8/100 share of ATTY. LUNA and 17/100 share of Atty. Gregorio R.
Puruganan in the condominium unit was sold to Atty. Mario E. Ongkiko, for which a
new CCT No. 21761 was issued on February 7, 1992 in the following names:
“JUAN LUCES LUNA, married to Soledad L. Luna (38/100); MARIO E. ONGKIKO,
married to Sonia P.G. Ongkiko (50/100); TERESITA CRUZ SISON, married to
Antonio J.M. Sison (12/100) x x x”
Sometime in 1992, LUPSICON was dissolved and the condominium unit was
partitioned by the partners but the same was still registered in common under CCT
No. 21716. The parties stipulated that the interest of ATTY. LUNA over the
condominium unit would be 25/100 share.

ATTY. LUNA thereafter established and headed another law firm with Atty. Renato
G. De la Cruz and used a portion of the office condominium unit as their office. The
said law firm lasted until the death of ATTY. JUAN on July 12, 1997.

After the death of ATTY. JUAN, his share in the condominium unit including the
lawbooks, office furniture and equipment found therein were taken over by
Gregorio Z. Luna, ATTY. LUNA’s son of the first marriage. Gregorio Z. Luna then
leased out the 25/100 portion of the condominium unit belonging to his father to
Atty. Renato G. De la Cruz who established his own law firm named Renato G. De la
Cruz & Associates.
The 25/100 pro-indiviso share of ATTY. Luna in the condominium unit as well as the
law books, office furniture and equipment became the subject of the complaint filed
by SOLEDAD against the heirs of ATTY. JUAN with the RTC of Makati City, Branch
138, on September 10, 1999, docketed as Civil Case No. 99-1644. The complaint
alleged that the subject properties were acquired during the existence of the
marriage between ATTY. LUNA and SOLEDAD through their joint efforts that since
they had no children, SOLEDAD became co-owner of the said properties upon the
death of ATTY. LUNA to the extent of ¾ pro-indiviso share consisting of her ½
share in the said properties plus her ½ share in the net estate of ATTY. LUNA which
was bequeathed to her in the latter’s last will and testament; and that the heirs of
ATTY. LUNA through Gregorio Z. Luna excluded SOLEDAD from her share in the
subject properties. The complaint prayed that SOLEDAD be declared the owner of
the ¾ portion of the subject properties; that the same be partitioned; that an
accounting of the rentals on the condominium unit pertaining to the share of
SOLEDAD be conducted; that a receiver be appointed to preserve ad administer the
subject properties; and that the heirs of ATTY. LUNA be ordered to pay attorney’s
fees and costs of the suit to SOLEDAD.[3]

Ruling of the RTC

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

WHEREFORE, judgment is rendered as follows:

(a) The 24/100 pro-indiviso share in the condominium unit located at the SIXTH
FLOOR of the KALAW LEDESMA CONDOMINIUM PROJECT covered by Condominium
Certificate of Title No. 21761 consisting of FIVE HUNDRED SEVENTEEN (517/100)
SQUARE METERS is adjudged to have been acquired by Juan Lucas Luna through
his sole industry;

(b) Plaintiff has no right as owner or under any other concept over the
condominium unit, hence the entry in Condominium Certificate of Title No. 21761 of
the Registry of Deeds of Makati with respect to the civil status of Juan Luces Luna
should be changed from “JUAN LUCES LUNA married to Soledad L. Luna” to “JUAN
LUCES LUNA married to Eugenia Zaballero Luna”;

(c) Plaintiff is declared to be the owner of the books Corpus Juris, Fletcher on
Corporation, American Jurisprudence and Federal Supreme Court Reports found in
the condominium unit and defendants are ordered to deliver them to the plaintiff as
soon as appropriate arrangements have been made for transport and storage.

No pronouncement as to costs.

SO ORDERED.[5]

Decision of the CA
 Both parties appealed to the CA.[6]

On her part, the petitioner assigned the following errors to the RTC, namely:

I. THE LOWER COURT ERRED IN RULING THAT THE CONDOMINIUM UNIT WAS
ACQUIRED THRU THE SOLE INDUSTRY OF ATTY. JUAN LUCES LUNA;

II. THE LOWER COURT ERRED IN RULING THAT PLAINTIFF-APPELLANT DID NOT
CONTRIBUTE MONEY FOR THE ACQUISITION OF THE CONDOMINIUM UNIT;

III. THE LOWER COURT ERRED IN GIVING CREDENCE TO PORTIONS OF THE

TESTIMONY OF GREGORIO LUNA, WHO HAS NO ACTUAL KNOWLEDGE OF
THE ACQUISITION OF THE UNIT, BUT IGNORED OTHER PORTIONS OF HIS
TESTIMONY FAVORABLE TO THE PLAINTIFF-APPELLANT;

IV. THE LOWER COURT ERRED IN NOT GIVING SIGNIFICANCE TO THE FACT
THAT THE CONJUGAL PARTNERSHIP BETWEEN LUNA AND INTERVENOR-
APPELLANT WAS ALREADY DISSOLVED AND LIQUIDATED PRIOR TO THE
UNION OF PLAINTIFF-APPELLANT AND LUNA;

V. THE LOWER COURT ERRED IN GIVING UNDUE SIGNIFICANCE TO THE

ABSENCE OF THE DISPOSITION OF THE CONDOMINIUM UNIT IN THE
HOLOGRAPHIC WILL OF THE PLAINTIFF-APPELLANT;

VI. THE LOWER COURT ERRED IN GIVING UNDUE SIGNIFICANCE TO THE FACT
THAT THE NAME OF PLAINTIFF-APPELLANT DID NOT APPEAR IN THE DEED
OF ABSOLUTE SALE EXECUTED BY TANDANG SORA DEVELOPMENT
CORPORATION OVER THE CONDOMINIUM UNIT;

VII. THE LOWER COURT ERRED IN RULING THAT NEITHER ARTICLE 148 OF THE
FAMILY CODE NOR ARTICLE 144 OF THE CIVIL CODE OF THE PHILIPPINES
ARE APPLICABLE;

VIII. THE LOWER COURT ERRED IN NOT RULING THAT THE CAUSE OF ACTION OF
THE INTERVENOR-APPELLANT HAS BEEN BARRED BY PESCRIPTION AND
LACHES; and

IX. THE LOWER COURT ERRED IN NOT EXPUNGING/DISMISSING THE

INTERVENTION FOR FAILURE OF INTERVENOR-APPELLANT TO PAY FILING
FEE.[7]

In contrast, the respondents attributed the following errors to the trial court, to wit:

I. THE LOWER COURT ERRED IN HOLDING THAT CERTAIN FOREIGN LAW

BOOKS IN THE LAW OFFICE OF ATTY. LUNA WERE BOUGHT WITH THE USE
OF PLAINTIFF’S MONEY;
 II. THE LOWER COURT ERRED IN HOLDING THAT PLAINTIFF PROVED BY
PREPONDERANCE OF EVIDENCE (HER CLAIM OVER) THE SPECIFIED
FOREIGN LAW BOOKS FOUND IN ATTY. LUNA’S LAW OFFICE; and

III. THE LOWER COURT ERRED IN NOT HOLDING THAT, ASSUMING PLAINTIFF
PAID FOR THE SAID FOREIGN LAW BOOKS, THE RIGHT TO RECOVER THEM
HAD PRESCRIBED AND BARRED BY LACHES AND ESTOPPEL.[8]

On November 11, 2005, the CA promulgated its assailed modified decision,

[9]
 holding and ruling:

EUGENIA, the first wife, was the legitimate wife of ATTY. LUNA until the latter’s
death on July 12, 1997. The absolute divorce decree obtained by ATTY. LUNA in the
Dominican Republic did not terminate his prior marriage with EUGENIA because
foreign divorce between Filipino citizens is not recognized in our jurisdiction. x x
x[10]

xxxx

WHEREFORE, premises considered, the assailed August 27, 2001 Decision of the
RTC of Makati City, Branch 138, is hereby MODIFIED as follows:

(a) The 25/100 pro-indiviso share in the condominium unit at the SIXTH FLOOR of
the KALAW LEDESMA CONDOMINIUM PROJECT covered by Condominium Certificate
of Title No. 21761 consisting of FIVE HUNDRED SEVENTEEN (517/100) (sic)
SQUARE METERS is hereby adjudged to defendants-appellants, the heirs of Juan
Luces Luna and Eugenia Zaballero-Luna (first marriage), having been acquired from
the sole funds and sole industry of Juan Luces Luna while marriage of Juan Luces
Luna and Eugenia Zaballero-Luna (first marriage) was still subsisting and valid;

(b)  Plaintiff-appellant Soledad Lavadia has no right as owner or under any other
concept over the condominium unit, hence the entry in Condominium Certificate of
Title No. 21761 of the Registry of Deeds of Makati with respect to the civil status of
Juan Luces Luna should be changed from “JUAN LUCES LUNA married to Soledad L.
Luna” to “JUAN LUCES LUNA married to Eugenia Zaballero Luna”;

(c) Defendants-appellants, the heirs of Juan Luces Luna and Eugenia Zaballero-
Luna (first marriage) are hereby declared to be the owner of the books Corpus
Juris, Fletcher on Corporation, American Jurisprudence and Federal Supreme Court
Reports found in the condominium unit.

No pronouncement as to costs.
SO ORDERED.[11]

On March 13, 2006,[12] the CA denied the petitioner’s motion for reconsideration.[13]

Issues
In this appeal, the petitioner avers in her petition for review on certiorari that:

A. The Honorable Court of Appeals erred in ruling that the Agreement for
Separation and Property Settlement executed by Luna and Respondent
Eugenia was unenforceable; hence, their conjugal partnership was not
dissolved and liquidated;

B. The Honorable Court of Appeals erred in not recognizing the Dominican

Republic court’s approval of the Agreement;

C. The Honorable Court of Appeals erred in ruling that Petitioner failed to

adduce sufficient proof of actual contribution to the acquisition of purchase of
the subject condominium unit; and

D. The Honorable Court of Appeals erred in ruling that Petitioner was not
entitled to the subject law books.[14]

The decisive question to be resolved is who among the contending parties should be
entitled to the 25/100 pro indiviso  share in the condominium unit; and to the law
books (i.e., Corpus Juris, Fletcher on Corporation, American Jurisprudence and
Federal Supreme Court Reports).

The resolution of the decisive question requires the Court to ascertain the law that
should determine, firstly, whether the divorce between Atty. Luna and Eugenia
Zaballero-Luna (Eugenia) had validly dissolved the first marriage; and, secondly,
whether the second marriage entered into by the late Atty. Luna and the petitioner
entitled the latter to any rights in property.

Ruling of the Court

We affirm the modified decision of the CA.

1.
Atty. Luna’s first marriage with Eugenia
subsisted up to the time of his death

The first marriage between Atty. Luna and Eugenia, both Filipinos, was solemnized
in the Philippines on September 10, 1947. The law in force at the time of the
solemnization was the Spanish Civil Code, which adopted the nationality rule.
The Civil Code  continued to follow the nationality rule, to the effect that Philippine
laws relating to family rights and duties, or to the status, condition and legal
capacity of persons were binding upon citizens of the Philippines, although living
abroad.[15] Pursuant to the nationality rule, Philippine laws governed this case by
virtue of both Atty. Luna and Eugenio having remained Filipinos until the death of
Atty. Luna on July 12, 1997 terminated their marriage.
From the time of the celebration of the first marriage on September 10, 1947 until
the present, absolute divorce between Filipino spouses has not been recognized in
the Philippines. The non-recognition of absolute divorce between Filipinos has
remained even under the Family Code,[16] even if either or both of the spouses are
residing abroad.[17] Indeed, the only two types of defective marital unions under our
laws have been the void and the voidable marriages. As such, the remedies against
such defective marriages have been limited to the declaration of nullity of the
marriage and the annulment of the marriage.

It is true that on January 12, 1976, the Court of First Instance (CFI) of Sto.
Domingo in the Dominican Republic issued the Divorce Decree dissolving the first
marriage of Atty. Luna and Eugenia.[18] Conformably with the nationality rule,
however, the divorce, even if voluntarily obtained abroad, did not dissolve the
marriage between Atty. Luna and Eugenia, which subsisted up to the time of his
death on July 12, 1997. This finding conforms to the Constitution, which
characterizes marriage as an inviolable social institution,[19] and regards it as a
special contract of permanent union between a man and a woman for the
establishment of a conjugal and family life.[20] The non-recognition of absolute
divorce in the Philippines is a manifestation of the respect for the sanctity of the
marital union especially among Filipino citizens. It affirms that the extinguishment
of a valid marriage must be grounded only upon the death of either spouse, or
upon a ground expressly provided by law. For as long as this public policy on
marriage between Filipinos exists, no divorce decree dissolving the marriage
between them can ever be given legal or judicial recognition and enforcement in
this jurisdiction.

2.
The Agreement for Separation and Property Settlement
was void for lack of court approval

The petitioner insists that the Agreement for Separation and Property

Settlement (Agreement) that the late Atty. Luna and Eugenia had entered into and
executed in connection with the divorce proceedings before the CFI of Sto. Domingo
in the Dominican Republic to dissolve and liquidate their conjugal partnership was
enforceable against Eugenia. Hence, the CA committed reversible error in decreeing
otherwise.

The insistence of the petitioner was unwarranted.

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

Article 119. The future spouses may in the marriage settlements agree
upon absolute or relative community of property, or upon complete
separation of property, or upon any other regime. In the absence of
marriage settlements, or when the same are void, the system of relative
community or conjugal partnership of gains as established in this Code,
shall govern the property relations between husband and wife.

Article 142 of the Civil Code has defined a conjugal partnership of gains thusly:

Article 142. By means of the conjugal partnership of gains the husband and wife
place in a common fund the fruits of their separate property and the income from
their work or industry, and divide equally, upon the dissolution of the marriage or of
the partnership, the net gains or benefits obtained indiscriminately by either spouse
during the marriage.

The conjugal partnership of gains subsists until terminated for any of various
causes of termination enumerated in Article 175 of the Civil Code, viz:

Article 175. The conjugal partnership of gains terminates:

(1) Upon the death of either spouse;

(2) When there is a decree of legal separation;

(3) When the marriage is annulled;

(4) In case of judicial separation of property under Article 191.

The mere execution of the Agreement by Atty. Luna and Eugenia did not per se
dissolve and liquidate their conjugal partnership of gains. The approval of the
Agreement by a competent court was still required under Article 190 and Article
191 of the Civil Code, as follows:

Article 190. In the absence of an express declaration in the marriage settlements,

the separation of property between spouses during the marriage shall not take
place save in virtue of a judicial order. (1432a)

Article 191. The husband or the wife may ask for the separation of property, and it
shall be decreed when the spouse of the petitioner has been sentenced to a penalty
which carries with it civil interdiction, or has been declared absent, or when legal
separation has been granted.

xxxx

The husband and the wife may agree upon the dissolution of the conjugal
partnership during the marriage, subject to judicial approval. All the creditors of
the husband and of the wife, as well as of the conjugal partnership shall be notified
of any petition for judicial approval or the voluntary dissolution of the conjugal
partnership, so that any such creditors may appear at the hearing to safeguard his
interests. Upon approval of the petition for dissolution of the conjugal partnership,
the court shall take such measures as may protect the creditors and other third
persons.

After dissolution of the conjugal partnership, the provisions of articles 214 and 215
shall apply. The provisions of this Code concerning the effect of partition stated in
articles 498 to 501 shall be applicable. (1433a)

But was not the approval of the Agreement by the CFI of Sto. Domingo in the
Dominican Republic sufficient in dissolving and liquidating the conjugal partnership
of gains between the late Atty. Luna and Eugenia?

The query is answered in the negative. There is no question that the approval took
place only as an incident of the action for divorce instituted by Atty. Luna and
Eugenia, for, indeed, the justifications for their execution of the Agreement were
identical to the grounds raised in the action for divorce.[21] With the divorce not
being itself valid and enforceable under Philippine law for being contrary to
Philippine public policy and public law, the approval of the Agreement was not also
legally valid and enforceable under Philippine law. Consequently, the conjugal
partnership of gains of Atty. Luna and Eugenia subsisted in the lifetime of their
marriage.

3.
Atty. Luna’s marriage with Soledad, being bigamous,
was void; properties acquired during their marriage
were governed by the rules on co-ownership

What law governed the property relations of the second marriage between Atty.
Luna and Soledad?

The CA expressly declared that Atty. Luna’s subsequent marriage to Soledad on

January 12, 1976 was void for being bigamous,[22] on the ground that the marriage
between Atty. Luna and Eugenia had not been dissolved by the Divorce Decree
rendered by the CFI of Sto. Domingo in the Dominican Republic but had subsisted
until the death of Atty. Luna on July 12, 1997.

The Court concurs with the CA.

In the Philippines, marriages that are bigamous, polygamous, or incestuous are

void. Article 71 of the Civil Code clearly states:

Article 71. All marriages performed outside the Philippines in accordance with the
laws in force in the country where they were performed, and valid there as such,
shall also be valid in this country, except bigamous, polygamous, or
incestuous marriages as determined by Philippine law.

Bigamy is an illegal marriage committed by contracting a second or subsequent

marriage before the first marriage has been legally dissolved, or before the absent
spouse has been declared presumptively dead by means of a judgment rendered in
the proper proceedings.[23] A bigamous marriage is considered void ab initio.[24]

Due to the second marriage between Atty. Luna and the petitioner being void ab
initio  by virtue of its being bigamous, the properties acquired during the bigamous
marriage were governed by the rules on co-ownership, conformably with Article 144
of the Civil Code, viz:

Article 144. When a man and a woman live together as husband and wife, but they
are not married, or their marriage is void from the beginning, the property acquired
by either or both of them through their work or industry or their wages and salaries
shall be governed by the rules on co-ownership.(n)

In such a situation, whoever alleges co-ownership carried the burden of proof to

confirm such fact. To establish co-ownership, therefore, it became imperative for
the petitioner to offer proof of her actual contributions in the acquisition of
property. Her mere allegation of co-ownership, without sufficient and competent
evidence, would warrant no relief in her favor. As the Court explained in Saguid v.
Court of Appeals:[25]

In the cases of Agapay v. Palang, and Tumlos v. Fernandez, which involved the

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

As in other civil cases, the burden of proof rests upon the party who, as determined
by the pleadings or the nature of the case, asserts an affirmative issue. Contentions
must be proved by competent evidence and reliance must be had on the strength of
the party’s own evidence and not upon the weakness of the opponent’s defense.
This applies with more vigor where, as in the instant case, the plaintiff was allowed
to present evidence ex parte. The plaintiff is not automatically entitled to the relief
prayed for. The law gives the defendant some measure of protection as the plaintiff
must still prove the allegations in the complaint. Favorable relief can be granted
only after the court is convinced that the facts proven by the plaintiff warrant such
relief. Indeed, the party alleging a fact has the burden of proving it and a mere
allegation is not evidence.[26]

The petitioner asserts herein that she sufficiently proved her actual contributions in
the purchase of the condominium unit in the aggregate amount of at least
P306,572.00, consisting in direct contributions of P159,072.00, and in repaying the
loans Atty. Luna had obtained from Premex Financing and Banco Filipino totaling
P146,825.30;[27] and that such aggregate contributions of P306,572.00
corresponded to almost the entire share of Atty. Luna in the purchase of the
condominium unit amounting to P362,264.00 of the unit’s purchase price of
P1,449,056.00.[28]

The petitioner further asserts that the lawbooks were paid for solely out of her
personal funds, proof of which Atty. Luna had even sent her a “thank you” note;
[29]
 that she had the financial capacity to make the contributions and purchases; and
that Atty. Luna could not acquire the properties on his own due to the meagerness
of the income derived from his law practice.

Did the petitioner discharge her burden of proof on the co-ownership?

In resolving the question, the CA entirely debunked the petitioner’s assertions on

her actual contributions through the following findings and conclusions, namely:

SOLEDAD was not able to prove by preponderance of evidence that her own
independent funds were used to buy the law office condominium and the law books
subject matter in contention in this case – proof that was required for Article 144 of
the New Civil Code and Article 148 of the Family Code to apply – as to cases where
properties were acquired by a man and a woman living together as husband and
wife but not married, or under a marriage which was void ab initio. Under Article
144 of the New Civil Code, the rules on co-ownership would govern. But this was
not readily applicable to many situations and thus it created a void at first because
it applied only if the parties were not in any way incapacitated or were without
impediment to marry each other (for it would be absurd to create a co-ownership
where there still exists a prior conjugal partnership or absolute community between
the man and his lawful wife). This void was filled upon adoption of the Family Code.
Article 148 provided that: only the property acquired by both of the parties through
their actual joint contribution of money, property or industry shall be owned in
common and in proportion to their respective contributions. Such contributions and
corresponding shares were prima facie presumed to be equal. However, for this
presumption to arise, proof of actual contribution was required. The same
rule and presumption was to apply to joint deposits of money and evidence of
credit. If one of the parties was validly married to another, his or her share in the
co-ownership accrued to the absolute community or conjugal partnership existing in
such valid marriage. If the party who acted in bad faith was not validly married to
another, his or her share shall be forfeited in the manner provided in the last
paragraph of the Article 147. The rules on forfeiture applied even if both parties
were in bad faith.

Co-ownership was the exception while conjugal partnership of gains was the strict
rule whereby marriage was an inviolable social institution and divorce decrees are
not recognized in the Philippines, as was held by the Supreme Court in the case
of Tenchavez vs. Escaño, G.R. No. L-19671, November 29, 1965, 15 SCRA 355,
thus:

xxxx
As to the 25/100 pro-indiviso share of ATTY. LUNA in the condominium unit,
SOLEDAD failed to prove that she made an actual contribution to purchase the said
property. She failed to establish that the four (4) checks that she presented were
indeed used for the acquisition of the share of ATTY. LUNA in the condominium unit.
This was aptly explained in the Decision of the trial court, viz.:
“x x x The first check, Exhibit “M” for P55,000.00 payable to Atty. Teresita Cruz
Sison was issued on January 27, 1977, which was thirteen (13) months before the
Memorandum of Agreement, Exhibit “7” was signed. Another check issued on April
29, 1978 in the amount of P97,588.89, Exhibit “P” was payable to Banco Filipino.
According to the plaintiff, this was in payment of the loan of Atty. Luna. The third
check which was for P49,236.00 payable to PREMEX was dated May 19, 1979, also
for payment of the loan of Atty. Luna. The fourth check, Exhibit “M”, for P4,072.00
was dated December 17, 1980. None of the foregoing prove that the amounts
delivered by plaintiff to the payees were for the acquisition of the subject
condominium unit. The connection was simply not established. x x x”
SOLEDAD’s claim that she made a cash contribution of P100,000.00 is
unsubstantiated. Clearly, there is no basis for SOLEDAD’s claim of co-ownership
over the 25/100 portion of the condominium unit and the trial court correctly found
that the same was acquired through the sole industry of ATTY. LUNA, thus:

“The Deed of Absolute Sale, Exhibit “9”, covering the condominium unit was in the
name of Atty. Luna, together with his partners in the law firm. The name of the
plaintiff does not appear as vendee or as the spouse of Atty. Luna. The same was
acquired for the use of the Law firm of Atty. Luna. The loans from Allied Banking
Corporation and Far East Bank and Trust Company were loans of Atty. Luna and his
partners and plaintiff does not have evidence to show that she paid for them fully
or partially. x x x”

The fact that CCT No. 4779 and subsequently, CCT No. 21761 were in the name
of “JUAN LUCES LUNA, married to Soledad L. Luna” was no proof that SOLEDAD
was a co-owner of the condominium unit. Acquisition of title and registration
thereof are two different acts. It is well settled that registration does not confer title
but merely confirms one already existing. The phrase “married to” preceding
“Soledad L. Luna” is merely descriptive of the civil status of ATTY. LUNA.

SOLEDAD, the second wife, was not even a lawyer. So it is but logical that
SOLEDAD had no participation in the law firm or in the purchase of books for the
law firm. SOLEDAD failed to prove that she had anything to contribute and that she
actually purchased or paid for the law office amortization and for the law books. It
is more logical to presume that it was ATTY. LUNA who bought the law office space
and the law books from his earnings from his practice of law rather than
embarrassingly beg or ask from SOLEDAD money for use of the law firm that he
headed.[30]

The Court upholds the foregoing findings and conclusions by the CA both because
they were substantiated by the records and because we have not been shown any
reason to revisit and undo them. Indeed, the petitioner, as the party claiming the
co-ownership, did not discharge her burden of proof. Her mere allegations on her
contributions, not being evidence,[31] did not serve the purpose. In contrast, given
the subsistence of the first marriage between Atty. Luna and Eugenia, the
presumption that Atty. Luna acquired the properties out of his own personal funds
and effort remained. It should then be justly concluded that the properties  in
litis legally pertained to their conjugal partnership of gains as of the time of his
death. Consequently, the sole ownership of the 25/100 pro indiviso share of Atty.
Luna in the condominium unit, and of the lawbooks pertained to the respondents as
the lawful heirs of Atty. Luna.

WHEREFORE, the Court AFFIRMS the decision promulgated on November 11,

2005; and ORDERS the petitioner to pay the costs of suit.

SO ORDERED.

Sereno, C.J., Leonardo-De Castro, Villarama, Jr., and Reyes, JJ., concur.