G.R. No.
193038, March 11, 2015 by the Registry of Deeds of Marikina, Rizal solely under the
JOSEFINA V. NOBLEZA, Petitioner, v. SHIRLEY B.
NUEGA, Respondent.
At bar is a petition for review on certiorari of the
Decision1 dated May 14, 2010 and the Resolution2 dated July
21, 2010 of the Court of Appeals (CA) in CA-G.R. CV No.
70235, which affirmed with modification the assailed
Decision3 dated February 14, 2001 of the Regional Trial Court
(RTC) of Marikina City, Branch 273, in Civil Case No. 96-274-
MK.
The following facts are found by the trial court and affirmed
by the appellate court:
Respondent Shirley B. Nuega (Shirley) was married to
Rogelio A. Nuega (Rogelio) on September 1,
1990.4 Sometime in 1988 when the parties were still
engaged, Shirley was working as a domestic helper in Israel.
Upon the request of Rogelio, Shirley sent him money5 for the
purchase of a residential lot in Marikina where they had
planned to eventually build their home. Rogelio was then
also working abroad as a seaman. The following year, or on
September 13, 1989, Rogelio purchased the subject house
and lot for One Hundred Two Thousand Pesos
(P102,000.00)6 from Rodeanna Realty Corporation. The
subject property has an aggregate area of one hundred
eleven square meters (111 sq. m.) covered by Transfer
Certificate of Title (TCT) No. N-133844.7 Shirley claims that
upon her arrival in the Philippines sometime in 1989, she
settled the balance for the equity over the subject property
with the developer through SSS8financing. She likewise paid
for the succeeding monthly amortizations. On October 19,
1989, TCT No. 1719639 over the subject property was issued
name of Rogelio.
On September 1, 1990, Shirley and Rogelio got married and
lived in the subject property. The following year, Shirley
returned to Israel for work. While overseas, she received
information that Rogelio had brought home another woman,
Monica Escobar, into the family home. She also learned, and
was able to confirm upon her return to the Philippines in May
1992, that Rogelio had been introducing Escobar as his wife.
In June 1992, Shirley filed two cases against Rogelio: one for
Concubinage before the Provincial Prosecution Office of Rizal,
and another for Legal Separation and Liquidation of Property
before the RTC of Pasig City. Shirley later withdrew the
complaint for legal separation and liquidation of property, but
re-filed10 the same on January 29, 1993. In between the
filing of these cases, Shirley learned that Rogelio had the
intention of selling the subject property. Shirley then advised
the interested buyers - one of whom was their neighbor and
petitioner Josefina V. Nobleza (petitioner) - of the existence
of the cases that she had filed against Rogelio and cautioned
them against buying the subject property until the cases are
closed and terminated. Nonetheless, under a Deed of
Absolute Sale11 dated December 29, 1992, Rogelio sold the
subject property to petitioner without Shirley's consent in the
amount of Three Hundred Eighty Thousand Pesos
(P380,000.00), including petitioner's undertaking to assume
the existing mortgage on the property with the National
Home Mortgage Finance Corporation and to pay the real
property taxes due thereon.
Meanwhile, in a Decision12 dated May 16, 1994, the RTC of
Pasig City, Branch 70, granted the petition for legal
separation and ordered the dissolution and liquidation of the
regime of absolute community of property between Shirley
and Rogelio, viz.:chanroblesvirtuallawlibrary
WHEREFORE, in view of the foregoing, the Court hereby
grants the instant petition for legal separation between the
subject spouses with all its legal effects as provided for in
Art. 63 of the Family Code. Their community property is
consequently dissolved and must be liquidated in accordance
with Art. 102 of the New Family Code. The respondent is
thus hereby enjoined from selling, encumbering or in any
way disposing or alienating any of their community property
including the subject house and lot before the required
liquidation. Moreover, he, being the guilty spouse, must
forfeit the net profits of the community property in favor of
the petitioner who is the innocent spouse pursuant to Art. 43
of the aforesaid law. Finally, in the light of the claim of
ownership by the present occupants who have not been
impleaded in the instant case, a separate action must be
instituted by the petitioner against the alleged buyer or
buyers thereof to determine their respective rights thereon.
Let a copy of this decision be furnished the Local Civil
Registrar of Manila, the Register of Deeds of Marikina, Metro
Manila and the National Statistics Office (NSO), sta. Mesa,
Manila.
SO ORDERED.13cralawlawlibrary
Rogelio appealed the above-quoted ruling before the CA
which denied due course and dismissed the petition. It
became final and executory and a writ of execution was
issued in August 1995.14
On August 27, 1996, Shirley instituted a Complaint15 for
Rescission of Sale and Recoveiy of Property against
petitioner and Rogelio before the RTC of Marikina City,
Branch 273. After trial on the merits, the trial court rendered
its decision on February 14,
2001, viz.:chanroblesvirtuallawlibrary
WHEREFORE, foregoing premises considered, judgment is
hereby rendered in favor of plaintiff Shirley Nuega and
against defendant Josefina Nobleza, as follows:
1) the Deed of Absolute Sale dated December 29, 1992
insofar as the 55.05 square meters representing the one
half (1/2) portion of plaintiff Shirley Nuega is concerned,
is hereby ordered rescinded, the same being null and
void;
2) defendant Josefina Nobleza is ordered to reconvey said
55.05 square meters to plaintiff Shirley Nuega, or in the
alternative to pay plaintiff Shirley Nuega the present
market value of said 55.05 square meters; and
3) to pay plaintiff Shirley Nuega attorney's fees in the sum of
Twenty Thousand Pesos (P20,000.00).
For lack of merit, defendant's counterclaim is
hereby DENIED.
SO ORDERED.16
Petitioner sought recourse with the CA, while Rogelio did not
appeal the ruling of the trial court. In its assailed Decision
promulgated on May 14, 2010, the appellate court affirmed
with modification the trial court's
ruling, viz.:chanroblesvirtuallawlibrary
WHEREFORE, subject to the foregoing disquisition, the
appeal is DENIED. The Decision dated 14 February 2001 of
the Regional Trial Court of Marikina City, Branch 273 in Civil
Case No. 96-274-MK is AFFIRMED with MODIFICATION in
that the Deed of Absolute Sale dated 29 December 1992 is
hereby declared null and void in its entirety, and defendant-
appellant Josefina V. Nobleza is ordered to reconvey the
entire subject property to plaintiff-appellee Shirley B. Nuega
and defendant Rogelio Nuega, without prejudice to said
defendant-appellant's right to recover from defendant
Rogelio whatever amount she paid for the subject property.
Costs against defendant-appellant Nobleza.
SO ORDERED.17cralawlawlibrary
Petitioner moved for reconsideration. In a Resolution dated
July 21, 2010, the appellate court denied the motion for lack
of merit. Hence, this petition raising the following assignment
of errors:chanroblesvirtuallawlibrary
[I.] THE HONORABLE COURT OF APPEALS ERRED WHEN IT
AFFIRMED THE DECISION OF THE REGIONAL TRIAL
COURT BY SUSTAINING THE FINDING THAT PETITIONER
WAS NOT A PURCHASER IN GOOD FAITH.
[II.]THE HONORABLE COURT OF APPEALS ERRED WHEN IT
MODIFIED THE DECISION OF THE REGIONAL TRIAL
COURT BY DECLARING AS NULL AND VOID THE DEED OF
ABSOLUTE SALE DATED 29 DECEMBER 1992 IN ITS
ENTIRETY.18
We deny the petition.
Petitioner is not a buyer in good faith.
An innocent purchaser for value is one who buys the
property of another, without notice that some other person
has a right or interest in the property, for which a full and
fair price is paid by the buyer at the time of the purchase or
before receipt of any notice of claims or interest of some
other person in the property.19 It is the party who claims to
be an innocent purchaser for value who has the burden of
proving such assertion, and it is not enough to invoke the
ordinary presumption of good faith.20 To successfully invoke
and be considered as a buyer in good faith, the presumption
is that first and foremost, the "buyer in good faith" must
have shown prudence and due diligence in the exercise of
his/her rights. It presupposes that the buyer did everything
that an ordinary person would do for the protection and
defense of his/her rights and interests against prejudicial or
injurious concerns when placed in such a situation. The
prudence required of a buyer in good faith is "not that of a
person with training in law, but rather that of an average
man who 'weighs facts and circumstances without resorting
to the calibration of our technical rules of evidence of which
his knowledge is nil.'"21 A buyer in good faith does his
homework and verifies that the particulars are in order such
as the title, the parties, the mode of transfer and the
provisions in the deed/contract of sale, to name a few. To be
more specific, such prudence can be shown by making an
ocular inspection of the property, checking the
title/ownership with the proper Register of Deeds alongside
the payment of taxes therefor, or inquiring into the minutiae
such as the parameters or lot area, the type of ownership,
and the capacity of the seller to dispose of the property,
which capacity necessarily includes an inquiry into the civil
status of the seller to ensure that if married, marital consent
is secured when necessary. In fine, for a purchaser of a
property in the possession of another to be in good faith, he
must exercise due diligence, conduct an investigation, and
weigh the surrounding facts and circumstances like what any
prudent man in a similar situation would do.22
In the case at bar, petitioner claims that she is a buyer in
good faith of the subject property which is titled under the
name of the seller Rogelio A. Nuega alone as evidenced by
TCT No. 171963 and Tax Declaration Nos. D-012-04723 and
D-012-04724.23 Petitioner argues, among others, that since
she has examined the TCT over the subject property and
found the property to have been registered under the name
of seller Rogelio alone, she is an innocent purchaser for value
and "she is not required to go beyond the face of the title in
verifying the status of the subject property at the time of the
consummation of the sale and at the date of the sale."24
We disagree with petitioner.
A buyer cannot claim to be an innocent purchaser for value
by merely relying on the TCT of the seller while ignoring all
the other surrounding circumstances relevant to the sale.
In the case of Spouses Raymundo v. Spouses
Bandong,25 petitioners therein - as does petitioner herein -
were also harping that due to the indefeasibility of a Torrens
title, there was nothing in the TCT of the property in
litigation that should have aroused the buyer's suspicion as
to put her on guard that there was a defect in the title of
therein seller. The Court held in the Spouses Raymundo case
that the buyer therein could not hide behind the cloak of
being an innocent purchaser for value by merely relying on
the TCT which showed that the registered owner of the land
purchased is the seller. The Court ruled in this case that the
buyer was not an innocent purchaser for value due to the
following attendant
circumstances, viz.:chanroblesvirtuallawlibrary
In the present case, we are not convinced by the petitioners'
incessant assertion that Jocelyn is an innocent purchaser for
value. To begin with, she is a grandniece of Eulalia and
resides in the same locality where the latter lives and
conducts her principal business. It is therefore impossible for
her not to acquire knowledge of her grand aunt's business
practice of requiring her biyaheros to surrender the titles to
their properties and to sign the corresponding deeds of sale
over said properties in her favor, as security. This alone
should have put Jocelyn on guard for any possible abuses
that Eulalia may commit with the titles and the deeds of sale
in her possession.26cralawlawlibrary
Similarly, in the case of Arrofo v. Quiño,27 the Court held that
while "the law does not require a person dealing with
registered land to inquire further than what the Torrens Title
on its face indicates," the rule is not absolute.28 Thus, finding
that the buyer therein failed to take the necessary precaution
required of a prudent man, the Court held that Arrofo was
not an innocent purchaser for
value, viz.:chanroblesvirtuallawlibrary
In the present case, the records show that Arrofo failed to
act as a prudent buyer. True, she asked her daughter to
verify from the Register of Deeds if the title to the Property is
free from encumbrances. However, Arrofo admitted that the
Property is within the neighborhood and that she conducted
an ocular inspection of the Property. She saw the house
constructed on the Property. Yet, Arrofo did not even bother
to inquire about the occupants of the house. Arrofo also
admitted that at the time of the sale, Myrna was occupying a
room in her house as her lessee. The fact that Myrna was
renting a room from Arrofo yet selling a land with a house
should have put Arrofo on her guard. She knew that Myrna
was not occupying the house. Hence, someone else must
have been occupying the house.
Thus, Arrofo should have inquired who occupied the house,
and if a lessee, who received the rentals from such lessee.
Such inquiry would have led Arrofo to discover that the
lessee was paying rentals to Quino, not to Renato and
Myrna, who claimed to own the Property.29cralawlawlibrary
An analogous situation obtains in the case at bar.
The TCT of the subject property states that its sole owner is
the seller Rogelio himself who was therein also described as
"single". However, as in the cases of Spouses
Raymundo and Arrofo, there are circumstances critical to the
case at bar which convince us to affirm the ruling of both the
appellate and lower courts that herein petitioner is not a
buyer in good faith.
First, petitioner's sister Hilda Bautista, at the time of the
sale, was residing near Rogelio and Shirley's house - the
subject property - in Ladislao Diwa Village, Marikina City.
Had petitioner been more prudent as a buyer, she could have
easily checked if Rogelio had the capacity to dispose of the
subject property. Had petitioner been more vigilant, she
could have inquired with such facility - considering that her
sister lived in the same Ladislao Diwa Village where the
property is located - if there was any person other than
Rogelio who had any right or interest in the subject property.
To be sure, respondent even testified that she had warned
their neighbors at Ladislao Diwa Village - including
petitioner's sister - not to engage in any deal with Rogelio
relative to the purchase of the subject property because of
the cases she had filed against Rogelio. Petitioner denies that
respondent had given such warning to her neighbors, which
includes her sister, therefore arguing that such warning could
not be construed as "notice" on her part that there is a
person other than the seller himself who has any right or
interest in the subject property. Nonetheless, despite
petitioner's adamant denial, both courts a quo gave
probative value to the testimony of respondent, and the
instant petition failed to present any convincing evidence for
this Court to reverse such factual finding. To be sure, it is
not within our province to second-guess the courts a quo,
and the re-determination of this factual issue is beyond the
reach of a petition for review on certiorari where only
questions of law may be reviewed.30
Second, issues surrounding the execution of the Deed of
Absolute Sale also pose question on the claim of petitioner
that she is a buyer in good faith. As correctly observed by
both courts a quo, the Deed of Absolute Sale was executed
and dated on December 29, 1992. However, the Community
Tax Certificates of the witnesses therein were dated January
2 and 20, 1993.31 While this irregularity is not a direct proof
of the intent of the parties to the sale to make it appear that
the Deed of Absolute Sale was executed on December 29,
1992 - or before Shirley filed the petition for legal separation
on January 29, 1993 - it is circumstantial and relevant to the
claim of herein petitioner as an innocent purchaser for value.
That is not all.
In the Deed of Absolute Sale dated December 29, 1992, the
civil status of Rogelio as seller was not stated, while
petitioner as buyer was indicated as
"single," viz.:chanroblesvirtuallawlibrary
ROGELIO A. NUEGA, of legal age, Filipino citizen and with
postal address at 2-A-2 Ladislao Diwa St., Concepcion,
Marikina, Metro Manila, hereinafter referred to as the
VENDOR
And
JOSEFINA V. NOBLEZA, of legal age, Filipino citizen, single
and with postal address at No. L-2-A-3 Ladislao Diwa St.,
Concepcion, Marikina, Metro Manila, hereinafter referred to
as the VENDEE.32cralawlawlibrary
It puzzles the Court that while petitioner has repeatedly
claimed that Rogelio is "single" under TCT No. 171963 and
Tax Declaration Nos. D-012-04723 and D-012-04724, his
civil status as seller was not stated in the Deed of Absolute
Sale - further creating a cloud on the claim of petitioner that
she is an innocent purchaser for value.
As to the second issue, we rule that the appellate court did
not err when it modified the decision of the trial court and
declared that the Deed of Absolute Sale dated December 29,
1992 is void in its entirety.
The trial court held that while the TCT shows that the owner
of the subject property is Rogelio alone, respondent was able
to prove at the trial court that she contributed in the
payment of the purchase price of the subject property. This
fact was also settled with finality by the RTC of Pasig City,
Branch 70, and affirmed by the CA, in the case for legal
separation and liquidation of property docketed as JDRC
Case No. 2510. The pertinent portion of the decision
reads:chanroblesvirtuallawlibrary
xxx Clearly, the house and lot jointly acquired by the parties
prior to their marriage forms part of their community
property regime, xxx
From the foregoing, Shirley sufficiently proved her financial
contribution for the purchase of the house and lot covered by
TCT 171963. Thus, the present lot which forms part of their
community property should be divided equally between them
upon the grant of the instant petition for legal separation.
Having established by preponderance of evidence the fact of
her husband's guilt in contracting a subsequent marriage
xxx, Shirley alone should be entitled to the net profits earned
by the absolute community property.33cralawlawlibrary
However, the nullity of the sale made by Rogelio is not
premised on proof of respondent's financial contribution in
the purchase of the subject property. Actual contribution is
not relevant in determining whether a piece of property is
community property for the law itself defines what
constitutes community property.
Article 91 of the Family Code thus
provides:chanroblesvirtuallawlibrary
Art. 91. Unless otherwise provided in this Chapter or in the
marriage settlements, the community property shall consist
of all the property owned by the spouses at the time of the
celebration of the marriage or acquired thereafter.
The only exceptions from the above rule are: (1) those
excluded from the absolute community by the Family Code;
and (2) those excluded by the marriage settlement.
Under the first exception are properties enumerated in
Article 92 of the Family Code, which
states:chanroblesvirtuallawlibrary
Art. 92. The following shall be excluded from the community
property:
(1) Property acquired during the marriage by gratuitous title
by either spouse, and the fruits as well as the income
thereof, if any, unless it is expressly provided by the donor,
testator or grantor that they shall form part of the
community property;
(2) Property for personal and exclusive use of either spouse;
however, jewelry shall form part of the community property;
(3) Property acquired before the marriage by either spouse
who has legitimate descendants by a former marriage, and
the fruits as well as the income, if any, of such property.
As held in Quiao v. Quiao:34ChanRoblesVirtualawlibrary
When a couple enters into a regime of absolute community,
the husband and the wife becomes joint owners of all the
properties of the marriage. Whatever property each spouse
brings into the marriage, and those acquired during the
marriage (except those excluded under Article 92 of the
Family Code) form the common mass of the couple's
properties. And when the couple's marriage or community is
dissolved, that common mass is divided between the
spouses, or their respective heirs, equally or in the
proportion the parties have established, irrespective of the
value each one may have originally owned.
Since the subject property does not fall under any of the
exclusions provided in Article 92, it therefore forms part of
the absolute community property of Shirley and Rogelio.
Regardless of their respective contribution to its acquisition
before their marriage, and despite the fact that only
Rogelio's name appears in the TCT as owner, the property is
owned jointly by the spouses Shirley and Rogelio.
Respondent and Rogelio were married on September 1,
1990. Rogelio, on his own and without the consent of herein
respondent as his spouse, sold the subject property via a
Deed of Absolute Sale dated December 29, 1992 - or during
the subsistence of a valid contract of marriage. Under Article
96 of Executive Order No. 209, otherwise known as The
Family Code of the Philippines, the said disposition of a
communal property is void, viz.:chanroblesvirtuallawlibrary
Art. 96. The administration and enjoyment of the community
property shall belong to both spouses jointly. In case of
disagreement, the husband's decision shall prevail, subject
to recourse to the court by the wife for a proper remedy,
which must be availed of within five years from the date of
the contract implementing such decision.
In the event that one spouse is incapacitated or otherwise
unable to participate in the administration of the common
properties, the other spouse may assume sole powers of
administration. These powers do not include the powers
of disposition or encumbrance without the authority of
the court or the written consent of the other spouse.
In the absence of such authority or consent, the
disposition or encumbrance shall be void. However, the
transaction shall be construed as a continuing offer on the
part of the consenting spouse and the third person, and may
be perfected as a binding contract upon the acceptance by
the other spouse or authorization by the court before the
offer is withdrawn by either or both
offerors.35cralawlawlibrary
It is clear under the foregoing provision of the Family
Code that Rogelio could not sell the subject property without
the written consent of respondent or the authority of the
court. Without such consent or authority, the entire sale is
void. As correctly explained by the appellate
court:chanroblesvirtuallawlibrary
In the instant case, defendant Rogelio sold the entire subject
property to defendant-appellant Josefina on 29 December
1992 or during the existence of Rogelio's marriage to
plaintiff-appellee Shirley, without the consent of the latter.
The subject property forms part of Rogelio and Shirley's
absolute community of property. Thus, the trial court erred
in declaring the deed of sale null and void only insofar as the
55.05 square meters representing the one-half (1/2) portion
of plaintiff-appellee Shirley. In absolute community of
property, if the husband, without knowledge and consent of
the wife, sells (their) property, such sale is void. The consent
of both the husband Rogelio and the wife Shirley is required
and the absence of the consent of one renders the entire sale
null and void including the portion of the subject property
pertaining to defendant Rogelio who contracted the sale with
defendant-appellant Josefina. Since the Deed of Absolute
Sale x x x entered into by and between defendant-appellant
Josefina and defendant Rogelio dated 29 December 1992,
during the subsisting marriage between plaintiff-appellee
Shirley and Rogelio, was without the written consent of
Shirley, the said Deed of Absolute Sale is void in its entirety.
Hence, the trial court erred in declaring the said Deed of
Absolute Sale as void only insofar as the 1/2 portion
pertaining to the share of Shirley is
concerned.36cralawlawlibrary

Finally, consistent with our ruling that Rogelio solely entered

into the contract of sale with petitioner and acknowledged
receiving the entire consideration of the contract under the
Deed of Absolute Sale, Shirley could not be held accountable
to petitioner for the reimbursement of her payment for the
purchase of the subject property. Under Article 94 of
the Family Code, the absolute community of property shall
only be "liable for x x x [d]ebts and obligations contracted by
either spouse without the consent of the other to the extent
that the family may have been benefited x x x." As correctly
stated by the appellate court, there being no evidence on
record that the amount received by Rogelio redounded to the
benefit of the family, respondent cannot be made to
reimburse any amount to petitioner.37

WHEREFORE, in view of the foregoing, the petition

is DENIED. The assailed Decision and Resolution of the
Court of Appeals dated May 14, 2010 and July 21, 2010,
respectively, in CA-G.R. CV No. 70235 are AFFIRMED.

Costs against petitioner.

SO ORDERED.chanroblesvirtuallawlibrary
G.R. No. 156125 August 25, 2010
FRANCISCO MUÑOZ, JR., Petitioner,
vs.
ERLINDA RAMIREZ and ELISEO CARLOS, Respondents.
We resolve the present petition for review on certiorari1 filed
by petitioner Francisco Muñoz, Jr. (petitioner) to challenge
the decision2 and the resolution3 of the Court of Appeals (CA)
in CA-G.R. CV No. 57126.4 The CA decision set aside the
decision5 of the Regional Trial Court (RTC), Branch 166,
Pasig City, in Civil Case No. 63665. The CA resolution denied
the petitioner’s subsequent motion for reconsideration.
FACTUAL BACKGROUND
The facts of the case, gathered from the records, are briefly
summarized below.
Subject of the present case is a seventy-seven (77)-square
meter residential house and lot located at 170 A. Bonifacio
Street, Mandaluyong City (subject property), covered by
Transfer Certificate of Title (TCT) No. 7650 of the Registry of
Deeds of Mandaluyong City in the name of the petitioner.6
The residential lot in the subject property was previously
covered by TCT No. 1427, in the name of Erlinda Ramirez,
married to Eliseo Carlos (respondents).7
On April 6, 1989, Eliseo, a Bureau of Internal Revenue
employee, mortgaged TCT No. 1427, with Erlinda’s consent,
to the Government Service Insurance System (GSIS) to
secure a ₱136,500.00 housing loan, payable within twenty
(20) years, through monthly salary deductions of
₱1,687.66.8 The respondents then constructed a thirty-six
(36)-square meter, two-story residential house on the lot.
On July 14, 1993, the title to the subject property was
transferred to the petitioner by virtue of a Deed of Absolute
Sale, dated April 30, 1992, executed by Erlinda, for herself
and as attorney-in-fact of Eliseo, for a stated consideration of
₱602,000.00.9
On September 24, 1993, the respondents filed a complaint
with the RTC for the nullification of the deed of absolute sale,
claiming that there was no sale but only a mortgage
transaction, and the documents transferring the title to the
petitioner’s name were falsified.
The respondents alleged that in April 1992, the petitioner
granted them a ₱600,000.00 loan, to be secured by a first
mortgage on TCT No. 1427; the petitioner gave Erlinda a
₱200,000.0010 advance to cancel the GSIS mortgage, and
made her sign a document purporting to be the mortgage
contract; the petitioner promised to give the ₱402,000.00
balance when Erlinda surrenders TCT No. 1427 with the GSIS
mortgage cancelled, and submits an affidavit signed by
Eliseo stating that he waives all his rights to the subject
property; with the ₱200,000.00 advance, Erlinda paid GSIS
₱176,445.2711 to cancel the GSIS mortgage on TCT No.
1427;12 in May 1992, Erlinda surrendered to the petitioner
the clean TCT No. 1427, but returned Eliseo’s affidavit,
unsigned; since Eliseo’s affidavit was unsigned, the petitioner
refused to give the ₱402,000.00 balance and to cancel the
mortgage, and demanded that Erlinda return the
₱200,000.00 advance; since Erlinda could not return the
₱200,000.00 advance because it had been used to pay the
GSIS loan, the petitioner kept the title; and in 1993, they
discovered that TCT No. 7650 had been issued in the
petitioner’s name, cancelling TCT No.1427 in their name.
The petitioner countered that there was a valid contract of
sale. He alleged that the respondents sold the subject
property to him after he refused their offer to mortgage the
subject property because they lacked paying capacity and
were unwilling to pay the incidental charges; the sale was
with the implied promise to repurchase within one
year,13 during which period (from May 1, 1992 to April 30,
1993), the respondents would lease the subject property for
a monthly rental of ₱500.00;14 when the respondents failed
to repurchase the subject property within the one-year
period despite notice, he caused the transfer of title in his
name on July 14, 1993;15 when the respondents failed to pay
the monthly rentals despite demand, he filed an ejectment
case16 against them with the Metropolitan Trial Court
(MeTC), Branch 60, Mandaluyong City, on September 8,
1993, or sixteen days before the filing of the RTC case for
annulment of the deed of absolute sale.
During the pendency of the RTC case, or on March 29, 1995,
the MeTC decided the ejectment case. It ordered Erlinda and
her family to vacate the subject property, to surrender its
possession to the petitioner, and to pay the overdue
rentals.17
In the RTC, the respondents presented the results of the
scientific examination18 conducted by the National Bureau of
Investigation of Eliseo’s purported signatures in the Special
Power of Attorney19 dated April 29, 1992 and the Affidavit of
waiver of rights dated April 29, 1992,20 showing that they
were forgeries.
The petitioner, on the other hand, introduced evidence on
the paraphernal nature of the subject property since it was
registered in Erlinda’s name; the residential lot was part of a
large parcel of land owned by Pedro Ramirez and Fructuosa
Urcla, Erlinda’s parents; it was the subject of Civil Case No.
50141, a complaint for annulment of sale, before the RTC,
Branch 158, Pasig City, filed by the surviving heirs of Pedro
against another heir, Amado Ramirez, Erlinda’s brother; and,
as a result of a compromise agreement, Amado agreed to
transfer to the other compulsory heirs of Pedro, including
Erlinda, their rightful shares of the land.21
THE RTC RULING
In a Decision dated January 23, 1997, the RTC dismissed the
complaint. It found that the subject property was Erlinda’s
exclusive paraphernal property that was inherited from her
father. It also upheld the sale to the petitioner, even without
Eliseo’s consent as the deed of absolute sale bore the
genuine signatures of Erlinda and the petitioner as vendor
and vendee, respectively. It concluded that the NBI finding
that Eliseo’s signatures in the special power of attorney and
in the affidavit were forgeries was immaterial because
Eliseo’s consent to the sale was not necessary.22
The respondents elevated the case to the CA via an ordinary
appeal under Rule 41 of the Revised Rules of Court.
THE CA RULING
The CA decided the appeal on June 25, 2002. Applying the
second paragraph of Article 15823 of the Civil Code and
Calimlim-Canullas v. Hon. Fortun,24 the CA held that the
subject property, originally Erlinda’s exclusive paraphernal
property, became conjugal property when it was used as
collateral for a housing loan that was paid through conjugal
funds – Eliseo’s monthly salary deductions; the subject
property, therefore, cannot be validly sold or mortgaged
without Eliseo’s consent, pursuant to Article 12425 of the
Family Code. Thus, the CA declared void the deed of absolute
sale, and set aside the RTC decision.
When the CA denied26 the subsequent motion for
reconsideration,27 the petitioner filed the present petition for
review on certiorari under Rule 45 of the Revised Rules of
Court.
THE PETITION
The petitioner argues that the CA misapplied the second
paragraph of Article 158 of the Civil Code and Calimlim-
Canullas28 because the respondents admitted in the
complaint that it was the petitioner who gave the money
used to cancel the GSIS mortgage on TCT No. 1427; Article
12029 of the Family Code is the applicable rule, and since the
value of the house is less than the value of the lot, then
Erlinda retained ownership of the subject property. He also
argues that the contract between the parties was a sale, not
a mortgage, because (a) Erlinda did not deny her signature
in the document;30 (b) Erlinda agreed to sign a contract of
lease over the subject property;31 and, (c) Erlinda executed a
letter, dated April 30, 1992, confirming the conversion of the
loan application to a deed of sale.32
THE CASE FOR THE RESPONDENTS
The respondents submit that it is unnecessary to compare
the respective values of the house and of the lot to
determine ownership of the subject property; it was acquired
during their marriage and, therefore, considered conjugal
property. They also submit that the transaction between the
parties was not a sale, but an equitable mortgage because
(a) they remained in possession of the subject property even
after the execution of the deed of absolute sale, (b) they
paid the 1993 real property taxes due on the subject
property, and (c) they received ₱200,000.00 only of the total
stated price of ₱602,000.00.
THE ISSUE
The issues in the present case boil down to (1) whether the
subject property is paraphernal or conjugal; and, (2)
whether the contract between the parties was a sale or an
equitable mortgage.
OUR RULING
We deny the present Petition but for reasons other than
those advanced by the CA.
This Court is not a trier of facts. However, if the inference,
drawn by the CA, from the facts is manifestly mistaken, as in
the present case, we can review the evidence to allow us to
arrive at the correct factual conclusions based on the
record.33
First Issue:
Paraphernal or Conjugal?
As a general rule, all property acquired during the marriage,
whether the acquisition appears to have been made,
contracted or registered in the name of one or both spouses,
is presumed to be conjugal unless the contrary is proved.34
In the present case, clear evidence that Erlinda inherited the
residential lot from her father has sufficiently rebutted this
presumption of conjugal ownership.35 Pursuant to Articles
9236 and 10937 of the Family Code, properties acquired by
gratuitous title by either spouse, during the marriage, shall
be excluded from the community property and be the
exclusive property of each spouse.38 The residential lot,
therefore, is Erlinda’s exclusive paraphernal property.
The CA, however, held that the residential lot became
conjugal when the house was built thereon through conjugal
funds, applying the second paragraph of Article 158 of the
Civil Code and Calimlim-Canullas.39 Under the second
paragraph of Article 158 of the Civil Code, a land that
originally belonged to one spouse becomes conjugal upon
the construction of improvements thereon at the expense of
the partnership. We applied this provision in Calimlim-
Canullas,40 where we held that when the conjugal house is
constructed on land belonging exclusively to the husband,
the land ipso facto becomes conjugal, but the husband is
entitled to reimbursement of the value of the land at the
liquidation of the conjugal partnership.
The CA misapplied Article 158 of the
Civil Code and Calimlim-Canullas
We cannot subscribe to the CA’s misplaced reliance on Article
158 of the Civil Code and Calimlim-Canullas.
As the respondents were married during the effectivity of the
Civil Code, its provisions on conjugal partnership of gains
(Articles 142 to 189) should have governed their property
relations. However, with the enactment of the Family Code
on August 3, 1989, the Civil Code provisions on conjugal
partnership of gains, including Article 158, have been
superseded by those found in the Family Code (Articles 105
to 133). Article 105 of the Family Code states:
xxxx
The provisions of this Chapter [on the Conjugal Partnership
of Gains] shall also apply to conjugal partnerships of gains
already established between spouses before the effectivity of
this Code, without prejudice to vested rights already
acquired in accordance with the Civil Code or other laws, as
provided in Article 256.
Thus, in determining the nature of the subject property, we
refer to the provisions of the Family Code, and not the Civil
Code, except with respect to rights then already vested.
Article 120 of the Family Code, which supersedes Article 158
of the Civil Code, provides the solution in determining the
ownership of the improvements that are made on the
separate property of the spouses, at the expense of the
partnership or through the acts or efforts of either or both
spouses. Under this provision, when the cost of the
improvement and any resulting increase in value are more
than the value of the property at the time of the
improvement, the entire property of one of the spouses shall
belong to the conjugal partnership, subject to reimbursement
of the value of the property of the owner-spouse at the time
of the improvement; otherwise, said property shall be
retained in ownership by the owner-spouse, likewise subject
to reimbursement of the cost of the improvement.41
In the present case, we find that Eliseo paid a portion only of
the GSIS loan through monthly salary deductions. From April
6, 198942 to April 30, 1992,43 Eliseo paid about
₱60,755.76,44 not the entire amount of the GSIS housing
loan plus interest, since the petitioner advanced the
₱176,445.2745 paid by Erlinda to cancel the mortgage in
1992. Considering the ₱136,500.00 amount of the GSIS
housing loan, it is fairly reasonable to assume that the value
of the residential lot is considerably more than the
₱60,755.76 amount paid by Eliseo through monthly salary
deductions.
Thus, the subject property remained the exclusive
paraphernal property of Erlinda at the time she contracted
with the petitioner; the written consent of Eliseo to the
transaction was not necessary. The NBI finding that Eliseo’s
signatures in the special power of attorney and affidavit were
forgeries was immaterial.
Nonetheless, the RTC and the CA apparently failed to
consider the real nature of the contract between the parties.
Second Issue:
Sale or Equitable Mortgage?
Jurisprudence has defined an equitable mortgage "as one
which although lacking in some formality, or form or words,
or other requisites demanded by a statute, nevertheless
reveals the intention of the parties to charge real property as
security for a debt, there being no impossibility nor anything
contrary to law in this intent."46
Article 1602 of the Civil Code enumerates the instances when
a contract, regardless of its nomenclature, may be presumed
to be an equitable mortgage: (a) when the price of a sale
with right to repurchase is unusually inadequate; (b) when
the vendor remains in possession as lessee or
otherwise; (c) when upon or after the expiration of the right
to repurchase another instrument extending the period of
redemption or granting a new period is executed; (d) when
the purchaser retains for himself a part of the
purchase price; (e) when the vendor binds himself to
pay the taxes on the thing sold; and, (f) in any other
case where it may be fairly inferred that the real
intention of the parties is that the transaction shall
secure the payment of a debt or the performance of
any other obligation. These instances apply to a contract
purporting to be an absolute sale.47
For the presumption of an equitable mortgage to arise under
Article 1602 of the Civil Code, two (2) requisites must
concur: (a) that the parties entered into a contract
denominated as a contract of sale; and, (b) that their
intention was to secure an existing debt by way of a
mortgage. Any of the circumstances laid out in Article 1602
of the Civil Code, not the concurrence nor an overwhelming
number of the enumerated circumstances, is sufficient to
support the conclusion that a contract of sale is in fact an
equitable mortgage.48
Contract is an equitable mortgage
In the present case, there are four (4) telling circumstances
pointing to the existence of an equitable mortgage.
First, the respondents remained in possession as lessees of
the subject property; the parties, in fact, executed a one-
year contract of lease, effective May 1, 1992 to April 30,
1993.49
Second, the petitioner retained part of the "purchase price,"
the petitioner gave a ₱200,000.00 advance to settle the
GSIS housing loan, but refused to give the ₱402,000.00
balance when Erlinda failed to submit Eliseo’s signed affidavit
of waiver of rights.
Third, respondents paid the real property taxes on July 8,
1993, despite the alleged sale on April 30, 1992;50payment
of real property taxes is a usual burden attaching to
ownership and when, as here, such payment is coupled with
continuous possession of the property, it constitutes
evidence of great weight that the person under whose name
the realty taxes were declared has a valid and rightful claim
over the land.51
Fourth, Erlinda secured the payment of the principal debt
owed to the petitioner with the subject property. The records
show that the petitioner, in fact, sent Erlinda a Statement of
Account showing that as of February 20, 1993, she owed
₱384,660.00, and the daily interest, starting February 21,
1993, was ₱641.10.52 Thus, the parties clearly intended an
equitable mortgage and not a contract of sale.
That the petitioner advanced the sum of ₱200,000.00 to
Erlinda is undisputed. This advance, in fact, prompted the
latter to transfer the subject property to the petitioner. Thus,
before the respondents can recover the subject property,
they must first return the amount of ₱200,000.00 to the
petitioner, plus legal interest of 12% per annum, computed
from April 30, 1992.
We cannot sustain the ballooned obligation of ₱384,660.00,
claimed in the Statement of Account sent by the
petitioner,53 sans any evidence of how this amount was
arrived at. Additionally, a daily interest of ₱641.10 or
₱19,233.00 per month for a ₱200,000.00 loan is patently
unconscionable. While parties are free to stipulate on the
interest to be imposed on monetary obligations, we can step
in to temper the interest rates if they are unconscionable.54
In Lustan v. CA,55 where we established the reciprocal
obligations of the parties under an equitable mortgage, we
ordered the reconveyance of the property to the rightful
owner therein upon the payment of the loan within ninety
(90) days from the finality of the decision.56
WHEREFORE, in light of all the foregoing, we
hereby DENY the present petition. The assailed decision and
resolution of the Court of Appeals in CA-G.R. CV No. 57126
are AFFIRMED with the following MODIFICATIONS:
1. The Deed of Absolute Sale dated April 30, 1992 is
hereby declared an equitable mortgage; and
2. The petitioner is obligated to RECONVEY to the
respondents the property covered by Transfer
Certificate of Title No. 7650 of the Register of Deeds of
Mandaluyong City, UPON THE PAYMENT OF
₱200,000.00, with 12% legal interest from April 30,
1992, by respondents within NINETY DAYS FROM THE
FINALITY OF THIS DECISION.
Costs against the petitioner.
SO ORDERED.
G.R. No. 118305 February 12, 1998
AYALA INVESTMENT & DEVELOPMENT CORP. and
ABELARDO MAGSAJO, petitioners,
vs.
COURT OF APPEALS and SPOUSES ALFREDO &
ENCARNACION CHING, respondents.
MARTINEZ, J.:
Under Article 161 of the Civil Code, what debts and
obligations contracted by the husband alone are considered
"for the benefit of the conjugal partnership" which are
chargeable against the conjugal partnership? Is a surety
agreement or an accommodation contract entered into by
the husband in favor of his employer within the
contemplation of the said provision?
These are the issues which we will resolve in this petition for
review.
The petitioner assails the decision dated April 14, 1994 of the
respondent Court of Appeals in "Spouses Alfredo and
Encarnacion Ching vs. Ayala Investment and Development
Corporation, et. al.," docketed as CA-G.R. CV No.
29632,1 upholding the decision of the Regional Trial
Court of Pasig, Branch 168, which ruled that the
conjugal partnership of gains of respondents-spouses
Alfredo and Encarnacion Ching is not liable for the
payment of the debts secured by respondent-husband
Alfredo Ching.
A chronology of the essential antecedent facts is
necessary for a clear understanding of the case at bar.
Philippine Blooming Mills (hereinafter referred to as
PBM) obtained a P50,300,000.00 loan from petitioner
Ayala Investment and Development Corporation
(hereinafter referred to as AIDC). As added security
for the credit line extended to PBM, respondent
Alfredo Ching, Executive Vice President of PBM,
executed security agreements on December 10, 1980
and on March 20, 1981 making himself jointly and
severally answerable with PBM's indebtedness to
AIDC.
PBM failed to pay the loan. Thus, on July 30, 1981,
AIDC filed a case for sum of money against PBM and
respondent-husband Alfredo Ching with the then Court
of First Instance of Rizal (Pasig), Branch VIII, entitled
"Ayala Investment and Development Corporation vs.
Philippine Blooming Mills and Alfredo Ching," docketed
as Civil Case No. 42228.
After trial, the court rendered judgment ordering PBM
and respondent-husband Alfredo Ching to jointly and
severally pay AIDC the principal amount of
P50,300,000.00 with interests.
Pending appeal of the judgment in Civil Case No.
42228, upon motion of AIDC, the lower court issued a
writ of execution pending appeal. Upon AIDC's putting
up of an P8,000,000.00 bond, a writ of execution dated
May 12, 1982 was issued. Thereafter, petitioner
Abelardo Magsajo, Sr., Deputy Sheriff of Rizal and
appointed sheriff in Civil Case No. 42228, caused the
issuance and service upon respondents-spouses of a
notice of sheriff sale dated May 20, 1982 on three (3)
of their conjugal properties. Petitioner Magsajo then
scheduled the auction sale of the properties levied.
On June 9, 1982, private respondents filed a case of
injunction against petitioners with the then Court of
First Instance of Rizal (Pasig), Branch XIII, to enjoin
the auction sale alleging that petitioners cannot
enforce the judgment against the conjugal partnership
levied on the ground that, among others, the subject
loan did not redound to the benefit of the said conjugal
partnership. 2 Upon application of private respondents,
the lower court issued a temporary restraining order
to prevent petitioner Magsajo from proceeding with
the enforcement of the writ of execution and with the
sale of the said properties at public auction.
AIDC filed a petition for certiorari before the Court of
Appeals,3 questioning the order of the lower court
enjoining the sale. Respondent Court of Appeals issued
a Temporary Restraining Order on June 25, 1982,
enjoining the lower court4 from enforcing its Order of
June 14, 1982, thus paving the way for the scheduled
auction sale of respondents-spouses conjugal
properties.
On June 25, 1982, the auction sale took place. AIDC
being the only bidder, was issued a Certificate of Sale
by petitioner Magsajo, which was registered on July 2,
1982. Upon expiration of the redemption period,
petitioner sheriff issued the final deed of sale on
August 4, 1982 which was registered on August 9,
1983.
In the meantime, the respondent court, on August 4,
1982, decided CA-G.R. SP No. 14404, in this manner:
WHEREFORE, the petition for certiorari in
this case is granted and the challenged
order of the respondent Judge dated June
14, 1982 in Civil Case No. 46309 is hereby
set aside and nullified. The same petition
insofar as it seeks to enjoin the respondent
Judge from proceeding with Civil Case No.
46309 is, however, denied. No
pronouncement is here made as to costs. .
..5
On September 3, 1983, AIDC filed a motion to dismiss
the petition for injunction filed before Branch XIII of
the CFI of Rizal (Pasig) on the ground that the same
had become moot and academic with the
consummation of the sale. Respondents filed their
opposition to the motion arguing, among others, that
where a third party who claim is ownership of the
property attached or levied upon, a different legal
situation is presented; and that in this case, two (2) of
the real properties are actually in the name of
Encarnacion Ching, a non-party to Civil Case No.
42228.
The lower court denied the motion to dismiss. Hence,
trial on the merits proceeded. Private respondents
presented several witnesses. On the other hand,
petitioners did not present any evidence.
On September 18, 1991, the trial court promulgated its
decision declaring the sale on execution null and void.
Petitioners appealed to the respondent court, which
was docketed as CA-G.R. CV No. 29632.
On April 14, 1994, the respondent court promulgated
the assailed decision, affirming the decision of the
regional trial court. It held that:
 The loan procured from respondent-
appellant AIDC was for the advancement
and benefit of Philippine Blooming Mills
and not for the benefit of the conjugal
partnership of petitioners-appellees.
xxx xxx xxx
As to the applicable law, whether it is
Article 161 of the New Civil Code or Article
1211 of the Family Code-suffice it to say
that the two provisions are substantially
the same. Nevertheless, We agree with the
trial court that the Family Code is the
applicable law on the matter . . . . . . .
Article 121 of the Family Code provides
that "The conjugal partnership shall be
liable for: . . . (2) All debts and obligations
contracted during the marriage by the
designated Administrator-Spouse for the
benefit of the conjugal partnership of gains
. . . ." The burden of proof that the debt
was contracted for the benefit of the
conjugal partnership of gains, lies with the
creditor-party litigant claiming as such. In
the case at bar, respondent-appellant AIDC
failed to prove that the debt was
contracted by appellee-husband, for the
benefit of the conjugal partnership of
gains.
The dispositive portion of the decision reads:
WHEREFORE, in view of all the foregoing,
judgment is hereby rendered DISMISSING
the appeal. The decision of the Regional
Trial Court is AFFIRMED in toto.6
Petitioner filed a Motion for Reconsideration which
was denied by the respondent court in a Resolution
dated November 28, 1994.7
Hence, this petition for review. Petitioner contends
that the "respondent court erred in ruling that the
conjugal partnership of private respondents is not
liable for the obligation by the respondent-husband."
Specifically, the errors allegedly committed by the
respondent court are as follows:
I. RESPONDENT COURT ERRED
IN RULING THAT THE
OBLIGATION INCURRED
RESPONDENT HUSBAND DID
NOT REDOUND TO THE BENEFIT
OF THE CONJUGAL
PARTNERSHIP OF THE PRIVATE
RESPONDENT.
II. RESPONDENT COURT ERRED
IN RULING THAT THE ACT OF
RESPONDENT HUSBAND IN
SECURING THE SUBJECT LOAN
IS NOT PART OF HIS
INDUSTRY, BUSINESS OR
CAREER FROM WHICH HE
SUPPORTS HIS FAMILY.
Petitioners in their appeal point out that there is no
need to prove that actual benefit redounded to the
benefit of the partnership; all that is necessary, they
say, is that the transaction was entered into for the
benefit of the conjugal partnership. Thus, petitioners
aver that:
The wordings of Article 161 of the Civil
Code is very clear: for the partnership to
be held liable, the husband must have
contracted the debt "for the benefit of the
partnership, thus:
Art. 161. The conjugal partnership shall be
liable for:
1) all debts and obligations contracted by the husband
for the benefit of the conjugal partnership . . . .
There is a difference between the phrases:
"redounded to the benefit of" or "benefited
from" (on the one hand) and "for the
benefit of (on the other). The former
require that actual benefit must have been
realized; the latter requires only that the
transaction should be one which normally
would produce benefit to the partnership,
regardless of whether or not actual benefit
accrued.8
We do not agree with petitioners that there is a
difference between the terms "redounded to the
benefit of" or "benefited from" on the one hand; and
"for the benefit of" on the other. They mean one and
the same thing. Article 161 (1) of the Civil Code and
Article 121 (2) of the Family Code are similarly
worded, i.e., both use the term "for the benefit of." On
the other hand, Article 122 of the Family Code
provides that "The payment of personal debts by the
husband or the wife before or during the marriage
shall not be charged to the conjugal partnership
except insofar as they redounded to the benefit of the
family." As can be seen, the terms are used
interchangeably.
Petitioners further contend that the ruling of the
respondent court runs counter to the pronouncement
of this Court in the case of Cobb-Perez vs. Lantin,9 that
the husband as head of the family and as
administrator of the conjugal partnership is presumed
to have contracted obligations for the benefit of the
family or the conjugal partnership.
Contrary to the contention of the petitioners, the case
of Cobb-Perez is not applicable in the case at bar. This
Court has, on several instances, interpreted the term
"for the benefit of the conjugal partnership."
In the cases of Javier vs. Osmeña, 10 Abella de Diaz
vs. Erlanger & Galinger, Inc., 11 Cobb-Perez
vs. Lantin 12and G-Tractors, Inc. vs. Court of
Appeals, 13 cited by the petitioners, we held that:
The debts contracted by the husband
during the marriage relation, for and in the
exercise of the industry or profession by
which he contributes toward the support of
his family, are not his personal and private
debts, and the products or income from the
wife's own property, which, like those of
 her husband's, are liable for the payment
of the marriage expenses, cannot be
excepted from the payment of such debts.
(Javier)
The husband, as the manager of the
partnership (Article 1412, Civil Code), has
a right to embark the partnership in an
ordinary commercial enterprise for gain,
and the fact that the wife may not approve
of a venture does not make it a private and
personal one of the husband. (Abella de
Diaz)
Debts contracted by the husband for and in
the exercise of the industry or profession
by which he contributes to the support of
the family, cannot be deemed to be his
exclusive and private debts. (Cobb-Perez).
. . . if he incurs an indebtedness in the
legitimate pursuit of his career or
profession or suffers losses in a legitimate
business, the conjugal partnership must
equally bear the indebtedness and the
losses, unless he deliberately acted to the
prejudice of his family. (G-Tractors)
However, in the cases of Ansaldo vs. Sheriff of Manila,
Fidelity Insurance & Luzon Insurance Co.,14 Liberty
Insurance Corporation vs. Banuelos, 15 and Luzon
Surety Inc. vs. De Garcia, 16 cited by the respondents,
we ruled that:
The fruits of the paraphernal property
which form part of the assets of the
conjugal partnership, are subject to the
payment of the debts and expenses of the
spouses, but not to the payment of the
personal obligations (guaranty
agreements) of the husband, unless it be
proved that such obligations were
productive of some benefit to the family."
(Ansaldo; parenthetical phrase ours.)
When there is no showing that the
execution of an indemnity agreement by
the husband redounded to the benefit of
his family, the undertaking is not a
conjugal debt but an obligation personal to
him. (Liberty Insurance)
In the most categorical language, a conjugal
partnership under Article 161 of the new Civil Code is
liable only for such "debts and obligations contracted
by the husband for the benefit of the conjugal
partnership." There must be the requisite showing
then of some advantage which clearly accrued to the
welfare of the spouses. Certainly, to make a conjugal
partnership respond for a liability that should
appertain to the husband alone is to defeat and
frustrate the avowed objective of the new Civil Code to
show the utmost concern for the solidarity and well-
being of the family as a unit. The husband, therefore,
is denied the power to assume unnecessary and
unwarranted risks to the financial stability of the
conjugal partnership. (Luzon Surety, Inc.)
From the foregoing jurisprudential rulings of this
Court, we can derive the following conclusions:
(A) If the husband himself is the principal obligor in
the contract, i.e., he directly received the money and
services to be used in or for his own business or his
own profession, that contract falls within the term . . .
. obligations for the benefit of the conjugal
partnership." Here, no actual benefit may be proved. It
is enough that the benefit to the family is apparent at
the time of the signing of the contract. From the very
nature of the contract of loan or services, the family
stands to benefit from the loan facility or services to
be rendered to the business or profession of the
husband. It is immaterial, if in the end, his business or
profession fails or does not succeed. Simply stated,
where the husband contracts obligations on behalf of
the family business, the law presumes, and rightly so,
that such obligation will redound to the benefit of the
conjugal partnership.
(B) On the other hand, if the money or services are
given to another person or entity, and the husband
acted only as a surety or guarantor, that contract
cannot, by itself, alone be categorized as falling within
the context of "obligations for the benefit of the
conjugal partnership." The contract of loan or services
is clearly for the benefit of the principal debtor and not
for the surety or his family. No presumption can be
inferred that, when a husband enters into a contract of
surety or accommodation agreement, it is "for the
benefit of the conjugal partnership." Proof must be
presented to establish benefit redounding to the
conjugal partnership.
Thus, the distinction between the Cobb-Perez case,
and we add, that of the three other companion cases,
on the one hand, and that of Ansaldo, Liberty
Insurance and Luzon Surety, is that in the former, the
husband contracted the obligation for his own
business; while in the latter, the husband merely acted
as a surety for the loan contracted by another for the
latter's business.
The evidence of petitioner indubitably show that co-
respondent Alfredo Ching signed as surety for the
P50M loan contracted on behalf of PBM. petitioner
should have adduced evidence to prove that Alfredo
Ching's acting as surety redounded to the benefit of
the conjugal partnership. The reason for this is as
lucidly explained by the respondent court:
The loan procured from respondent-
appellant AIDC was for the advancement
and benefit of Philippine Blooming Mills
and not for the benefit of the conjugal
partnership of petitioners-appellees.
Philippine Blooming Mills has a personality
distinct and separate from the family of
petitioners-appellees — this despite the
fact that the members of the said family
happened to be stockholders of said
corporate entity.
xxx xxx xxx
. . . . The burden of proof that the debt was
contracted for the benefit of the conjugal
partnership of gains, lies with the creditor-
party litigant claiming as such. In the case
 at bar, respondent-appellant AIDC failed to
prove that the debt was contracted by
appellee-husband, for the benefit of the
conjugal partnership of gains. What is
apparent from the facts of the case is that
the judgment debt was contracted by or in
the name of the Corporation Philippine
Blooming Mills and appellee-husband only
signed as surety thereof. The debt is
clearly a corporate debt and respondent-
appellant's right of recourse against
appellee-husband as surety is only to the
extent of his corporate stockholdings. It
does not extend to the conjugal
partnership of gains of the family of
petitioners-appellees. . . . . . .17
Petitioners contend that no actual benefit need accrue
to the conjugal partnership. To support this
contention, they cite Justice J.B.L. Reyes' authoritative
opinion in the Luzon Surety Company case:
I concur in the result, but would like to
make of record that, in my opinion, the
words "all debts and obligations contracted
by the husband for the benefit of the
conjugal partnership" used in Article 161
of the Civil Code of the Philippines in
describing the charges and obligations for
which the conjugal partnership is liable do
not require that actual profit or benefit
must accrue to the conjugal partnership
from the husband's transaction; but it
suffices that the transaction should be one
that normally would produce such benefit
for the partnership. This is the ratio behind
our ruling in Javier vs. Osmeña, 34 Phil.
336, that obligations incurred by the
husband in the practice of his profession
are collectible from the conjugal
partnership.
The aforequoted concurring opinion agreed with the
majority decision that the conjugal partnership should
not be made liable for the surety agreement which
was clearly for the benefit of a third party. Such
opinion merely registered an exception to what may
be construed as a sweeping statement that in all cases
actual profit or benefit must accrue to the conjugal
partnership. The opinion merely made it clear that no
actual benefits to the family need be proved in some
cases such as in the Javier case. There, the husband
was the principal obligor himself. Thus, said
transaction was found to be "one that would normally
produce . . . benefit for the partnership." In the later
case of G-Tractors, Inc., the husband was also the
principal obligor — not merely the surety. This latter
case, therefore, did not create any precedent. It did
not also supersede the Luzon Surety Company case,
nor any of the previous accommodation contract
cases, where this Court ruled that they were for the
benefit of third parties.
But it could be argued, as the petitioner suggests, that
even in such kind of contract of accommodation, a
benefit for the family may also result, when the
guarantee is in favor of the husband's employer.
In the case at bar, petitioner claims that the benefits
the respondent family would reasonably anticipate
were the following:
(a) The employment of co-respondent Alfredo Ching
would be prolonged and he would be entitled to his
monthly salary of P20,000.00 for an extended length
of time because of the loan he guaranteed;
(b) The shares of stock of the members of his family
would appreciate if the PBM could be rehabilitated
through the loan obtained;
(c) His prestige in the corporation would be enhanced
and his career would be boosted should PBM survive
because of the loan.
However, these are not the benefits contemplated by
Article 161 of the Civil Code. The benefits must be one
directly resulting from the loan. It cannot merely be a
by-product or a spin-off of the loan itself.
In all our decisions involving accommodation contracts
of the husband, 18 we underscored the requirement
that: "there must be the requisite showing . . . of some
advantage which clearly accrued to the welfare of the
spouses" or "benefits to his family" or "that such
obligations are productive of some benefit to the
family." Unfortunately, the petition did not present any
proof to show: (a) Whether or not the corporate
existence of PBM was prolonged and for how many
months or years; and/or (b) Whether or not the PBM
was saved by the loan and its shares of stock
appreciated, if so, how much and how substantial was
the holdings of the Ching family.
Such benefits (prospects of longer employment and
probable increase in the value of stocks) might have
been already apparent or could be anticipated at the
time the accommodation agreement was entered into.
But would those "benefits" qualify the transaction as
one of the "obligations . . . for the benefit of the
conjugal partnership"? Are indirect and remote
probable benefits, the ones referred to in Article 161
of the Civil Code? The Court of Appeals in denying the
motion for reconsideration, disposed of these
questions in the following manner:
No matter how one looks at it, the debt/credit
respondents-appellants is purely a corporate debt
granted to PBM, with petitioner-appellee-husband
merely signing as surety. While such petitioner-
appellee-husband, as such surety, is solidarily liable
with the principal debtor AIDC, such liability under the
Civil Code provisions is specifically restricted by Article
122 (par. 1) of the Family Code, so that debts for
which the husband is liable may not be charged
against conjugal partnership properties. Article 122 of
the Family Code is explicit — "The payment of personal
debts contracted by the husband or the wife before or
during the marriage shall not be charged to the
conjugal partnership except insofar as they redounded
to the benefit of the family.
Respondents-appellants insist that the corporate debt
in question falls under the exception laid down in said
Article 122 (par. one). We do not agree. The loan
procured from respondent-appellant AIDC was for the
sole advancement and benefit of Philippine Blooming
Mills and not for the benefit of the conjugal
partnership of petitioners-appellees.
. . . appellee-husband derives salaries, dividends
benefits from Philippine Blooming Mills (the debtor
corporation), only because said husband is an
employee of said PBM. These salaries and benefits, are
not the "benefits" contemplated by Articles 121 and
122 of the Family Code. The "benefits" contemplated
by the exception in Article 122 (Family Code) is that
benefit derived directly from the use of the loan. In
the case at bar, the loan is a corporate loan extended
to PBM and used by PBM itself, not by petitioner-
appellee-husband or his family. The alleged benefit, if
any, continuously harped by respondents-appellants,
are not only incidental but also speculative. 19
We agree with the respondent court. Indeed,
considering the odds involved in guaranteeing a large
amount (P50,000,000.00) of loan, the probable
prolongation of employment in PBM and increase in
value of its stocks, would be too small to qualify the
transaction as one "for the benefit" of the surety's
family. Verily, no one could say, with a degree of
certainty, that the said contract is even "productive of
some benefits" to the conjugal partnership.
We likewise agree with the respondent court (and this
view is not contested by the petitioners) that the
provisions of the Family Code is applicable in this case.
These provisions highlight the underlying concern of
the law for the conservation of the conjugal
partnership; for the husband's duty to protect and
safeguard, if not augment, not to dissipate it.
This is the underlying reason why the Family Code
clarifies that the obligations entered into by one of the
spouses must be those that redounded to the benefit
of the family and that the measure of the partnership's
liability is to "the extent that the family is
benefited."20
These are all in keeping with the spirit and intent of
the other provisions of the Civil Code which prohibits
any of the spouses to donate or convey gratuitously
any part of the conjugal property. 21 Thus, when co-
respondent Alfredo Ching entered into a surety
agreement he, from then on, definitely put in peril the
conjugal property (in this case, including the family
home) and placed it in danger of being taken
gratuitously as in cases of donation.
In the second assignment of error, the petitioner
advances the view that acting as surety is part of the
business or profession of the respondent-husband.
This theory is new as it is novel.
The respondent court correctly observed that:
Signing as a surety is certainly not an exercise of an
industry or profession, hence the cited cases of Cobb-
Perez vs. Lantin; Abella de Diaz vs. Erlanger &
Galinger; G-Tractors, Inc. vs. CAdo not apply in the
instant case. Signing as a surety is not embarking in a
business.22
We are likewise of the view that no matter how often
an executive acted or was persuaded to act, as a
surety for his own employer, this should not be taken
to mean that he had thereby embarked in the business
of suretyship or guaranty.
This is not to say, however, that we are unaware that WHEREFORE, the petition for review should be, as it is
executives are often asked to stand as surety for their hereby, DENIED for lack of merit.
company's loan obligations. This is especially true if
the corporate officials have sufficient property of their SO ORDERED.
own; otherwise, their spouses' signatures are required
in order to bind the conjugal partnerships.

The fact that on several occasions the lending

institutions did not require the signature of the wife
and the husband signed alone does not mean that
being a surety became part of his profession. Neither
could he be presumed to have acted for the conjugal
partnership.

Article 121, paragraph 3, of the Family Code is

emphatic that the payment of personal debts
contracted by the husband or the wife before or during
the marriage shall not be charged to the conjugal
partnership except to the extent that they redounded
to the benefit of the family.

Here, the property in dispute also involves the family

home. The loan is a corporate loan not a personal one.
Signing as a surety is certainly not an exercise of an
industry or profession nor an act of administration for
the benefit of the family.

On the basis of the facts, the rules, the law and equity,
the assailed decision should be upheld as we now
uphold it. This is, of course, without prejudice to
petitioner's right to enforce the obligation in its favor
against the PBM receiver in accordance with the
rehabilitation program and payment schedule
approved or to be approved by the Securities &
Exchange Commission.
G.R. No. 124642 February 23, 2004
ALFREDO CHING and ENCARNACION CHING, petitioners
vs.
THE HON. COURT OF APPEALS and ALLIED BANKING
CORPORATION, respondents.
DECISION
CALLEJO, SR., J.:
This petition for review, under Rule 45 of the Revised Rules
of Court, assails the Decision1 of the Court of Appeals (CA)
dated November 27, 1995 in CA-G.R. SP No. 33585, as well
as the Resolution2 on April 2, 1996 denying the petitioners’
motion for reconsideration. The impugned decision granted
the private respondent’s petition for certiorariand set aside
the Orders of the trial court dated December 15, 19933 and
February 17, 19944 nullifying the attachment of 100,000
shares of stocks of the Citycorp Investment Philippines under
the name of petitioner Alfredo Ching.
The following facts are undisputed:
On September 26, 1978, the Philippine Blooming Mills
Company, Inc. (PBMCI) obtained a loan of ₱9,000,000.00
from the Allied Banking Corporation (ABC). By virtue of this
loan, the PBMCI, through its Executive Vice-President Alfredo
Ching, executed a promissory note for the said amount
promising to pay on December 22, 1978 at an interest rate
of 14% per annum.5 As added security for the said loan, on
September 28, 1978, Alfredo Ching, together with Emilio
Tañedo and Chung Kiat Hua, executed a continuing guaranty
with the ABC binding themselves to jointly and severally
guarantee the payment of all the PBMCI obligations owing
the ABC to the extent of ₱38,000,000.00.6 The loan was
subsequently renewed on various dates, the last renewal
having been made on December 4, 1980.7
Earlier, on December 28, 1979, the ABC extended another
loan to the PBMCI in the amount of ₱13,000,000.00 payable
in eighteen months at 16% interest per annum. As in the
previous loan, the PBMCI, through Alfredo Ching, executed a
promissory note to evidence the loan maturing on June 29,
1981.8 This was renewed once for a period of one month.9
The PBMCI defaulted in the payment of all its loans. Hence,
on August 21, 1981, the ABC filed a complaint for sum of
money with prayer for a writ of preliminary attachment
against the PBMCI to collect the ₱12,612,972.88 exclusive of
interests, penalties and other bank charges. Impleaded as
co-defendants in the complaint were Alfredo Ching, Emilio
Tañedo and Chung Kiat Hua in their capacity as sureties of
the PBMCI.
The case was docketed as Civil Case No. 142729 in the
Regional Trial Court of Manila, Branch XVIII.10 In its
application for a writ of preliminary attachment, the ABC
averred that the "defendants are guilty of fraud in incurring
the obligations upon which the present action is brought11 in
that they falsely represented themselves to be in a financial
position to pay their obligation upon maturity thereof."12 Its
supporting affidavit stated, inter alia, that the "[d]efendants
have removed or disposed of their properties, or [are]
ABOUT to do so, with intent to defraud their creditors."13
On August 26, 1981, after an ex-parte hearing, the trial
court issued an Order denying the ABC’s application for a
writ of preliminary attachment. The trial court decreed that
the grounds alleged in the application and that of its
supporting affidavit "are all conclusions of fact and of law"
which do not warrant the issuance of the writ prayed for.14On
motion for reconsideration, however, the trial court, in an
Order dated September 14, 1981, reconsidered its previous
order and granted the ABC’s application for a writ of
preliminary attachment on a bond of ₱12,700,000. The
order, in relevant part, stated:
With respect to the second ground relied upon for the grant
of the writ of preliminary attachment ex-parte, which is the
alleged disposal of properties by the defendants with intent
to defraud creditors as provided in Sec. 1(e) of Rule 57 of
the Rules of Court, the affidavits can only barely justify the
issuance of said writ as against the defendant Alfredo Ching
who has allegedly bound himself jointly and severally to pay
plaintiff the defendant corporation’s obligation to the plaintiff
as a surety thereof.
WHEREFORE, let a writ of preliminary attachment issue as
against the defendant Alfredo Ching requiring the sheriff of
this Court to attach all the properties of said Alfredo Ching
not exceeding ₱12,612,972.82 in value, which are within the
jurisdiction of this Court and not exempt from execution
upon, the filing by plaintiff of a bond duly approved by this
Court in the sum of Twelve Million Seven Hundred Thousand
Pesos (₱12,700,000.00) executed in favor of the defendant
Alfredo Ching to secure the payment by plaintiff to him of all
the costs which may be adjudged in his favor and all
damages he may sustain by reason of the attachment if the
court shall finally adjudge that the plaintiff was not entitled
thereto.
SO ORDERED.15
Upon the ABC’s posting of the requisite bond, the trial court
issued a writ of preliminary attachment. Subsequently,
summonses were served on the defendants,16 save Chung
Kiat Hua who could not be found.
Meanwhile, on April 1, 1982, the PBMCI and Alfredo Ching
jointly filed a petition for suspension of payments with the
Securities and Exchange Commission (SEC), docketed as
SEC Case No. 2250, at the same time seeking the PBMCI’s
rehabilitation.17
On July 9, 1982, the SEC issued an Order placing the
PBMCI’s business, including its assets and liabilities, under
rehabilitation receivership, and ordered that "all actions for
claims listed in Schedule "A" of the petition pending before
any court or tribunal are hereby suspended in whatever
stage the same may be until further orders from the
Commission."18 The ABC was among the PBMCI’s creditors
named in the said schedule.
Subsequently, on January 31, 1983, the PBMCI and Alfredo
Ching jointly filed a Motion to Dismiss and/or motion to
suspend the proceedings in Civil Case No. 142729 invoking
the PBMCI’s pending application for suspension of payments
(which Ching co-signed) and over which the SEC had already
assumed jurisdiction.19 On February 4, 1983, the ABC filed
its Opposition thereto.20
In the meantime, on July 26, 1983, the deputy sheriff of the
trial court levied on attachment the 100,000 common shares
of Citycorp stocks in the name of Alfredo Ching.21
Thereafter, in an Order dated September 16, 1983, the trial
court partially granted the aforementioned motion by
suspending the proceedings only with respect to the PBMCI.
It denied Ching’s motion to dismiss the complaint/or suspend
the proceedings and pointed out that P.D. No. 1758 only
concerns the activities of corporations, partnerships and
associations and was never intended to regulate and/or
control activities of individuals. Thus, it directed the
individual defendants to file their answers.22
Instead of filing an answer, Ching filed on January 14, 1984
a Motion to Suspend Proceedings on the same ground of the
pendency of SEC Case No. 2250. This motion met the
opposition from the ABC.23
On January 20, 1984, Tañedo filed his Answer with
counterclaim and cross-claim.24 Ching eventually filed his
Answer on July 12, 1984.25
On October 25, 1984, long after submitting their answers,
Ching filed an Omnibus Motion,26 again praying for the
dismissal of the complaint or suspension of the proceedings
on the ground of the July 9, 1982 Injunctive Order issued in
SEC Case No. 2250. He averred that as a surety of the
PBMCI, he must also necessarily benefit from the defenses of
his principal. The ABC opposed Ching’s omnibus motion.
Emilio Y. Tañedo, thereafter, filed his own Omnibus
Motion27 praying for the dismissal of the complaint, arguing
that the ABC had "abandoned and waived" its right to
proceed against the continuing guaranty by its act of
resorting to preliminary attachment.
On December 17, 1986, the ABC filed a Motion to Reduce the
amount of his preliminary attachment bond from
₱12,700,000 to ₱6,350,000.28 Alfredo Ching opposed the
motion,29 but on April 2, 1987, the court issued an Order
setting the incident for further hearing on May 28, 1987 at
8:30 a.m. for the parties to adduce evidence on the actual
value of the properties of Alfredo Ching levied on by the
sheriff.30
On March 2, 1988, the trial court issued an Order granting
the motion of the ABC and rendered the attachment bond of
₱6,350,000.31
On November 16, 1993, Encarnacion T. Ching, assisted by
her husband Alfredo Ching, filed a Motion to Set Aside the
levy on attachment. She alleged inter alia that the 100,000
shares of stocks levied on by the sheriff were acquired by her
and her husband during their marriage out of conjugal funds
after the Citycorp Investment Philippines was established in
1974. Furthermore, the indebtedness covered by the
continuing guaranty/comprehensive suretyship contract
executed by petitioner Alfredo Ching for the account of
PBMCI did not redound to the benefit of the conjugal
partnership. She, likewise, alleged that being the wife of
Alfredo Ching, she was a third-party claimant entitled to file
a motion for the release of the properties.32 She attached
therewith a copy of her marriage contract with Alfredo
Ching.33
The ABC filed a comment on the motion to quash preliminary
attachment and/or motion to expunge records, contending
that:
2.1 The supposed movant, Encarnacion T. Ching, is
not a party to this present case; thus, she has no
personality to file any motion before this Honorable
Court;
 2.2 Said supposed movant did not file any Motion for
Intervention pursuant to Section 2, Rule 12 of the
Rules of Court;
2.3 Said Motion cannot even be construed to be in the
nature of a Third-Party Claim conformably with Sec.
14, Rule 57 of the Rules of Court.
3. Furthermore, assuming in gracia argumenti that the
supposed movant has the required personality, her Motion
cannot be acted upon by this Honorable Court as the above-
entitled case is still in the archives and the proceedings
thereon still remains suspended. And there is no previous
Motion to revive the same.34
The ABC also alleged that the motion was barred by
prescription or by laches because the shares of stocks were
in custodia legis.
During the hearing of the motion, Encarnacion T. Ching
adduced in evidence her marriage contract to Alfredo Ching
to prove that they were married on January 8, 1960;35 the
articles of incorporation of Citycorp Investment Philippines
dated May 14, 1979;36 and, the General Information Sheet of
the corporation showing that petitioner Alfredo Ching was a
member of the Board of Directors of the said corporation and
was one of its top twenty stockholders.
On December 10, 1993, the Spouses Ching filed their
Reply/Opposition to the motion to expunge records.
Acting on the aforementioned motion, the trial court issued
on December 15, 1993 an Order37 lifting the writ of
preliminary attachment on the shares of stocks and ordering
the sheriff to return the said stocks to the petitioners. The
dispositive portion reads:
WHEREFORE, the instant Motion to Quash Preliminary
Attachment, dated November 9, 1993, is hereby granted. Let
the writ of preliminary attachment subject matter of said
motion, be quashed and lifted with respect to the attached
100,000 common shares of stock of Citycorp Investment
Philippines in the name of the defendant Alfredo Ching, the
said shares of stock to be returned to him and his movant-
spouse by Deputy Sheriff Apolonio A. Golfo who effected the
levy thereon on July 26, 1983, or by whoever may be
presently in possession thereof.
SO ORDERED.38
The plaintiff Allied Banking Corporation filed a motion for the
reconsideration of the order but denied the same on
February 17, 1994. The petitioner bank forthwith filed a
petition for certiorari with the CA, docketed as CA-G.R. SP
No. 33585, for the nullification of the said order of the court,
contending that:
1. The respondent Judge exceeded his authority
thereby acted without jurisdiction in taking cognizance
of, and granting a "Motion" filed by a complete
stranger to the case.
2. The respondent Judge committed a grave abuse of
discretion in lifting the writ of preliminary attachment
without any basis in fact and in law, and contrary to
established jurisprudence on the matter.39
On November 27, 1995, the CA rendered judgment granting
the petition and setting aside the assailed orders of the trial
court, thus:
WHEREFORE, premises considered, the petition is GRANTED,
hereby setting aside the questioned orders (dated December
15, 1993 and February 17, 1994) for being null and void.
SO ORDERED.40
The CA sustained the contention of the private respondent
and set aside the assailed orders. According to the CA, the
RTC deprived the private respondent of its right to file a
bond under Section 14, Rule 57 of the Rules of Court. The
petitioner Encarnacion T. Ching was not a party in the trial
court; hence, she had no right of action to have the levy
annulled with a motion for that purpose. Her remedy in such
case was to file a separate action against the private
respondent to nullify the levy on the 100,000 Citycorp shares
of stocks. The court stated that even assuming that
Encarnacion T. Ching had the right to file the said motion,
the same was barred by laches.
Citing Wong v. Intermediate Appellate Court,41 the CA ruled
that the presumption in Article 160 of the New Civil Code
shall not apply where, as in this case, the petitioner-spouses
failed to prove the source of the money used to acquire the
shares of stock. It held that the levied shares of stocks
belonged to Alfredo Ching, as evidenced by the fact that the
said shares were registered in the corporate books of
Citycorp solely under his name. Thus, according to the
appellate court, the RTC committed a grave abuse of its
discretion amounting to excess or lack of jurisdiction in
issuing the assailed orders. The petitioners’ motion for
reconsideration was denied by the CA in a Resolution dated
April 2, 1996.
The petitioner-spouses filed the instant petition for review on
certiorari, asserting that the RTC did not commit any grave
abuse of discretion amounting to excess or lack of
jurisdiction in issuing the assailed orders in their favor;
hence, the CA erred in reversing the same. They aver that
the source of funds in the acquisition of the levied shares of
stocks is not the controlling factor when invoking the
presumption of the conjugal nature of stocks under Art.
160,42 and that such presumption subsists even if the
property is registered only in the name of one of the
spouses, in this case, petitioner Alfredo Ching.43 According to
the petitioners, the suretyship obligation was not contracted
in the pursuit of the petitioner-husband’s profession or
business.44 And, contrary to the ruling of the CA, where
conjugal assets are attached in a collection suit on an
obligation contracted by the husband, the wife should
exhaust her motion to quash in the main case and not file a
separate suit.45 Furthermore, the petitioners contend that
under Art. 125 of the Family Code, the petitioner-husband’s
gratuitous suretyship is null and void ab initio,46 and that the
share of one of the spouses in the conjugal partnership
remains inchoate until the dissolution and liquidation of the
partnership.47
In its comment on the petition, the private respondent
asserts that the CA correctly granted its petition for certiorari
nullifying the assailed order. It contends that the CA
correctly relied on the ruling of this Court in Wong v.
Intermediate Appellate Court. Citing Cobb-Perez v. Lantin
and G-Tractors, Inc. v. Court of Appeals, the private
respondent alleges that the continuing guaranty and
suretyship executed by petitioner Alfredo Ching in pursuit of
his profession or business. Furthermore, according to the
private respondent, the right of the petitioner-wife to a share
in the conjugal partnership property is merely inchoate
before the dissolution of the partnership; as such, she had
no right to file the said motion to quash the levy on
attachment of the shares of stocks.
The issues for resolution are as follows: (a) whether the
petitioner-wife has the right to file the motion to quash the
levy on attachment on the 100,000 shares of stocks in the
Citycorp Investment Philippines; (b) whether or not the RTC
committed a grave abuse of its discretion amounting to
excess or lack of jurisdiction in issuing the assailed orders.
On the first issue, we agree with the petitioners that the
petitioner-wife had the right to file the said motion, although
she was not a party in Civil Case No. 142729.48
In Ong v. Tating,49 we held that the sheriff may attach only
those properties of the defendant against whom a writ of
attachment has been issued by the court. When the sheriff
erroneously levies on attachment and seizes the property of
a third person in which the said defendant holds no right or
interest, the superior authority of the court which has
authorized the execution may be invoked by the aggrieved
third person in the same case. Upon application of the third
person, the court shall order a summary hearing for the
purpose of determining whether the sheriff has acted rightly
or wrongly in the performance of his duties in the execution
of the writ of attachment, more specifically if he has indeed
levied on attachment and taken hold of property not
belonging to the plaintiff. If so, the court may then order the
sheriff to release the property from the erroneous levy and
to return the same to the third person. In resolving the
motion of the third party, the court does not and cannot pass
upon the question of the title to the property with any
character of finality. It can treat the matter only insofar as
may be necessary to decide if the sheriff has acted correctly
or not. If the claimant’s proof does not persuade the court of
the validity of the title, or right of possession thereto, the
claim will be denied by the court. The aggrieved third party
may also avail himself of the remedy of "terceria" by
executing an affidavit of his title or right of possession over
the property levied on attachment and serving the same to
the office making the levy and the adverse party. Such party
may also file an action to nullify the levy with damages
resulting from the unlawful levy and seizure, which should be
a totally separate and distinct action from the former case.
The above-mentioned remedies are cumulative and any one
of them may be resorted to by one third-party claimant
without availing of the other remedies.50
In this case, the petitioner-wife filed her motion to set aside
the levy on attachment of the 100,000 shares of stocks in
the name of petitioner-husband claiming that the said shares
of stocks were conjugal in nature; hence, not liable for the
account of her husband under his continuing guaranty and
suretyship agreement with the PBMCI. The petitioner-wife
had the right to file the motion for said relief.
On the second issue, we find and so hold that the CA erred in
setting aside and reversing the orders of the RTC. The
private respondent, the petitioner in the CA, was burdened
to prove that the RTC committed a grave abuse of its
discretion amounting to excess or lack of jurisdiction. The
tribunal acts without jurisdiction if it does not have the legal
purpose to determine the case; there is excess of jurisdiction
where the tribunal, being clothed with the power to
determine the case, oversteps its authority as determined by
law. There is grave abuse of discretion where the tribunal
acts in a capricious, whimsical, arbitrary or despotic manner
in the exercise of its judgment and is equivalent to lack of
jurisdiction.51
It was incumbent upon the private respondent to adduce a
sufficiently strong demonstration that the RTC acted
whimsically in total disregard of evidence material to, and
even decide of, the controversy before certiorari will lie. A
special civil action for certiorari is a remedy designed for the
correction of errors of jurisdiction and not errors of
judgment. When a court exercises its jurisdiction, an error
committed while so engaged does not deprive it of its
jurisdiction being exercised when the error is committed.52
After a comprehensive review of the records of the RTC and
of the CA, we find and so hold that the RTC did not commit
any grave abuse of its discretion amounting to excess or lack
of jurisdiction in issuing the assailed orders.
Article 160 of the New Civil Code provides that all the
properties acquired during the marriage are presumed to
belong to the conjugal partnership, unless it be proved that it
pertains exclusively to the husband, or to the wife. In Tan v.
Court of Appeals,53 we held that it is not even necessary to
prove that the properties were acquired with funds of the
partnership. As long as the properties were acquired by the
parties during the marriage, they are presumed to be
conjugal in nature. In fact, even when the manner in which
the properties were acquired does not appear, the
presumption will still apply, and the properties will still be
considered conjugal. The presumption of the conjugal nature
of the properties acquired during the marriage subsists in the
absence of clear, satisfactory and convincing evidence to
overcome the same.54
In this case, the evidence adduced by the petitioners in the
RTC is that the 100,000 shares of stocks in the Citycorp
Investment Philippines were issued to and registered in its
corporate books in the name of the petitioner-husband when
the said corporation was incorporated on May 14, 1979. This
was done during the subsistence of the marriage of the
petitioner-spouses. The shares of stocks are, thus, presumed
to be the conjugal partnership property of the petitioners.
The private respondent failed to adduce evidence that the
petitioner-husband acquired the stocks with his exclusive
money.55 The barefaced fact that the shares of stocks were
registered in the corporate books of Citycorp Investment
Philippines solely in the name of the petitioner-husband does
not constitute proof that the petitioner-husband, not the
conjugal partnership, owned the same.56 The private
respondent’s reliance on the rulings of this Court in Maramba
v. Lozano57 and Associated Insurance & Surety Co., Inc. v.
Banzon58 is misplaced. In the Maramba case, we held that
where there is no showing as to when the property was
acquired, the fact that the title is in the wife’s name alone is
determinative of the ownership of the property. The principle
was reiterated in the Associated Insurance case where the
uncontroverted evidence showed that the shares of stocks
were acquired during the marriage of the petitioners.
Instead of fortifying the contention of the respondents, the
ruling of this Court in Wong v. Intermediate Appellate
Court59 buttresses the case for the petitioners. In that case,
we ruled that he who claims that property acquired by the
spouses during their marriage is not conjugal partnership
property but belongs to one of them as his personal property
is burdened to prove the source of the money utilized to
purchase the same. In this case, the private respondent
claimed that the petitioner-husband acquired the shares of
stocks from the Citycorp Investment Philippines in his own
name as the owner thereof. It was, thus, the burden of the
private respondent to prove that the source of the money
utilized in the acquisition of the shares of stocks was that of
the petitioner-husband alone. As held by the trial court, the
private respondent failed to adduce evidence to prove this
assertion.
The CA, likewise, erred in holding that by executing a
continuing guaranty and suretyship agreement with the
private respondent for the payment of the PBMCI loans, the
petitioner-husband was in the exercise of his profession,
pursuing a legitimate business. The appellate court erred in
concluding that the conjugal partnership is liable for the said
account of PBMCI under Article 161(1) of the New Civil Code.
Article 161(1) of the New Civil Code (now Article 121[2 and
3]60 of the Family Code of the Philippines) provides:
Art. 161. The conjugal partnership shall be liable for:
(1) All debts and obligations contracted by the husband for
the benefit of the conjugal partnership, and those contracted
by the wife, also for the same purpose, in the cases where
she may legally bind the partnership.
The petitioner-husband signed the continuing guaranty and
suretyship agreement as security for the payment of the loan
obtained by the PBMCI from the private respondent in the
amount of ₱38,000,000. In Ayala Investment and
Development Corp. v. Court of Appeals,61 this Court ruled
"that the signing as surety is certainly not an exercise of an
industry or profession. It is not embarking in a business. No
matter how often an executive acted on or was persuaded to
act as surety for his own employer, this should not be taken
to mean that he thereby embarked in the business of
suretyship or guaranty."
For the conjugal partnership to be liable for a liability that
should appertain to the husband alone, there must be a
showing that some advantages accrued to the spouses.
Certainly, to make a conjugal partnership responsible for a
liability that should appertain alone to one of the spouses is
to frustrate the objective of the New Civil Code to show the
utmost concern for the solidarity and well being of the family
as a unit. The husband, therefore, is denied the power to
assume unnecessary and unwarranted risks to the financial
stability of the conjugal partnership.62
In this case, the private respondent failed to prove that the
conjugal partnership of the petitioners was benefited by the
petitioner-husband’s act of executing a continuing guaranty
and suretyship agreement with the private respondent for
and in behalf of PBMCI. The contract of loan was between
the private respondent and the PBMCI, solely for the benefit
of the latter. No presumption can be inferred from the fact
that when the petitioner-husband entered into an
accommodation agreement or a contract of surety, the
conjugal partnership would thereby be benefited. The private
respondent was burdened to establish that such benefit
redounded to the conjugal partnership.63
It could be argued that the petitioner-husband was a
member of the Board of Directors of PBMCI and was one of
its top twenty stockholders, and that the shares of stocks of
the petitioner-husband and his family would appreciate if the
PBMCI could be rehabilitated through the loans obtained;
that the petitioner-husband’s career would be enhanced
should PBMCI survive because of the infusion of fresh capital.
However, these are not the benefits contemplated by Article
161 of the New Civil Code. The benefits must be those ASIDE AND REVERSED. The assailed orders of the RTC are
directly resulting from the loan. They cannot merely be a by- AFFIRMED.
product or a spin-off of the loan itself.64
SO ORDERED.
This is different from the situation where the husband
borrows money or receives services to be used for his own
business or profession. In the Ayala case, we ruled that it is
such a contract that is one within the term "obligation for the
benefit of the conjugal partnership." Thus:

(A) If the husband himself is the principal obligor in the

contract, i.e., he directly received the money and services to
be used in or for his own business or his own profession, that
contract falls within the term "… obligations for the benefit of
the conjugal partnership." Here, no actual benefit may be
proved. It is enough that the benefit to the family is
apparent at the time of the signing of the contract. From the
very nature of the contract of loan or services, the family
stands to benefit from the loan facility or services to be
rendered to the business or profession of the husband. It is
immaterial, if in the end, his business or profession fails or
does not succeed. Simply stated, where the husband
contracts obligations on behalf of the family business, the
law presumes, and rightly so, that such obligation will
redound to the benefit of the conjugal partnership.65

The Court held in the same case that the rulings of the Court
in Cobb-Perez and G-Tractors, Inc. are not controlling
because the husband, in those cases, contracted the
obligation for his own business. In this case, the petitioner-
husband acted merely as a surety for the loan contracted by
the PBMCI from the private respondent.

IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED.

The Decision and Resolution of the Court of Appeals are SET
 FRANCISCO VS GONZALES
AUSTRIA-MARTINEZ, J.:
Assailed in the present petition for review
on certiorari under Rule 45 of the Rules of Court is the
Court of Appeals (CA) Decision dated April 30, 2007,
which affirmed the Regional Trial Court (RTC) Orders
dated June 4, 2003 and July 31, 2003, denying
petitioners' motion to stop execution sale.
Petitioners Cleodia U. Francisco and Ceamantha U.
Francisco are the minor children of Cleodualdo M.
Francisco (Cleodualdo) and Michele Uriarte Francisco
(Michele). In a Partial Decision dated November 29,
2000 rendered by the RTC of Makati, Branch 144, in
Civil Case No. 93-2289 for Declaration of Nullity of
Marriage, the Compromise Agreement entered into by
the estranged couple was approved. The Compromise
Agreement contained in part the following provisions:
7. In their desire to manifest their genuine concern for
their children, Cleodia and Ceamantha, Cleodualdo and
Michelle have voluntarily agreed to herein set forth
their obligations, rights and responsibilities on matters
relating to their children's support, custody, visitation,
as well as to the dissolution of their conjugal
partnership of gains as follows:
(a) Title and ownership of the conjugal property
consisting of a house and lot located in Ayala Alabang,
Muntinlupa, Metro Manila shall be transferred by way
of a deed of donation to Cleodia and Ceamantha, as
co-owners, when they reach nineteen (19) and
eighteen (18) years old, respectively, subject to the
following conditions:
x x x1
The property subject of the Compromise Agreement is
a house and lot covered by Transfer Certificate of Title
No. 167907 in the name of Cleodualdo M. Francisco,
married to Michele U. Francisco, with an area of 414
square meters, and located in 410 Taal St., Ayala
Alabang Village, Muntinlupa City.2
Meanwhile, in a case for Unlawful Detainer with
Preliminary Attachment filed by spouses Jorge C.
Gonzales and Purificacion W. Gonzales (respondents)
against George Zoltan Matrai (Matrai) and Michele, the
Metropolitan Trial Court (MeTC) of Muntinlupa City,
Branch 80, rendered a Decision dated May 10, 2001,
ordering Matrai and Michele to vacate the premises
leased to them located in 264 Lanka Drive, Ayala
Alabang Village, Muntinlupa City, and to pay back
rentals, unpaid telephone bills and attorney's fees.3
Pending appeal with the RTC of Muntinlupa, Branch
256, an order was issued granting respondents' prayer
for the execution of the MeTC Decision.4 A notice of
sale by execution was then issued by the sheriff
covering the real property under Transfer Certificate of
Title No. T-167907 in the name of Cleodualdo M.
Francisco, married to Michele U. Francisco.5
When petitioners' grandmother learned of the
scheduled auction, she, as guardian-in-fact of
petitioners, filed with the RTC an Affidavit of Third
Party Claim6 and a Very Urgent Motion to Stop Sale by
Execution7 but this was denied in the Order dated June
4, 2003.8 Petitioners' motion for reconsideration was
denied per RTC Order dated July 31, 2003.9
Petitioners then filed a petition for certiorari with the
CA.
Pending resolution by the CA, the RTC issued an Order
dated July 8, 2005, granting respondents' petition for
the issuance of a new certificate of title.10 The RTC also
issued an Order on February 13, 2006, granting
respondents' motion for the issuance of a writ of
possession.11
On April 30, 2007, the CA dismissed the petition, the
dispositive portion of which reads:
WHEREFORE, premises considered, the Petition is
hereby DISMISSED. The Order(s), dated June 4, 2003
and July 31, 2003, of the Regional Trial Court of
Muntinlupa City, Br. 256, in Civil Case No. 01-201,
STAND. Costs against the Petitioners.
SO ORDERED.12
Hence, herein petition. As prayed for, the Court issued
a temporary restraining order on July 11, 2007,
enjoining respondents, the RTC, the Register of Deeds,
and the Sheriff from implementing or enforcing the
RTC Order dated July 8, 2005, canceling TCT No.
167907 and Order dated February 13, 2006, issuing a
writ of possession, until further orders from the
Court.13
Petitioners argue that: (1) they are the rightful owners
of the property as the Partial Decision issued by the
RTC of Makati in Civil Case No. 93-2289 had already
become final; (2) their parents already waived in their
favor their rights over the property; (3) the adjudged
obligation of Michele in the ejectment case did not
redound to the benefit of the family; (4) Michele's
obligation is a joint obligation between her and Matrai,
not joint and solidary.14
T_ftn4he Court finds that it was grave error for the
RTC to proceed with the execution, levy and sale of
the subject property. The power of the court in
executing judgments extends only to
properties unquestionably belonging to the
judgment debtor alone,15 in the present case to
those belonging to Michele and Matrai. One man's
goods shall not be sold for another man's debts.16
_ftn4
To begin with, the RTC should not have ignored that
TCT No. 167907 is in the name of "Cleodualdo M.
Francisco, married to Michele U. Francisco." On its
face, the title shows that the registered owner of the
property is not Matrai and Michele but Cleodualdo,
married to Michele. This describes the civil status of
Cleodualdo at the time the property was acquired.17
Records show that Cleodualdo and Michele were
married on June 12, 1986, prior to the effectivity of
the Family Code on August 3, 1988. As such, their
property relations are governed by the Civil Code on
conjugal partnership of gains.
The CA acknowledged that ownership of the subject
property is conjugal in nature;18 however, it ruled that
since Michele's obligation was not proven to be a
personal debt, it must be inferred that it is conjugal
and redounded to the benefit of the family, and hence,
the property may be held answerable for it.19_ftn4
The Court does not agree.
A wife may bind the conjugal partnership only when
she purchases things necessary for the support of the
family, or when she borrows money for that purpose
upon her husband's failure to deliver the needed sum;
when administration of the conjugal partnership is
transferred to the wife by the courts or by the
husband; or when the wife gives moderate donations
for charity. Failure to establish any of these
circumstances means that the conjugal asset may not
be bound to answer for the wife's personal
obligation.20 Considering that the foregoing
circumstances are evidently not present in this case as
the liability incurred by Michele arose from a judgment
rendered in an unlawful detainer case against her and
her partner Matrai.
_ftn4
Furthermore, even prior to the issuance of the Notice
of Levy on Execution on November 28, 2001,21 there
was already annotated on the title the following
inscription:
Entry No. 23341-42/T-167907 – Nullification of
Marriage
By order of the Court RTC, NCR, Branch 144, Makati
City dated July 4, 2001, which become final and
executory on October 18, 2001 declaring the Marriage
Contract between Michelle Uriarte and Cleodualdo M.
Francisco, Jr. is null & void ab initio and title of
ownership of the conjugal property consisting of the
above-described property shall be transferred by way
of a Deed of Donation to Cleodia Michaela U. Francisco
and Ceamantha Maica U. Francisco, as co-owners
when they reach nineteen (19) and eighteen (18) yrs.
old to the condition that Cleodualdo, shall retain
usufructuary rights over the property until he reaches
the age of 65 yrs. Old.
This annotation should have put the RTC and the
sheriff on guard, and they should not have proceeded
with the execution of the judgment debt of Michele and
Matrai.
_ftn4
While the trial court has the competence to identify
and to secure properties and interest therein held by
the judgment debtor for the satisfaction of a money
judgment rendered against him, such exercise of its
authority is premised on one important fact: that the
properties levied upon, or sought to be levied upon,
are properties unquestionably owned by the
judgment debtor and are not exempt by law from
execution.23 Also, a sheriff is not authorized to attach
or levy on property not belonging to the judgment
debtor, and even incurs liability if he wrongfully levies
upon the property of a third person. A sheriff has no
authority to attach the property of any person under
execution except that of the judgment debtor.24
_ftn4It should be noted that the judgment debt for
which the subject property was being made to answer
was incurred by Michele and her partner,25 Matrai.
Respondents allege that the lease of the property in
Lanka Drive redounded to the benefit of the
family.26 By no stretch of one's imagination can it be
concluded that said debt/obligation was incurred for
the benefit of the conjugal partnership or that some
advantage accrued to the welfare of the family. In BA
Finance Corporation v. Court of Appeals,27 the Court
ruled that the petitioner cannot enforce the obligation
contracted by Augusto Yulo against his conjugal
properties with respondent Lily Yulo because it was not
established that the obligation contracted by the
husband redounded to the benefit of the conjugal
partnership under Article 161 of the Civil Code. The
Court stated:
_ftn4
In the present case, the obligation which the petitioner
is seeking to enforce against the conjugal property
managed by the private respondent Lily Yulo was
undoubtedly contracted by Augusto Yulo for his own
benefit because at the time he incurred the obligation
he had already abandoned his family and had left their
conjugal home. Worse, he made it appear that he was
duly authorized by his wife in behalf of A & L
Industries, to procure such loan from the petitioner.
Clearly, to make A & L Industries liable now for the
said loan would be unjust and contrary to the express
provision of the Civil Code. (Emphasis supplied)
_ftn4
Similarly in this case, Michele, who was then already
living separately from Cleodualdo,28 rented the house
in Lanka Drive for her and Matrai’s own benefit. In
fact, when they entered into the lease agreement,
Michele and Matrai purported themselves to be
husband and wife.29 Respondents’ bare allegation that
petitioners lived with Michele on the leased property is
not sufficient to support the conclusion that the
judgment debt against Michele and Matrai in the
ejectment suit redounded to the benefit of the family
of Michele and Cleodualdo and petitioners. Thus,
in Homeowners Savings and Loan Bank v. Dailo, the
Court stated thus:
x x x Ei incumbit probatio qui dicit, non qui negat (he
who asserts, not he who denies, must prove).
Petitioner’s sweeping conclusion that the loan obtained
by the late Marcelino Dailo, Jr. to finance the
construction of housing units without a doubt
redounded to the benefit of his family, without
adducing adequate proof, does not persuade this
Court. Other than petitioner’s bare allegation, there is
nothing from the records of the case to compel a
finding that, indeed, the loan obtained by the late
Marcelino Dailo, Jr. redounded to the benefit of the
family. Consequently, the conjugal partnership cannot
be held liable for the payment of the principal
obligation.30
_ftn4
To hold the property in Taal St. liable for the
obligations of Michele and Matrai would be going
against the spirit and avowed objective of the Civil
Code to give the utmost concern for the solidarity and
well-being of the family as a unit.31
_ftn4
In justifying the levy against the property, the RTC
went over the Compromise Agreement as embodied in
the Partial Decision dated November 29, 2000. Oddly,
the RTC ruled that there was no effective transfer of
ownership to the siblings Cleodia and Ceamantha
Francisco. In the same breath, the RTC astonishingly
ruled that Michele is now the owner of the property
inasmuch as Cleodualdo already waived his rights over
the property. The Compromise Agreement must not be
read piece-meal but in its entirety. It is provided
therein, thus:
7. In their desire to manifest their genuine concern for
their children, Cleodia and Ceamantha, Cleodualdo
and Michelle have voluntarily agreed to herein set
forth their obligations, rights and responsibilities on
matters relating to their children's support, custody,
visitation, as well as to the dissolution of their conjugal
partnership of gains as follows:
(a) Title and ownership of the conjugal property
consisting of a house and lot located in Ayala
Alabang, Muntinlupa, Metro Manila shall be
transferred by way of a deed of donation to
Cleodia and Ceamantha, as co-owners, when
they reach nineteen (19) and eighteen (18)
years old, respectively, subject to the following
conditions:
a.1. Cleodualdo shall retain usufructuary rights over
the property until he reaches the age of 65 years old,
with the following rights and responsibilities:
x x x x32 (Emphasis supplied)
From the foregoing, it is clear that both Michele and
Cleodualdo have waived their title to and ownership of
the house and lot in Taal St. in favor of petitioners.
The property should not have been levied and sold at
execution sale, for lack of legal basis.
Verily, the CA committed an error in sustaining the
RTC Orders dated June 4, 2003 and July 31, 2003.
WHEREFORE, the petition is GRANTED. The assailed
Court of Appeals Decision dated April 30, 2007,
affirming RTC Orders dated June 4, 2003 and July 31,
2003, are hereby NULLIFIED and SET ASIDE. The
temporary restraining order issued by the Court per
Resolution of July 11, 2007 is hereby
made PERMANENT.
Costs against respondents.
SO ORDERED.
G.R. No. 145222 April 24, 2009
SPOUSES ROBERTO BUADO and VENUS
BUADO, Petitioners,
vs.
THE HONORABLE COURT OF APPEALS, Former Division,
and ROMULO NICOL, Respondents.
 DECISION
TINGA, J.:
Before this Court is a petition for certiorari assailing the
Decision1 of the Court of Appeals in CA-G.R. CV No. 47029
and its Resolution denying the motion for reconsideration
thereof.
The case stemmed from the following factual backdrop:
On 30 April 1984, Spouses Roberto and Venus Buado
(petitioners) filed a complaint for damages against Erlinda
Nicol (Erlinda) with Branch 19 of the Regional Trial Court
(RTC) of Bacoor, Cavite, docketed as Civil Case No. 84-33.
Said action originated from Erlinda Nicol’s civil liability arising
from the criminal offense of slander filed against her by
petitioners.
On 6 April 1987, the trial court rendered a decision ordering
Erlinda to pay damages. The dispositive portion reads:
Wherefore, judgment is hereby rendered in favor of the
plaintiff[s] and against defendant ordering the latter to pay
the former the amount of thirty thousand (₱30,000.00)
pesos as moral damages, five thousand (₱5,000.00) pesos as
attorney’s fees and litigation expenses, another five
thousand (₱5,000.00) pesos as exemplary damages and the
cost of suit.2
Said decision was affirmed, successively, by the Court of
Appeals and this Court. It became final and executory on 5
March 1992.
On 14 October 1992, the trial court issued a writ of
execution, a portion of which provides:
Now, therefore, you are commanded that of the goods and
chattels of the defendant Erlinda Nicol, or from her estates or
legal heirs, you cause the sum in the amount of forty
thousand pesos (₱40,000.00), Philippine Currency,
representing the moral damages, attorney’s fees and
litigation expenses and exemplary damages and the cost of
suit of the plaintiff aside from your lawful fees on this
execution and do likewise return this writ into court within
sixty (60) days from date, with your proceedings endorsed
hereon.
But if sufficient personal property cannot be found whereof
to satisfy this execution and lawful fees thereon, then you
are commanded that of the lands and buildings of said
defendant you make the said sum of money in the manner
required by the Rules of Court, and make return of your
proceedings with this writ within sixty (60) days from date.3
Finding Erlinda Nicol’s personal properties insufficient to
satisfy the judgment, the Deputy Sheriff issued a notice of
levy on real property on execution addressed to the Register
of Deeds of Cavite. The notice of levy was annotated on the
Transfer Certificate of Title No. T-125322.
On 20 November 1992, a notice of sheriff’s sale was issued.
Two (2) days before the public auction sale on 28 January
1993, an affidavit of third-party claim from one Arnulfo F.
Fulo was received by the deputy sheriff prompting petitioners
to put up a sheriff’s indemnity bond. The auction sale
proceeded with petitioners as the highest bidder.
On 4 February 1993, a certificate of sale was issued in favor
of petitioners.
Almost a year later on 2 February 1994, Romulo Nicol
(respondent), the husband of Erlinda Nicol, filed a complaint
for annulment of certificate of sale and damages with
preliminary injunction against petitioners and the deputy
sheriff. Respondent, as plaintiff therein, alleged that the
defendants, now petitioners, connived and directly levied
upon and execute his real property without exhausting the
personal properties of Erlinda Nicol. Respondent averred that
there was no proper publication and posting of the notice of
sale. Furthermore, respondent claimed that his property
which was valued at ₱500,000.00 was only sold at a "very
low price" of ₱51,685.00, whereas the judgment obligation of
Erlinda Nicol was only ₱40,000.00. The case was assigned
to Branch 21 of the RTC of Imus, Cavite.
In response, petitioners filed a motion to dismiss on the
grounds of lack of jurisdiction and that they had acted on the
basis of a valid writ of execution. Citing De Leon v.
Salvador,4 petitioners claimed that respondent should have
filed the case with Branch 19 where the judgment
originated and which issued the order of execution, writ of
execution, notice of levy and notice of sheriff’s sale.
In an Order5 dated 18 April 1994, the RTC dismissed
respondent’s complaint and ruled that Branch 19 has
jurisdiction over the case, thus:
As correctly pointed out by the defendants, any flaw in the
implementation of the writ of execution by the implementing
sheriff must be brought before the court issuing the writ of
execution. Besides, there are two (2) remedies open to the
plaintiff, if he feels that the property being levied on belongs
to him and not to the judgment debtor. The first remedy is to
file a third-party claim. If he fails to do this, a right is
reserved to him to vindicate his claim over the property by
any proper action. But certainly, this is not the proper action
reserved to the plaintiff to vindicate his claim over the
property in question to be ventilated before this court. As
earlier stated, this case should have been addressed to
Branch 19, RTC Bacoor as it was that court which issued the
writ of execution.6
Respondent moved for reconsideration but it was denied on
26 July 1994.
On appeal, the Court of Appeals reversed the trial court and
held that Branch 21 has jurisdiction to act on the complaint
filed by appellant. The dispositive portion reads:
WHEREFORE, the Orders appealed from are hereby
REVERSED and SET ASIDE. This case is REMANDED to the
Regional Trial Court of Imus, Cavite, Branch 21 for further
proceedings.
SO ORDERED.7
Petitioners’ motion for reconsideration was denied on 23
August 2000. Hence, the instant petition attributing grave
abuse of discretion on the part of the Court of Appeals.
A petition for certiorari is an extraordinary remedy that is
adopted to correct errors of jurisdiction committed by the
lower court or quasi-judicial agency, or when there is grave
abuse of discretion on the part of such court or agency
amounting to lack or excess of jurisdiction. Where the error
is not one of jurisdiction, but of law or fact which is a
mistake of judgment, the proper remedy should be appeal.
In addition, an independent action for certiorari may be
availed of only when there is no appeal or any plain, speedy
and adequate remedy in the ordinary course of law.8
Nowhere in the petition was it shown that the jurisdiction of
the Court of Appeals was questioned. The issue devolves on
whether the husband of the judgment debtor may file an
independent action to protect the conjugal property subject
to execution. The alleged error therefore is an error of
judgment which is a proper subject of an appeal.
Nevertheless, even if we were to treat this petition as one for
review, the case should still be dismissed on substantive
grounds.
Petitioners maintain that Branch 19 retained jurisdiction
over its judgment to the exclusion of all other co-ordinate
courts for its execution and all incidents thereof, in line with
De Leon v. Salvador. Petitioners insist that respondent, who
is the husband of the judgment debtor, is not the "third
party" contemplated in Section 17 (now Section 16), Rule 39
of the Rules of Court, hence a separate action need not be
filed. Furthermore, petitioners assert that the obligation of
the wife redounded to the benefit of the conjugal partnership
and cited authorities to the effect that the husband is liable
for the tort committed by his wife.
Respondent on the other hand merely avers that the decision
of the Court of Appeals is supported by substantial evidence
and in accord with law and jurisprudence.9
Verily, the question of jurisdiction could be resolved through
a proper interpretation of Section 16, Rule 39 of the Rules of
Court, which reads:
Sec. 16. Proceedings where property claimed by third
person.
If the property levied on is claimed by any person other than
the judgment obligor or his agent, and such person makes
an affidavit of his title thereto or right to the possession
thereof, stating the grounds of such right or title, and serves
the same upon the officer making the levy and a copy
thereof upon the judgment obligee, the officer shall not be
bound to keep the property, unless such judgment obligee,
on demand of the officer, files a bond approved by the court
to indemnify the third-party claimant in a sum not less than
the value of the property levied on. In case of disagreement
as to such value, the same shall be determined by the court
issuing the writ of execution. No claim for damages for the
taking or keeping of the property may be enforced against
the bond unless the action therefor is filed within one
hundred twenty (120) days from the date of the filing of the
bond.
The officer shall not be liable for damages for the taking or
keeping of the property, to any third-party claimant if such
bond is filed. Nothing herein contained shall prevent such
claimant or any third person from vindicating his claim to the
property in a separate action, or prevent the judgment
obligee from claiming damages in the same or a separate
action against a third-party claimant who filed a frivolous or
plainly spurious claim.
When the writ of execution is issued in favor of the Republic
of the Philippines, or any officer duly representing it, the
filing of such bond shall not be required, and in case the
sheriff or levying officer is sued for damages as a result of
the levy, he shall be represented by the Solicitor General and
if held liable therefor, the actual damages adjudged by the
court shall be paid by the National Treasurer out of such
funds as may be appropriated for the purpose. (Emphasis
Supplied)
Apart from the remedy of terceria available to a third-party
claimant or to a stranger to the foreclosure suit against the
sheriff or officer effecting the writ by serving on him an
affidavit of his title and a copy thereof upon the judgment
creditor, a third-party claimant may also resort to an
independent separate action, the object of which is the
recovery of ownership or possession of the property seized
by the sheriff, as well as damages arising from wrongful
seizure and detention of the property. If a separate action is
the recourse, the third-party claimant must institute in a
forum of competent jurisdiction an action, distinct and
separate from the action in which the judgment is being
enforced, even before or without need of filing a claim in the
court that issued the writ.101awphi1.zw+
A third-party claim must be filed a person other than the
judgment debtor or his agent. In other words, only a
stranger to the case may file a third-party claim.
This leads us to the question: Is the husband, who was not a
party to the suit but whose conjugal property is being
executed on account of the other spouse being the judgment
obligor, considered a "stranger?"
In determining whether the husband is a stranger to the suit,
the character of the property must be taken into account. In
Mariano v. Court of Appeals,11 which was later adopted in
Spouses Ching v. Court of Appeals,12 this Court held that the
husband of the judgment debtor cannot be deemed a
"stranger" to the case prosecuted and adjudged against his
wife for an obligation that has redounded to the benefit of
the conjugal partnership.13 On the other hand, in Naguit v.
Court of Appeals14 and Sy v. Discaya,15 the Court stated that
a spouse is deemed a stranger to the action wherein the writ
of execution was issued and is therefore justified in bringing
an independent action to vindicate her right of ownership
over his exclusive or paraphernal property.lawphil.net
Pursuant to Mariano however, it must further be settled
whether the obligation of the judgment debtor redounded to
the benefit of the conjugal partnership or not.
Petitioners argue that the obligation of the wife arising from
her criminal liability is chargeable to the conjugal
partnership. We do not agree.
There is no dispute that contested property is conjugal in
nature. Article 122 of the Family Code16 explicitly provides
that payment of personal debts contracted by the husband or
the wife before or during the marriage shall not be charged
to the conjugal partnership except insofar as they redounded
to the benefit of the family.
Unlike in the system of absolute community where liabilities
incurred by either spouse by reason of a crime or quasi-
delict is chargeable to the absolute community of property,
in the absence or insufficiency of the exclusive property of
the debtor-spouse, the same advantage is not accorded in
the system of conjugal partnership of gains. The conjugal
partnership of gains has no duty to make advance payments
for the liability of the debtor-spouse.
Parenthetically, by no stretch of imagination can it be
concluded that the civil obligation arising from the crime of
slander committed by Erlinda redounded to the benefit of the
conjugal partnership.
To reiterate, conjugal property cannot be held liable for the
personal obligation contracted by one spouse, unless some
advantage or benefit is shown to have accrued to the
conjugal partnership.17

In Guadalupe v. Tronco,18 this Court held that the car which

was claimed by the third party complainant to be conjugal
property was being levied upon to enforce "a judgment for
support" filed by a third person, the third-party claim of the
wife is proper since the obligation which is personal to the
husband is chargeable not on the conjugal property but on
his separate property.

Hence, the filing of a separate action by respondent is proper

and jurisdiction is thus vested on Branch 21. Petitioners
failed to show that the Court of Appeals committed grave
abuse of discretion in remanding the case to Branch 21 for
further proceedings.

WHEREFORE, the petition is DISMISSED. The Decision of

the Court of Appeals is AFFIRMED. Costs against
petitioners.

SO ORDERED.
G.R. No. 164201 December 10, 2012
EFREN PANA, Petitioner,
vs.
HEIRS OF JOSE JUANITE, SR. and JOSE JUANITE,
JR., Respondents.
DECISION
ABAD, J.:
This case is about the propriety of levy and execution on
conjugal properties where one of the spouses has been found
guilty of a crime and ordered to pay civil indemnities to the
victims' heirs.
The Facts and the Case
The prosecution accused petitioner Efren Pana (Efren), his
wife Melecia, and others of murder before the. Regional Trial
Court (RTC) of Surigao City in Criminal Cases 4232 and
4233.1
On July 9, 1997 the RTC rendered a consolidated
decision2 acquitting Efren of the charge for insufficiency of
evidence but finding Melecia and another person guilty as
charged and sentenced them to the penalty of death. The
RTC ordered those found guilty to pay each of the heirs of
the victims, jointly and severally, P50,000.00 as civil
indemnity, P50,000.00 each as moral damages, and
P150,000.00 actual damages.
On appeal to this Court, it affirmed on May 24, 2001 the
conviction of both accused but modified the penalty
to reclusion perpetua. With respect to the monetary awards,
the Court also affirmed the award of civil indemnity and
moral damages but deleted the award for actual damages for
lack of evidentiary basis. In its place, however, the Court
made an award of P15,000.00 each by way of temperate
damages. In addition, the Court awarded P50,000.00
exemplary damages per victim to be paid solidarily by
them.3 The decision became final and executory on October
1, 2001.4
Upon motion for execution by the heirs of the deceased, on
March 12, 2002 the RTC ordered the issuance of the
writ,5 resulting in the levy of real properties registered in the
names of Efren and Melecia.6 Subsequently, a notice of
levy7 and a notice of sale on execution8 were issued.
On April 3, 2002, petitioner Efren and his wife Melecia filed a
motion to quash the writ of execution, claiming that the
levied properties were conjugal assets, not paraphernal
assets of Melecia.9 On September 16, 2002 the RTC denied
the motion.10 The spouses moved for reconsideration but the
RTC denied the same on March 6, 2003.11
Claiming that the RTC gravely abused its discretion in issuing
the challenged orders, Efren filed a petition
for certiorari before the Court of Appeals (CA). On January
29, 2004 the CA dismissed the petition for failure to
sufficiently show that the RTC gravely abused its discretion in
issuing its assailed orders.12 It also denied Efren’s motion for
reconsideration,13 prompting him to file the present petition
for review on certiorari.
The Issue Presented
The sole issue presented in this case is whether or not the
CA erred in holding that the conjugal properties of spouses
Efren and Melecia can be levied and executed upon for the
satisfaction of Melecia’s civil liability in the murder case.
Ruling of the Court
To determine whether the obligation of the wife arising from
her criminal liability is chargeable against the properties of
the marriage, the Court has first to identify the spouses’
property relations.
Efren claims that his marriage with Melecia falls under the
regime of conjugal partnership of gains, given that they were
married prior to the enactment of the Family Code and that
they did not execute any prenuptial agreement.14Although
the heirs of the deceased victims do not dispute that it was
the Civil Code, not the Family Code, which governed the
marriage, they insist that it was the system of absolute
community of property that applied to Efren and Melecia. The
reasoning goes:
Admittedly, the spouses were married before the effectivity
of the Family Code. But that fact does not prevent the
application of [A]rt. 94, last paragraph, of the Family Code
because their property regime is precisely governed by the
law on absolute community. This finds support in Art. 256 of
the Family Code which states:
"This code shall have retroactive effect in so far as it does
not prejudice or impair vested or acquired rights in
accordance with the Civil Code or other laws."
None of the spouses is dead. Therefore, no vested rights
have been acquired by each over the properties of the
community. Hence, the liabilities imposed on the accused-
spouse may properly be charged against the community as
heretofore discussed.15
The RTC applied the same reasoning as above.16 Efren and
Melecia’s property relation was admittedly conjugal under
the Civil Code but, since the transitory provision of the
Family Code gave its provisions retroactive effect if no vested
or acquired rights are impaired, that property relation
between the couple was changed when the Family Code took
effect in 1988. The latter code now prescribes in Article 75
absolute community of property for all marriages unless the
parties entered into a prenuptial agreement. As it happens,
Efren and Melecia had no prenuptial agreement. The CA
agreed with this position.17
Both the RTC and the CA are in error on this point. While it is
true that the personal stakes of each spouse in their conjugal
assets are inchoate or unclear prior to the liquidation of the
conjugal partnership of gains and, therefore, none of them
can be said to have acquired vested rights in specific assets,
it is evident that Article 256 of the Family Code does not
intend to reach back and automatically convert into absolute
community of property relation all conjugal partnerships of
gains that existed before 1988 excepting only those with
prenuptial agreements.
The Family Code itself provides in Article 76 that marriage
settlements cannot be modified except prior to marriage.
Art. 76. In order that any modification in the marriage
settlements may be valid, it must be made before the
celebration of the marriage, subject to the provisions of
Articles 66, 67, 128, 135 and 136.
Clearly, therefore, the conjugal partnership of gains that
governed the marriage between Efren and Melecia who were
married prior to 1988 cannot be modified except before the
celebration of that marriage.
Post-marriage modification of such settlements can take
place only where: (a) the absolute community or conjugal
partnership was dissolved and liquidated upon a decree of
legal separation;18 (b) the spouses who were legally
separated reconciled and agreed to revive their former
property regime;19 (c) judicial separation of property had
been had on the ground that a spouse abandons the other
without just cause or fails to comply with his obligations to
the family;20 (d) there was judicial separation of property
under Article 135; (e) the spouses jointly filed a petition for
the voluntary dissolution of their absolute community or
conjugal partnership of gains.21 None of these circumstances
exists in the case of Efren and Melecia.
What is more, under the conjugal partnership of gains
established by Article 142 of the Civil Code, the husband and
the wife place only the fruits of their separate property and
incomes from their work or industry in the common fund.
Thus:
Art. 142. By means of the conjugal partnership of gains the
husband and wife place in a common fund the fruits of their
separate property and the income from their work or
industry, and divide equally, upon the dissolution of the
marriage or of the partnership, the net gains or benefits
obtained indiscriminately by either spouse during the
marriage.
This means that they continue under such property regime to
enjoy rights of ownership over their separate properties.
Consequently, to automatically change the marriage
settlements of couples who got married under the Civil Code
into absolute community of property in 1988 when the
Family Code took effect would be to impair their acquired or
vested rights to such separate properties.
The RTC cannot take advantage of the spouses’ loose
admission that absolute community of property governed
their property relation since the record shows that they had
been insistent that their property regime is one of conjugal
partnership of gains.22 No evidence of a prenuptial agreement
between them has been presented.
What is clear is that Efren and Melecia were married when
the Civil Code was still the operative law on marriages. The
presumption, absent any evidence to the contrary, is that
they were married under the regime of the conjugal
partnership of gains. Article 119 of the Civil Code thus
provides:
Art. 119. The future spouses may in the marriage
settlements agree upon absolute or relative community of
property, or upon complete separation of property, or upon
any other regime. In the absence of marriage settlements, or
when the same are void, the system of relative community
or conjugal partnership of gains as established in this Code,
shall govern the property relations between husband and
wife.
Of course, the Family Code contains terms governing
conjugal partnership of gains that supersede the terms of the
conjugal partnership of gains under the Civil Code. Article
105 of the Family Code states:
"x x x x
The provisions of this Chapter [on the Conjugal Partnership
of Gains] shall also apply to conjugal partnerships of gains
already established between spouses before the effectivity of
this Code, without prejudice to vested rights already
acquired in accordance with the Civil Code or other laws, as
provided in Article 256."23
Consequently, the Court must refer to the Family Code
provisions in deciding whether or not the conjugal properties
of Efren and Melecia may be held to answer for the civil
liabilities imposed on Melecia in the murder case. Its Article
122 provides:
Art. 122. The payment of personal debts contracted by the
husband or the wife before or during the marriage shall not
be charged to the conjugal properties partnership except
insofar as they redounded to the benefit of the family.
Neither shall the fines and pecuniary indemnities imposed
upon them be charged to the partnership.
However, the payment of personal debts contracted by either
spouse before the marriage, that of fines and indemnities
imposed upon them, as well as the support of illegitimate
children of either spouse, may be enforced against the
partnership assets after the responsibilities enumerated in
the preceding Article have been covered, if the spouse who is
bound should have no exclusive property or if it should be
insufficient; but at the time of the liquidation of the
partnership, such spouse shall be charged for what has been
paid for the purpose above-mentioned.
Since Efren does not dispute the RTC’s finding that Melecia
has no exclusive property of her own,24 the above applies.
The civil indemnity that the decision in the murder case
imposed on her may be enforced against their conjugal
assets after the responsibilities enumerated in Article 121 of
the Family Code have been covered.25 Those responsibilities
are as follows:
Art. 121. The conjugal partnership shall be liable for:
(1) The support of the spouse, their common children,
and the legitimate children of either spouse; however,
the support of illegitimate children shall be governed
by the provisions of this Code on Support;
(2) All debts and obligations contracted during the
marriage by the designated administrator-spouse for
the benefit of the conjugal partnership of gains, or by
both spouses or by one of them with the consent of
the other;
(3) Debts and obligations contracted by either spouse
without the consent of the other to the extent that the
family may have benefited;
(4) All taxes, liens, charges, and expenses, including
major or minor repairs upon the conjugal partnership
property;
(5) All taxes and expenses for mere preservation
made during the marriage upon the separate property
of either spouse;
(6) Expenses to enable either spouse to commence or
complete a professional, vocational, or other activity
for self-improvement;
 (7) Antenuptial debts of either spouse insofar as they imposed by final judgment on the latter accused in Criminal
have redounded to the benefit of the family; Cases 4232 and 4233, the responsibilities enumerated in
Article 121 of the Family Code have been covered.
(8) The value of what is donated or promised by both
spouses in favor of their common legitimate children SO ORDERED.
for the exclusive purpose of commencing or
completing a professional or vocational course or other
activity for self-improvement; and

(9) Expenses of litigation between the spouses unless

the suit is found to be groundless.

If the conjugal partnership is insufficient to cover the

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

Contrary to Efren’s contention, Article 121 above allows

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

WHEREFORE, the
Court AFFIRMS with MODIFICATION the Resolutions of
the Court of Appeals in CA-G.R. SP 77198 dated January 29,
2004 and May 14, 2004. The Regional Trial Court of Surigao
City, Branch 30, shall first ascertain that, in enforcing the
writ of execution on the conjugal properties of spouses Efren
and Melecia Pana for the satisfaction of the indemnities
G.R. No. L-61464 May 28, 1988
BA FINANCE CORPORATION, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, AUGUSTO YULO,
LILY YULO (doing business under the name and style
of A & L INDUSTRIES), respondents.
GUTIERREZ, JR., J.:
This is a petition for review seeking to set aside the decision
of the Court of Appeals which affirmed the decision of the
then Court of First Instance of Manila, dismissing the
complaint instituted by the petitioner and ordering it to pay
damages on the basis of the private respondent's
counterclaim.
On July 1, 1975, private respondent Augusto Yulo secured a
loan from the petitioner in the amount of P591,003.59 as
evidenced by a promissory note he signed in his own behalf
and as representative of the A & L Industries. Respondent
Yulo presented an alleged special power of attorney executed
by his wife, respondent Lily Yulo, who manages A & L
Industries and under whose name the said business is
registered, purportedly authorizing Augusto Yulo to procure
the loan and sign the promissory note. About two months
prior to the loan, however, Augusto Yulo had already left Lily
Yulo and their children and had abandoned their conjugal
home. When the obligation became due and demandable,
Augusto Yulo failed to pay the same.
On October 7, 1975, the petitioner filed its amended
complaint against the spouses Augusto and Lily Yulo on the
basis of the promissory note. It also prayed for the issuance
of a writ of attatchment alleging that the said spouses were
guilty of fraud in contracting the debt upon which the action
was brought and that the fraud consisted of the spouses'
inducing the petitioner to enter into a contract with them by
executing a Deed of Assignment in favor of the petitioner,
assigning all their rights, titles and interests over a
construction contract executed by and between the spouses
and A. Soriano Corporation on June 19, 1974 for a
consideration of P615,732.50 when, in truth, the spouses did
not have any intention of remitting the proceeds of the said
construction contract to the petitioner because despite the
provisions in the Deed of Assignment that the spouses shall,
without compensation or costs, collect and receive in trust
for the petitioner all payments made upon the construction
contract and shall remit to the petitioner all collections
therefrom, the said spouses failed and refuse to remit the
collections and instead, misappropriated the proceeds for
their own use and benefit, without the knowledge or consent
of the petitioner.
The trial court issued the writ of attachment prayed for
thereby enabling the petitioner to attach the properties of A
& L Industries. Apparently not contented with the order, the
petitioner filed another motion for the examination of
attachment debtor, alleging that the properties attached by
the sheriff were not sufficient to secure the satisfaction of
any judgment that may be recovered by it in the case. This
was likewise granted by the court.
Private respondent Lily Yulo filed her answer with
counterclaim, alleging that although Augusta Yulo and she
are husband and wife, the former had abandoned her and
their children five (5) months before the filing of the
complaint; that they were already separated when the
promissory note was executed; that her signature in the did not sign their signatures in his presence.
special power of attorney was forged because she had never The same were already signed by the supposed
authorized Augusto Yulo in any capacity to transact any parties and their supposed witnesses at the
business for and in behalf of A & L Industries, which is owned time they were brought to him for ratification.
by her as a single proprietor, that she never got a single We quote from the records the pertinent
centavo from the proceeds of the loan mentioned in the testimony of Atty. Ordoña, thus:
promissory note; and that as a result of the illegal
attachment of her properties, which constituted the assets of Q. This document marked as
the A & L Industries, the latter closed its business and was Exhibit B-1, when this was
taken over by the new owner. presented to you by that common
friend, June Enriquez, it was
After hearing, the trial court rendered judgment dismissing already typewritten, it was already
the petitioner's complaint against the private respondent Lily accomplished, all typewritten.?
Yulo and A & L Industries and ordering the petitioner to pay
the respondent Lily Yulo P660,000.00 as actual damages; A. Yes, sir.
P500,000.00 as unrealized profits; P300,000.00 as
exemplary damages; P30,000.00 as and for attorney's fees; Q And the parties had already
and to pay the costs. affixed their signatures in this
document?
The petitioner appealed. The Court of Appeals affirmed the
trial court's decision except for the exemplary damages A. Yes, sir.
which it reduced from P300,000.00 to P150,000.00 and the
attorney's fees which were reduced from P30,000.00 to Q. In this document marked as
P20,000.00. Exhibit B although it appears here
that this is an acknowledgment,
In resolving the question of whether or not the trial court you have not stated here that the
erred in holding that the signature of respondent Lily Yulo in principal actually acknowledged
the special power of attorney was forged, the Court of this document to be her voluntary
Appeals said: act and deed?

The crucial issue to be determined is whether or
not the signatures of the appellee Lily Yulo in
Exhibits B and B-1 are forged. Atty. Crispin
Ordoña, the Notary Public, admitted in open
court that the parties in the subject documents
A This in one of those things that
escaped my attention. Actually I
have not gone over the second
page. I believed it was in order I
 signed it. (TSN pp. 13-14, Hearing
of Nov. 26, 1976).
The glaring admission by the Notary Public that
he failed to state in the acknowledgment portion
of Exhibit B-1 that the appellee Lily Yulo
acknowledged the said document to be her own
voluntary act and deed, is a very strong and
commanding circumstance to show that she did
not appear personally before the said Notary
Public and did not sign the document.
Additionally, the Notary Public admitted that,
while June Enriquez is admittedly a mutual
friend of his and the defendant Augusta Yulo,
and who is also an instrumental witness in said
Exhibit B-1., he could not recognize or tell which
of the two signatures appearing therein, was
the signature of this June Enriquez.
Furthermore, as the issue is one of credibility of
a witness, the findings and conclusions of the
trial court before whom said witness, Atty.
Crispin Ordoña, the Notary Public before whom
the questioned document was supposedly
ratified and acknowledged, deserve great
respect and are seldom disturbed on appeal by
appellate tribunals, since it is in the best and
peculiar advantage of determining and
observing the conduct, demeanor and
deportment of a particular witness while he is
testifying in court, an opportunity not enjoyed
by the appellate courts who merely have to rely
on the recorded proceedings which transpired in
the court below, and the records are bare of any
circumstance of weight, which the trial court
had overlooked and which if duly considered,
may radically affect the outcome of the case.
On the other hand, the appellee Lily Yulo, to
back up her claim of forgery of her signature in
Exhibit B-1, presented in court a handwriting
expert witness in the person of Police Captain
Yakal Giron of the Integrated National Police
Training Command, and who is also a Document
Examiner of the same Command's Crime
Laboratory at Fort Bonifacio, Metro Manila. His
experience as an examiner of questioned and
disputed documents, in our mind, is quite
impressive. To qualify him as a handwriting
expert, he declared that he underwent
extensive and actual studies and examination of
disputed or questioned document, both at the
National Bureau of Investigation Academy and
National Bureau of Investigation Questioned
Document Laboratory, respectively, from July
1964, up to his appointment as Document
Examiner in June, 1975, and, to further his
experience along this line, he attended the
297th Annual Conference of the American
Society of Questioned Docurnent Examiners
held at Seattle, Washington, in August 1971, as
a representative of the Philippines, and likewise
conducted an observation of the present and
modern trends of crime laboratories in the West
Coast, U.S.A., in 1971; that he likewise had
conducted actual tests and examination of
about 100,000 documents, as requested by the
different courts, administrative, and
governmental agencies of the Government,
substantial portions of which relate to actual
court cases.
In concluding that the signatures of the appellee
Lily Yulo, in the disputed document in question
(Exh. B-1), were all forgeries, and not her
genuine signature, the expert witness
categorically recited and specified in open court
what he observed to be about twelve (12)
glaring and material significant differences, in
his comparison of the signatures appearing in
the genuine specimen signatures of the said
appellee and with those appearing in the
questioned document (Exhibit B-1). Indeed, we
have likewise seen the supposed notable
differences, found in the standard or genuine
signatures of the appellee which were lifted and
obtained in the official files of the government,
such as the Bureau of Internal Revenue on her
income tax returns, as compared to the
pretended signature of the appellee appearing
in Exhibits B, B-1. It is also noteworthy to
mention that the appellant did not even bother
to conduct a cross-examination of the
handwriting expert witness, Capt. Giron, neither
did the appellant present another handwriting
expert, at least to counter-act or balance the
appellee's handwriting expert.
Prescinding from the foregoing facts, we
subscribe fully to the lower court's observations
that the signatures of the appellee Lily Yulo in
the questioned document (Exh. B-1) were
forged. Hence, we find no factual basis to
disagree. (pp. 28-30, Rollo)
As to the petitioner's contention that even if the signature of
Lily Yulo was forged or even if the attached properties were
her exclusive property, the same can be made answerable to
the obligation because the said properties form part of the
conjugal partnership of the spouses Yulo, the appellate court
held that these contentions are without merit because there
is strong preponderant evidence to show that A & L
Industries belongs exclusively to respondent Lily Yulo,
namely: a) The Certificate of Registration of A & L Industries,
issued by the Bureau of Commerce, showing that said
business is a single proprietorship, and that the registered
owner thereof is only Lily Yulo; b) The Mayor's Permit issued
in favor of A & L Industries, by the Caloocan City Mayor's
Office showing compliance by said single proprietorship
company with the City Ordinance governing business
establishments; and c) The Special Power of Attorney itself,
assuming but without admitting its due execution, is tangible
proof that Augusto Yulo has no interest whatsoever in the A
& L Industries, otherwise, there would have been no
necessity for the Special Power of Attorney if he is a part
owner of said single proprietorship.
With regard to the award of damages, the Court of Appeals
affirmed the findings of the trial court that there was bad
faith on the part of the petitioner as to entitle the private
respondent to damages as shown not only by the fact that
the petitioner did not present the Deed of Assignment or the
construction agreement or any evidence whatsoever to
support its claim of fraud on the part of the private
respondent and to justify the issuance of a preliminary
attachment, but also by the following findings:
Concerning the actual damages, the appellate court ruled
that the petitioner should have presented evidence to
disprove or rebut the private respondent's claim but it
remained quiet and chose not to disturb the testimony and
the evidence presented by the private respondent to prove
her claim.
In this petition for certiorari, the petitioner raises three
issues. The first issue deals with the appellate court's
affirmance of the trial court's findings that the signature of
the private respondent on the Special Power of Attorney was
forged. According to the petitioner, the Court of Appeals
disregarded the direct mandate of Section 23, Rule 132 of
the Rules of Court which states in part that evidence of
handwriting by comparison may be made "with writings
admitted or treated as genuine by the party against whom
the evidence is offered, or proved to be genuine to the
satisfaction of the judge," and that there is no evidence on
record which proves or tends to prove the genuineness of the
standards used.
There is no merit in this contention.
The records show that the signatures which were used as
"standards" for comparison with the alleged signature of the
private respondent in the Special Power of Attorney were
those from the latter's residence certificates in the years
1973, 1974 and 1975, her income tax returns for the years
1973 and 1975 and from a document on long bond paper
dated May 18, 1977. Not only were the signatures in the
foregoing documents admitted by the private respondent as
hers but most of the said documents were used by the
private respondent in her transactions with the government.
As was held in the case of Plymouth Saving & Loan Assn. No.
2 v. Kassing (125 NE 488, 494):
We believe the true rule deduced from the
authorities to be that the genuineness of a
"standard" writing may be established (1) by
the admission of the person sought to be
charged with the disputed writing made at or for
the purposes of the trial or by his testimony;
(2) by witnesses who saw the standards written
or to whom or in whose hearing the person
sought to be charged acknowledged the writing
thereof; (3) by evidence showing that the
reputed writer of the standard has acquiesced in
or recognized the same, or that it has been
adopted and acted upon by him his business
transactions or other concerns....
Furthermore, the judge found such signatures to be sufficient
as standards. In the case of Taylor-Wharton Iron & Steel Co.
v. Earnshaw (156 N.E. 855, 856), it was held:
When a writing is offered as a standard of
comparison it is for the presiding judge to
decide whether it is the handwriting of the party
to be charged. Unless his finding is founded
upon error of law, or upon evidence which is, as
matter of law, insufficient to justify the finding,
this court will not revise it upon exceptions."
(Costelo v. Crowell, 139 Mass. 588, 590, 2 N.E.
648; Nuñez v. Perry, 113 Mass, 274, 276.)
We cannot find any error on the part of the trial judge in
using the above documents as standards and also in giving
credence to the expert witness presented by the private
respondent whose testimony the petitioner failed to rebut
and whose credibility it likewise failed to impeach. But more
important is the fact that the unrebutted handwriting
expert's testimony noted twelve (12) glaring and material
differences in the alleged signature of the private respondent
in the Special Power of Attorney as compared with the
specimen signatures, something which the appellate court
also took into account. In Cesar v. Sandiganbayan (134
SCRA 105, 132), we ruled:
Mr. Maniwang pointed to other significant
divergences and distinctive characteristics
between the sample signatures and the
signatures on the questioned checks in his
report which the court's Presiding Justice kept
mentioning during Maniwang's testimony.
In the course of his cross-examination, NBI
expert Tabayoyong admitted that he saw the
differences between the exemplars used and the
questioned signatures but he dismissed the
differences because he did not consider them
fundamental. We rule that significant
differences are more fundamental than a few
similarities. A forger always strives to master
some similarities.
The second issue raised by the petitioner is that while it is
true that A & L Industries is a single proprietorship and the
registered owner thereof is private respondent Lily Yulo, the
said proprietorship was established during the marriage and
its assets were also acquired during the same. Therefore, it
is presumed that this property forms part of the conjugal
partnership of the spouses Augusto and Lily Yulo and thus,
could be held liable for the obligations contracted by Augusto
Yulo, as administrator of the partnership.
There is no dispute that A & L Industries was established
during the marriage of Augusta and Lily Yulo and therefore
the same is presumed conjugal and the fact that it was
registered in the name of only one of the spouses does not
destroy its conjugal nature (See Mendoza v. Reyes, 124
SCRA 161, 165). However, for the said property to be held
liable, the obligation contracted by the husband must have
redounded to the benefit of the conjugal partnership under
Article 161 of the Civil Code. In the present case, the
obligation which the petitioner is seeking to enforce against
the conjugal property managed by the private respondent
Lily Yulo was undoubtedly contracted by Augusto Yulo for his
own benefit because at the time he incurred the obligation
he had already abandoned his family and had left their
conjugal home. Worse, he made it appear that he was duly
authorized by his wife in behalf of A & L Industries, to
procure such loan from the petitioner. Clearly, to make A & L
Industries liable now for the said loan would be unjust and
contrary to the express provision of the Civil Code. As we
have ruled in Luzon Surety Co., Inc. v. De Gracia (30 SCRA
111, 115-117):
As explained in the decision now under review:
"It is true that the husband is the administrator
of the conjugal property pursuant to the
provisions of Art. 163 of the new Civil Code.
However, as such administrator the only
obligations incurred by the husband that are
chargeable against the conjugal property are
those incurred in the legitimate pursuit of his
career, profession or business with the honest
belief that he is doing right for the benefit of the
family. This is not true in the case at bar for we
believe that the husband in acting as guarantor
or surety for another in an indemnity agreement
as that involved in this case did not act for the
benefit of the conjugal partnership. Such
inference is more emphatic in this case, when
 no proof is presented that Vicente Garcia in
acting as surety or guarantor received
consideration therefore, which may redound to
the benefit of the conjugal partnership.(Ibid, pp.
46-47).
xxx xxx xxx
xxx xxx xxx
In the most categorical language, a conjugal
partnership under that provision is liable only
for such "debts and obligations contracted by
the husband for the benefit of the conjugal
partnership." There must be the requisite
showing then of some advantage which clearly
accrued to the welfare of the spouses. There is
none in this case.
xxx xxx xxx
Moreover, it would negate the plain object of
the additional requirement in the present Civil
Code that a debt contracted by the husband to
bind a conjugal partnership must redound to its
benefit. That is still another provision indicative
of the solicitude and tender regard that the law
manifests for the family as a unit. Its interest is
paramount; its welfare uppermost in the minds
of the codifiers and legislators.
We, therefore, rule that the petitioner cannot enforce the
obligation contracted by Augusto Yulo against his conjugal
properties with respondent Lily Yulo. Thus, it follows that the
writ of attachment cannot issue against the said properties.
Finally, the third issue assails the award of actual damages
according to the petitioner, both the lower court and the
appellate court overlooked the fact that the properties
referred to are still subject to a levy on attachment. They
are, therefore, still under custodia legis and thus, the
assailed decision should have included a declaration as to
who is entitled to the attached properties and that assuming
arguendo that the attachment was erroneous, the lower
court should have ordered the sheriff to return to the private
respondent the attached properties instead of condemning
the petitioner to pay the value thereof by way of actual
damages.
In the case of Lazatin v. Twaño (2 SCRA 842, 847), we
ruled:
xxx xxx xxx
... It should be observed that Sec. 4 of Rule 59,
does not prescribed the remedies available to
the attachment defendant in case of a wrongful
attachment, but merely provides an action for
recovery upon the bond, based on the
undertaking therein made and not upon the
liability arising from a tortuous act, like the
malicious suing out of an attachment. Under the
first, where malice is not essential, the
attachment defendant, is entitled to recover
only the actual damages sustained by him by
reason of the attachment. Under the second,
where the attachment is maliciously sued out,
the damages recoverable may include a
compensation for every injury to his credit,
business or feed (Tyler v. Mahoney, 168 NC
 237, 84 SE 362; Pittsburg etc. 5 Wakefield, etc.,
135 NC 73, 47 SE 234). ...
The question before us, therefore, is whether the attachment
of the properties of A & L Industries was wrongful so as to
entitle the petitioner to actual damages only or whether the
said attachment was made in bad faith and with malice to
warrant the award of other kinds of damages. Moreover, if
the private respondent is entitled only to actual damages,
was the court justified in ordering the petitioner to pay for
the value of the attached properties instead of ordering the
return of the said properties to the private respondent Yulo ?
Both the trial and appellate courts found that there was bad
faith on the part of the petitioner in securing the writ of
attachment. We do not think so. "An attachment may be said
to be wrongful when, for instance, the plaintiff has no cause
of action, or that there is no true ground therefore, or that
the plaintiff has a sufficient security other than the property
attached, which is tantamout to saying that the plaintiff is
not entitled to attachment because the requirements of
entitling him to the writ are wanting. (7 C.J.S., 664)" (p. 48,
Section 4, Rule 57, Francisco, Revised Rules of Court).
Although the petitioner failed to prove the ground relied
upon for the issuance of the writ of attachment, this failure
cannot be equated with bad faith or malicious intent. The
steps which were taken by the petitioner to ensure the
security of its claim were premised, on the firm belief that
the properties involved could be made answerable for the
unpaid obligation due it. There is no question that a loan in
the amount of P591,003.59 was borrowed from the bank.
We, thus, find that the petitioner is liable only for actual
damages and not for exemplary damages and attorney's
fees. Respondent Lily Yulo has manifested before this Court
that she no longer desires the return of the attached
properties since the said attachment caused her to close
down the business. From that time she has become a mere
employee of the new owner of the premises. She has grave
doubts as to the running condition of the attached
machineries and equipments considering that the attachment
was effected way back in 1975. She states as a matter of
fact that the petitioner has already caused the sale of the
machineries for fear that they might be destroyed due to
prolonged litigation. We, therefore, deem it just and
equitable to allow private respondent Lily Yulo to recover
actual damages based on the value of the attached
properties as proven in the trial court, in the amount of
P660,000.00. In turn, if there are any remaining attached
properties, they should be permanently released to herein
petitioner.
We cannot, however, sustain the award of P500,000.00
representing unrealized profits because this amount was not
proved or justified before the trial court. The basis of the
alleged unearned profits is too speculative and conjectural to
show actual damages for a future period. The private
respondent failed to present reports on the average actual
profits earned by her business and other evidence of
profitability which are necessary to prove her claim for the
said amount (See G. A. Machineries, Inc. v. Yaptinchay, 126
SCRA 78, 88).
The judgment is therefore set aside insofar as it holds the
petitioner liable for P500,000.00 actual damages
representing unrealized profits, P150,000.00 for exemplary
damages and P20,000.00 for attorney's fees. As stated
earlier, the attached properties, should be released in favor
of the petitioner.
WHEREFORE, the decision of the Court of Appeals is hereby
SET ASIDE and the petitioner is ordered to pay the private
respondent Lily Yulo the amount of SIX HUNDRED SIXTY
THOUSAND PESOS (P660,000.00) as actual damages. The
remaining properties subject of the attachment are ordered
released in favor of the petitioner.

SO ORDERED.
G.R. No. 118784 September 2, 1999
HEIRS OF CHRISTINA AYUSTE, petitioner,
vs.
COURT OF APPEALS and VIENA
MALABONGA, respondents.
GONZAGA-REYES, J.:
Before us is a petition for certiorari under Rule 45, asking
this Court to review the decision of the Court of Appeals
dated January 23, 1995 in CA-G.R. CV No. 38232, 1 which
overturned the decision of the Regional Trial Court of Lucena
City in Civil Case No. 90-33.
At the outset, we note that Christina Ayuste, the plaintiff in
the lower court and the original petitioner herein, died on
November 21, 1995. 2 In his Comment dated January 14,
1998 to private respondent's Manifestation informing the
Court of Christina Ayuste's death, petitioner's counsel re-
affirmed such fact of death and informed the Court of the
names of Christina Ayuste's legal representatives. 3 The
claim not having been extinguished by the death of Christina
Ayuste, we ordered the substitution of her heirs Marlon
Ayuste and Arlaine Ayuste-Yu for Christina Ayuste in our
Resolution dated August 11, 1999.
Christina Ayuste married Rafael Ayuste on September 24,
1961. Although the couple resided in Manila, they operated a
machine shop in Barangay Iyam, Lucena City, which was
managed by Rafael Ayuste. In order to serve as a temporary
residence for Rafael Ayuste while in Lucena, the couple
purchased on August 26, 1982 a parcel of land with an area
of 180 square meters on which a residential house was built
situated at Yale Street, University Village, Barrio Ibabang
Dupay, Lucena City from spouses Pedro and Aida David. A
deed of sale 4 was executed and signed by the parties and
filed with the Register of Deeds of Lucena City. On October
23, 1983, the Register of Deeds of Lucena City issued
Transfer Certificate of Title No. T-42972 in the name of
"RAFAEL T. AYUSTE, married to Christina Ayuste. 5
On February 27, 1987, a deed of absolute sale 6 was
executed by Rafael Ayuste in favor of private respondent
whereby the former sold the abovementioned parcel of land
to the latter for P40,000, which amount Rafael Ayuste
acknowledged having received in the deed. On page 2 of this
deed appears the signature of Christina Ayuste below the
phrase "With my conformity." The deed of sale was
registered with the Register of Deeds of Lucena City on
March 5, 1987 and Transfer Certificate of Title No. T-50046
was issued in the name of private respondent. 7
After Rafael Ayuste's death on October 13, 1989, Christina
Ayuste discovered, in the course of an inventory of their
properties, that the title to the land in Lucena was missing.
She searched for it in the office of her husband in Lucena
City and it was then that she learned from her employees
about the sale of the house and lot by her husband to private
respondent.
On March 2, 1990, Christina Ayuste filed a complaint with
the Regional Trial Court of Lucena City for the annulment of
the sale, cancellation of the title issued in the name of
private respondent and for the payment of moral, exemplary
and actual damages. In her complaint Christina Ayuste
alleges that her signature on the deed of sale was forged and
that her husband Rafael Ayuste sold the property without her
knowledge and consent.
The Regional Trial Court rendered its Decision on June 20,
1991, the dispositive portion of which provides as follows —
WHEREFORE, judgment is hereby rendered as
follows:
(1) Declaring null and void the
Deed of Absolute Sale of House
and Lot (Exhibit "C') executed by
defendant and plaintiffs husband,
the deceased Rafael Ayuste, on
February 27, 1987;
(2) Ordering defendant Viena
Malabonga to return to plaintiff
Christina Ayuste the possession of
the house and lot covered by
Transfer Certificate of Title No. T-
50045, now in the name of
defendant Viena Malabonga,
together with the improvements
thereon;
(3) Directing the Register of Deeds
of Lucena City to cancel Transfer
Certificate of Title No. T-50046 and
to issue in the name of plaintiff and
her children by the late Rafael
Ayuste new Transfer Certificate of
Title in lieu thereof, subject to
all/any liens and encumbrances
annotated on the memorandum of
the title to be cancelled;
(4) Ordering plaintiff Christina
Ayuste to pay the defendant
Vienna Malabonga the sum of
P258,200.00 for the improvements
introduced on the lot and house as
well as for maintenance of the
premises; and
(5) Ordering defendant to pay
plaintiff the amount of rents
received from the premises
starting March, 1990 until such
time that she finally turns-over
(sic) the possession of the house
and lot to plaintiff, at the rate of
P2,700.00 per month.
With costs against defendant. 8
Both parties appealed the trial court's decision. On January
23, 1995, the Court of Appeals reversed the trial court's
ruling by holding that Christina Ayuste's right to bring an
action for the annulment of the sale is barred by laches
because of her failure to file it during the existence of the
marriage in accordance with article 173 of the Civil Code.
Also, it found private respondent to be entitled to the
protection of a buyer in good faith and for value. The
pertinent portion of the public respondent's decision provides
—
Record shows that plaintiff-appellant wife (sic)
instituted on March 2, 1990 her action for
annulment of the sale executed by her husband
on February 27, 1987 — long after said vendor-
husband died in 1989. It is thus clear that the
action for annulment of the sale was not
instituted "during the marriage" as required by
Article 173, the very provision of law which
grants the wife the privilege/right to have the
sale executed by her husband annulled, in
derogation of the suppose (sic) vested right of
the buyer. The two periods provided for in said
Article 173 — "during the marriage" and "within
10 years" should concur.
We find no merit in plaintiff-appellant's claim
that she discovered the sale, only after her
husband's death, when she made an inventory
and found out that the pertinent titles to the
land subject of the sale were missing. It is
settled in this jurisdiction that registration with
the Register of Deeds is notice to the whole
world. The questioned deed of sale has long
been registered with the Register of Deeds of
Lucena City — on March 5, 1987 — and in fact
the said property was registered in the name of
defendant-appellant under Transfer Certificate
of Title No. T-50046. Said TCT in the name of
defendant-appellant is now indefeasible.
The peculiar circumstances that militates in
favor of defendant-appellant buyer are as
follows: The questioned deed of sale was not
actually without the wife's signature signifying
marital consent, so to speak. Evidently,
defendant-appellant was led to believe by the
husband-vendor that plaintiff-appellant gave her
marital consent to the sale, as said husband
presented a deed of sale supposedly pre-signed
by his wife, plaintiff-appellant. Defendant-
appellant is therefore undoubtedly a buyer in
good faith and for value, with vested rights
equally entitled to the protection of the law. The
questioned deed of sale was duly registered in
the name of defendant-appellant who was
issued a Transfer Certificate of Title.
xxx xxx xxx
Unlike the statute of limitations, laches is not a
mere question of time but is principally a
question of the inequity on unfairness of
permitting a stale right to be enforced or
asserted. (Marcelino vs. CA, 210 SCRA 444).
For failure of the plaintiff-appellant wife to
institute her action for annulment of sale, while
her husband-vendor was still alive as required
by Article 173 of the New Civil Code, plaintiff-
appellant wife's right under Article 166 of the
same Code has become stale and is now barred
by laches.
In view of the foregoing findings, We rule that
the trial court erred in giving due course to the
action for annulment of sale. With the foregoing
findings and resolution the other issues raised in
this appeal are now moot and academic.
WHEREFORE, in view of all the foregoing,
judgment is hereby rendered giving due course
to the appeal of defendant-appellant, —and—
dismissing the appeal of plaintiff-appellant.
 The decision dated June 20, 1991 rendered by
the Regional Trial Court is REVERSED and SET
ASIDE.
The Deed of Absolute Sale executed on
February 27, 1987 by and between defendant-
appellant and plaintiff-appellant's husband is
declared VALID and BINDING upon the plaintiff-
appellant. 9
Both the trial and appellate court decisions have established
that Rafael Ayuste sold conjugal property without the
consent of Christina Ayuste, his wife. This factual finding
shall not be disturbed because only questions of law are
reviewed in an appeal under Rule 45 of the Rules of Court
subject to certain well-defined exceptions none of which are
present in the instant case. The only issue which remains to
be resolved is whether petitioners are entitled to the
annulment of the contract of sale entered into by Rafael
Ayuste without the consent of Christina Ayuste.
Petitioners claim that since the law expressly prohibits the
husband from alienating real property belonging to the
conjugal partnership without his wife's consent, the contract
of sale in question is a nullity pursuant to article 1409 of the
Civil Code which provides that contracts expressly prohibited
by law are inexistent and void from the beginning. It is
further averred by petitioners that the present action is not
barred because the action to declare the nullity of a contract
does not prescribe. Furthermore, Christina Ayuste cannot be
faulted for having brought the action only after the death of
her husband, despite the periods stated in article 173 of the
Civil Code, since she had no knowledge of the sale during his
lifetime as he concealed the same from her. Finally, it is
contended that article 166 is the relevant provision, not
article 173. 10
Under the Civil Code, although the husband is the
administrator of the conjugal partnership, 11 he cannot
alienate or encumber any real property of the conjugal
partnership without his wife's consent, 12 subject only to
certain exceptions specified in the law. 13 The remedy
available to the wife in case her husband should dispose of
their conjugal property without her consent is laid down in
Article 173 of the Civil Code which states that —
The wife may, during the marriage,
and within ten years from the
transaction questioned, ask the
courts for the annulment of any
contract of the husband entered
into without her consent, when
such consent is required, or any
act or contract of the husband
which tends to defraud her or
impair her interest in the conjugal
partnership property. Should the
wife fail to exercise this right, she
or her heirs, after the dissolution of
the marriage, may demand the
value of property fraudulently
alienated by the husband.
(emphasis supplied)
There is no ambiguity in the wording of the law. A sale of
real property of the conjugal partnership made by the
husband without the consent of his wife is voidable. 14 The
action for annulment must be brought during the marriage
and within ten years from the questioned transaction by the
wife. 15 Where the law speaks in clear and categorical
language, there is no room for interpretation — there is room
only for application. 16

In the present case, the deed of sale was executed on

February 27, 1987. Rafael Ayuste died on October 13, 1989.
However, it was only on March 2, 1990 that Christina Ayuste
filed her complaint with the lower court asking for the
annulment of the sale. Although the action was filed within
ten years from the questioned transaction, it was not
brought during the existence of the marriage which was
dissolved upon the death of Rafael Ayuste in
1989. 17 Clearly, the action for annulment filed by Christina
Ayuste was barred for having been filed out of time.

The fact that Christina Ayuste only learned of the sale after
the death of her husband is not material. We affirm public
respondent's ruling that registration of the sale with the
Register of Deeds constitutes a notice to the whole
world. 18 Precisely, the purpose of the legislature in providing
a system of registration is to afford a means of publicity so
that persons dealing with real property may search the
records and thereby, acquire security against instruments
the execution of which have not been revealed to
them. 19 Since the deed of sale was registered on March 5,
1987, Christina Ayuste is presumed to have constructive
notice of the sale from such date.

WHEREFORE, the decision of the Court of Appeals is

AFFIRMED. No pronouncement as to costs.
HEIRS OF IGNACIA AGUILAR-REYES, Petitioners,
vs.
Spouses CIPRIANO MIJARES and FLORENTINA
MIJARES, Respondents.
DECISION
YNARES-SANTIAGO, J.:
Under the regime of the Civil Code, the alienation or
encumbrance of a conjugal real property requires the
consent of the wife. The absence of such consent renders the
entire transaction1 merely voidable and not void.2 The wife
may, during the marriage and within ten years from the
transaction questioned, bring an action for the annulment of
the contract entered into by her husband without her
consent.3
Assailed in this petition for review on certiorari are the
January 26, 2000 Decision4 and June 19, 2000,
Resolution5 of the Court of Appeals in CA-G.R. No. 28464
which declared respondents as purchasers in good faith and
set aside the May 31, 1990 and June 29, 1990 Orders of the
Regional Trial Court of Quezon City, Branch 101, in Civil Case
No. Q-48018.
The controversy stemmed from a dispute over Lot No. 4349-
B-2,6 approximately 396 square meters, previously covered
by Transfer Certificate of Title (TCT) No. 205445, located in
Balintawak, Quezon City and registered in the name of
Spouses Vicente Reyes and Ignacia Aguilar-Reyes.7 Said lot
and the apartments built thereon were part of the spouses’
conjugal properties having been purchased using conjugal
funds from their garments business.8
Vicente and Ignacia were married in 1960, but had been
separated de facto since 1974.9 Sometime in 1984, Ignacia
learned that on March 1, 1983, Vicente sold Lot No. 4349-B-
2 to respondent spouses Cipriano and Florentina Mijares for
P40,000.00.10 As a consequence thereof, TCT No. 205445
was cancelled and TCT No. 306087 was issued on April 19,
1983 in the name of respondent spouses.11 She likewise
found out that Vicente filed a petition for administration and
appointment of guardian with the Metropolitan Trial Court of
Quezon City, Branch XXI. Vicente misrepresented therein
that his wife, Ignacia, died on March 22, 1982, and that he
and their 5 minor children were her only heirs.12 On
September 29, 1983, the court appointed Vicente as the
guardian of their minor children.13 Subsequently, in its
Order dated October 14, 1983, the court authorized Vicente
to sell the estate of Ignacia.14
On August 9, 1984, Ignacia, through her counsel, sent a
letter to respondent spouses demanding the return of her ½
share in the lot. Failing to settle the matter amicably, Ignacia
filed on June 4, 1996 a complaint15 for annulment of sale
against respondent spouses. The complaint was thereafter
amended to include Vicente Reyes as one of the
defendants.16
In their answer, respondent spouses claimed that they are
purchasers in good faith and that the sale was valid because
it was duly approved by the court.17 Vicente Reyes, on the
other hand, contended that what he sold to the spouses was
only his share in Lot No. 4349-B-2, excluding the share of his
wife, and that he never represented that the latter was
already dead.18 He likewise testified that respondent
spouses, through the counsel they provided him, took
advantage of his illiteracy by filing a petition for the issuance
of letters of administration and appointment of guardian
without his knowledge.19
On February 15, 1990, the court a quo rendered a decision
declaring the sale of Lot No. 4349-B-2 void with respect to
the share of Ignacia. It held that the purchase price of the lot
was P110,000.00 and ordered Vicente to return ½ thereof or
P55,000.00 to respondent spouses. The dispositive portion of
the said decision, reads-
WHEREFORE, premises above considered, judgment is
hereby rendered declaring the subject Deed of Absolute Sale,
dated March [1,] 1983 signed by and between defendants
Vicente Reyes and defendant Cipriano Mijares NULL AND
VOID WITH RESPECT TO ONE-HALF (1/2) OF THE SAID
PROPERTY;
The Register of Deeds of Quezon City is hereby ordered to
cancel TCT No. 306083 (sic) in the names of defendant
spouses Cipriano Mijares and Florentina Mijares and to issue
a new TCT in the name of the plaintiff Ignacia Aguilar-Reyes
as owner in fee simple of one-half (1/2) of said property and
the other half in the names of defendant spouses Cipriano
Mijares and Florentin[a] Mijares, upon payment of the
required fees therefore;
Said defendant spouses Mijares are also ordered to allow
plaintiff the use and exercise of rights, as well as obligations,
pertinent to her one-half (1/2) ownership of the subject
property;
Defendant Vicente Reyes is hereby ordered to reimburse
P55,000.00 with legal rate of interest from the execution of
the subject Deed of Absolute Sale on March 1, 1983, to the
defendant spouses Cipriano Mijares and Florentina Mijares
which corresponds to the one-half (1/2) of the actual
purchase price by the said Mijares but is annulled in this
decision (sic);
Defendant Vicente Reyes is hereby further ordered to pay
plaintiff the amount of P50,000.00 by way of moral and
exemplary damages, plus costs of this suit.
SO ORDERED.20
Ignacia filed a motion for modification of the decision praying
that the sale be declared void in its entirety and that the
respondents be ordered to reimburse to her the rentals they
collected on the apartments built on Lot No. 4349-B-2
computed from March 1, 1983.1âwphi1
On May 31, 1990, the trial court modified its decision by
declaring the sale void in its entirety and ordering Vicente
Reyes to reimburse respondent spouses the purchase price
of P110,000, thus –
WHEREFORE, premises considered, judgment is hereby
rendered declaring the subject Deed of Absolute Sale, dated
March 1, 1983 signed by and between defendants Vicente
Reyes and defendant Cipriano Mijares as null and void ab
initio, in view of the absence of the wife’s conformity to said
transaction.
Consequent thereto, the Register of Deeds for Quezon City is
hereby ordered to cancel TCT No. 306083 (sic) in the name
of Cipriano Mijares and Florentin[a] Mijares and issue a new
TCT in the name of the plaintiff and defendant Ignacia
Aguilar-Reyes and Vicente Reyes as owners in fee simple,
upon payment of required fees therefore.
Defendant Vicente Reyes is hereby ordered to pay the
amount of one hundred ten thousand pesos (P110,000.00)
with legal rate of interest at 12% per annum from the
execution of the subject Deed of Absolute Sale on March 1,
1983.
Further, defendant Vicente Reyes is ordered to pay the
amount of P50,000.00 by way of moral and exemplary
damages, plus costs of this suit.
SO ORDERED.21
On motion22 of Ignacia, the court issued an Order dated
June 29, 1990 amending the dispositive portion of the May
31, 1990 decision by correcting the Transfer Certificate of
Title of Lot No. 4349-B-2, in the name of Cipriano Mijares
and Florentina Mijares, from TCT No. 306083 to TCT No.
306087; and directing the Register of Deeds of Quezon City
to issue a new title in the name of Ignacia Aguilar-Reyes and
Vicente Reyes. The Order likewise specified that Vicente
Reyes should pay Ignacia Aguilar-Reyes the amount of
P50,000.00 as moral and exemplary damages.23
Both Ignacia Aguilar-Reyes and respondent spouses
appealed the decision to the Court of Appeals.24 Pending the
appeal, Ignacia died and she was substituted by her
compulsory heirs.25
Petitioners contended that they are entitled to
reimbursement of the rentals collected on the apartment
built on Lot No. 4349-B-2, while respondent spouses claimed
that they are buyers in good faith. On January 26, 2000, the
Court of Appeals reversed and set aside the decision of the
trial court. It ruled that notwithstanding the absence of
Ignacia’s consent to the sale, the same must be held valid in
favor of respondents because they were innocent purchasers
for value.26 The decretal potion of the appellate court’s
decision states –
WHEREFORE, premises considered, the Decision appealed
from and the Orders dated May 31, 1990 and June 29, 1990,
are SET ASIDE and in lieu thereof a new one is rendered –
1. Declaring the Deed of Absolute Sale dated March 1, 1983
executed by Vicente Reyes in favor of spouses Cipriano and
[Florentina] Mijares valid and lawful;
2. Ordering Vicente Reyes to pay spouses Mijares the
amount of P30,000.00 as attorney’s fees and legal expenses;
and
3. Ordering Vicente Reyes to pay spouses Mijares
P50,000.00 as moral damages.
No pronouncement as to costs.
SO ORDERED.27
Undaunted by the denial of their motion for
reconsideration,28 petitioners filed the instant petition
contending that the assailed sale of Lot No. 4392-B-2 should
be annulled because respondent spouses were not
purchasers in good faith.
The issues for resolution are as follows: (1) What is the
status of the sale of Lot No. 4349-B-2 to respondent
spouses? (2) Assuming that the sale is annullable, should it
be annulled in its entirety or only with respect to the share of
Ignacia? (3) Are respondent spouses purchasers in good
faith?
Articles 166 and 173 of the Civil Code,29 the governing laws
at the time the assailed sale was contracted, provide:
Art.166. Unless the wife has been declared a non compos
mentis or a spendthrift, or is under civil interdiction or is
confined in a leprosarium, the husband cannot alienate or
encumber any real property of the conjugal partnership
without the wife’s consent. If she refuses unreasonably to
give her consent, the court may compel her to grant the
same…
Art. 173. The wife may, during the marriage and within ten
years from the transaction questioned, ask the courts for the
annulment of any contract of the husband entered into
without her consent, when such consent is required, or any
act or contract of the husband which tends to defraud her or
impair her interest in the conjugal partnership property.
Should the wife fail to exercise this right, she or her heirs
after the dissolution of the marriage, may demand the value
of property fraudulently alienated by the husband.
Pursuant to the foregoing provisions, the husband could not
alienate or encumber any conjugal real property without the
consent, express or implied, of the wife otherwise, the
contract is voidable. Indeed, in several cases30 the Court
had ruled that such alienation or encumbrance by the
husband is void. The better view, however, is to consider the
transaction as merely voidable and not void.31 This is
consistent with Article 173 of the Civil Code pursuant to
which the wife could, during the marriage and within 10
years from the questioned transaction, seek its
annulment.32
In the case of Heirs of Christina Ayuste v. Court of
Appeals,33 it was categorically held that –
There is no ambiguity in the wording of the law. A sale of
real property of the conjugal partnership made by the
husband without the consent of his wife is voidable. The
action for annulment must be brought during the marriage
and within ten years from the questioned transaction by the
wife. Where the law speaks in clear and categorical
language, there is no room for interpretation — there is room
only for application.34
Likewise, in Spouses Guiang v. Court of Appeals,35 the Court
quoted with approval the ruling of the trial court that under
the Civil Code, the encumbrance or alienation of a conjugal
real property by the husband absent the wife’s consent, is
voidable and not void. Thus –
…Under Article 166 of the Civil Code, the husband cannot
generally alienate or encumber any real property of the
conjugal partnership without the wife’s consent. The
alienation or encumbrance if so made however is not null
and void. It is merely voidable. The offended wife may bring
an action to annul the said alienation or encumbrance. Thus,
the provision of Article 173 of the Civil Code of the
Philippines, to wit:
Art. 173. The wife may, during the marriage and within ten
years from the transaction questioned, ask the courts for the
annulment of any contract of the husband entered into
without her consent, when such consent is required, or any
act or contract of the husband which tends to defraud her or
impair her interest in the conjugal partnership property.
Should the wife fail to exercise this right, she or her heirs
after the dissolution of the marriage, may demand the value
of property fraudulently alienated by the husband.
This particular provision giving the wife ten (10) years x x x
during [the] marriage to annul the alienation or
encumbrance was not carried over to the Family Code. It is
thus clear that any alienation or encumbrance made after
August 3, 1988 when the Family Code took effect by the
husband of the conjugal partnership property without the
consent of the wife is null and void…
In the case at bar, there is no dispute that Lot No. 4349-B-2,
is a conjugal property having been purchased using the
conjugal funds of the spouses during the subsistence of their
marriage. It is beyond cavil therefore that the sale of said lot
to respondent spouses without the knowledge and consent of
Ignacia is voidable. Her action to annul the March 1, 1983
sale which was filed on June 4, 1986, before her demise is
perfectly within the 10 year prescriptive period under Article
173 of the Civil Code. Even if we reckon the period from
November 25, 1978 which was the date when Vicente and
the respondent spouses entered into a contract concerning
Lot No. 4349-B-2, Ignacia’s action would still be within the
prescribed period.
Anent the second issue, the trial court correctly annulled the
voidable sale of Lot No. 4349-B-2 in its entirety. In Bucoy v.
Paulino,36 a case involving the annulment of sale with
assumption of mortgages executed by the husband without
the consent of the wife, it was held that the alienation or
encumbrance must be annulled in its entirety and not only
insofar as the share of the wife in the conjugal property is
concerned. Although the transaction in the said case was
declared void and not merely voidable, the rationale for the
annulment of the whole transaction is the same thus –
The plain meaning attached to the plain language of the law
is that the contract, in its entirety, executed by the husband
without the wife's consent, may be annulled by the wife. Had
Congress intended to limit such annulment in so far as the
contract shall "prejudice" the wife, such limitation should
have been spelled out in the statute. It is not the legitimate
concern of this Court to recast the law. As Mr. Justice Jose B.
L. Reyes of this Court and Judge Ricardo C. Puno of the Court
of First Instance correctly stated, "[t]he rule (in the first
sentence of Article 173) revokes Baello vs. Villanueva, 54
Phil. 213 and Coque vs. Navas Sioca, 45 Phil. 430," in which
cases annulment was held to refer only to the extent of the
one-half interest of the wife…
The necessity to strike down the contract of July 5, 1963 as
a whole, not merely as to the share of the wife, is not
without its basis in the common-sense rule. To be
underscored here is that upon the provisions of Articles 161,
162 and 163 of the Civil Code, the conjugal partnership is
liable for many obligations while the conjugal partnership
exists. Not only that. The conjugal property is even subject
to the payment of debts contracted by either spouse before
the marriage, as those for the payment of fines and
indemnities imposed upon them after the responsibilities in
Article 161 have been covered (Article 163, par. 3), if it turns
out that the spouse who is bound thereby, "should have no
exclusive property or if it should be insufficient." These are
considerations that go beyond the mere equitable share of
the wife in the property. These are reasons enough for the
husband to be stopped from disposing of the conjugal
property without the consent of the wife. Even more
fundamental is the fact that the nullity is decreed by the
Code not on the basis of prejudice but lack of consent of an
indispensable party to the contract under Article 166.37
With respect to the third issue, the Court finds that
respondent spouses are not purchasers in good faith. A
purchaser in good faith is one who buys property of another,
without notice that some other person has a right to, or
interest in, such property and pays full and fair price for the
same, at the time of such purchase, or before he has notice
of the claim or interest of some other persons in the
property. He buys the property with the belief that the
person from whom he receives the thing was the owner and
could convey title to the property. A purchaser cannot close
his eyes to facts which should put a reasonable man on his
guard and still claim he acted in good faith.38
In the instant case, there existed circumstances that should
have placed respondent spouses on guard. The death
certificate of Ignacia, shows that she died on March 22,
1982. The same death certificate, however, reveals that –
(1) it was issued by the Office of the Civil Registrar of Lubao
Pampanga on March 10, 1982; (2) the alleged death of
Ignacia was reported to the Office of the Civil Registrar
on March 4, 1982; and (3) her burial or cremation would be
on March 8, 1982.39 These obvious flaws in the death
certificate should have prompted respondents to investigate
further, especially so that respondent Florentina Mijares
admitted on cross examination that she asked for the death
certificate of Ignacia because she was suspicious that Ignacia
was still alive.40 Moreover, respondent spouses had all the
opportunity to verify the claim of Vicente that he is a
widower because it was their lawyer, Atty. Rodriguito S.
Saet, who represented Vicente in the special proceedings
before the Metropolitan Trial Court.
Neither can respondent spouses rely on the alleged court
approval of the sale. Note that the Order issued by the
Metropolitan Trial Court of Quezon City, Branch XXXI,
appointing Vicente as guardian of his 5 minor children, as
well as the Order authorizing him to sell the estate of Ignacia
were issued only on September 29, 1983 and October 14,
1983, respectively. On the other hand, the sale of the entire
Lot No. 4349-B-2 to respondent spouses appears to have
been made not on March 1, 1983, but even as early as
November 25, 1978. In the "Agreement" dated November
25, 1978, Vicente in consideration of the amount of
P110,000.00, sold to Cipriano Mijares Lot No. 4349-B-2 on
installment basis, with the first installment due on or before
July 31, 1979.41 This was followed by a "Memorandum of
Understanding" executed on July 30, 1979, by Vicente and
Cipriano – (1) acknowledging Cipriano’s receipt of Vicente’s
down payment in the amount of P50,000.00; and (2)
authorizing Florentina Mijares to collect rentals.42 On July
14, 1981, Vicente and Cipriano executed another
"Memorandum of Agreement," stating, among other, that out
of the purchase price of P110,000.00 Vicente had remaining
balance of P19,000.00.43 Clearly therefore, the special
proceedings before the Metropolitan Trial Court of Quezon
City, Branch XXXI, could not have been the basis of
respondent spouses’ claim of good faith because the sale of
Lot No. 4349-B-2 occurred prior thereto.
Respondent spouses cannot deny knowledge that at the time
of the sale in 1978, Vicente was married to Ignacia and that
the latter did not give her conformity to the sale. This is so
because the 1978 "Agreement" described Vicente as
"married" but the conformity of his wife to the sale did not
appear in the deed. Obviously, the execution of another deed
of sale in 1983 over the same Lot No. 4349-B-2, after the
alleged death of Ignacia on March 22, 1982, as well as the
institution of the special proceedings were, intended to
correct the absence of Ignacia’s consent to the sale. Even
assuming that respondent spouses believed in good faith
that Ignacia really died on March 22, 1982, after they
purchased the lot, the fact remains that the sale of Lot No.
4349-B-2 prior to Ignacia’s alleged demise was without her
consent and therefore subject to annulment. The October 14,
1983 order authorizing the sale of the estate of Ignacia,
could not have validated the sale of Lot No. 4349-B-2
because said order was issued on the assumption that
Ignacia was already dead and that the sale dated March 1,
1983 was never categorically approved in the said order.
The fact that the 5 minor children44 of Vicente represented
by the latter, signed the March 1, 1983 deed of sale of Lot
No. 4349-B-2 will not estop them from assailing the validity
thereof. Not only were they too young at that time to
understand the repercussions of the sale, they likewise had
no right to sell the property of their mother who, when they
signed the deed, was very much alive.
If a voidable contract is annulled, the restoration of what has
been given is proper. The relationship between parties in any
contract even if subsequently annulled must always be
characterized and punctuated by good faith and fair dealing.
Hence, for the sake of justice and equity, and in consonance
with the salutary principle of non-enrichment at another’s
expense, the Court sustains the trial court’s order directing
Vicente to refund to respondent spouses the amount of
P110,000.00 which they have paid as purchase price of Lot
No. 4349-B-2.45 The court a quo correctly found that the
subject of the sale was the entire Lot No. 4349-B-2 and that
the consideration thereof is not P40,000.00 as stated in the
March 1, 1983 deed of sale, but P110,000.00 as evidenced
by the – (1) "Agreement" dated November 25, 1978 as well
as the July 30, 1979 "Memorandum of Understanding" and
the July 14, 1981 "Memorandum of Agreement" which
served as receipts of the installment payments made by
respondent Cipriano Mijares; and (2) the receipt duly signed
by Vicente Reyes acknowledging receipt of the amount of
P110,000.00 from respondent spouses as payment of the
sale of the controverted lot.46
The trial court, however, erred in imposing 12% interest per
annum on the amount due the respondents. In Eastern
Shipping Lines, Inc. v. Court of Appeals,47 it was held that
interest on obligations not constituting a loan or forbearance
of money is six percent (6%) annually. If the purchase price
could be established with certainty at the time of the filing of
the complaint, the six percent (6%) interest should be
computed from the date the complaint was filed until finality
of the decision. In Lui v. Loy,48 involving a suit for
reconveyance and annulment of title filed by the first buyer
against the seller and the second buyer, the Court, ruling in
favor of the first buyer and annulling the second sale,
ordered the seller to refund to the second buyer (who was
not a purchaser in good faith) the purchase price of the lots.
It was held therein that the 6% interest should be computed
from the date of the filing of the complaint by the first buyer.
After the judgment becomes final and executory until the
obligation is satisfied, the amount due shall earn interest at
12% per year, the interim period being deemed equivalent to
a forbearance of credit.49
Accordingly, the amount of P110,000.00 due the respondent
spouses which could be determined with certainty at the time
of the filing of the complaint shall earn 6% interest per
annum from June 4, 1986 until the finality of this decision. If
the adjudged principal and the interest (or any part thereof)
remain unpaid thereafter, the interest rate shall be twelve
percent (12%) per annum computed from the time the
judgment becomes final and executory until it is fully
satisfied.
Petitioner’s prayer for payment of rentals should be denied.
Other than the allegation of Ignacia in her Sinumpaang
Salaysay that the apartments could be rented at P1,000.00 a
month, no other evidence was presented to substantiate her
claim. In awarding rentals which are in the nature of actual
damages, the Court cannot rely on mere assertions,
speculations, conjectures or guesswork but must depend on
competent proof and on the best evidence obtainable
regarding the actual amount of loss.50 None, having been
presented in the case at bar, petitioner’s claim for rentals
must be denied.
While as a general rule, a party who has not appealed is not
entitled to affirmative relief other than the ones granted in
the decision of the court below, law and jurisprudence
authorize a tribunal to consider errors, although unassigned,
if they involve (1) errors affecting the lower court’s
jurisdiction over the subject matter, (2) plain errors not
specified, and (3) clerical errors.51 In this case, though
defendant Vicente Reyes did not appeal, the "plain error"
committed by the court a quo as to the award of moral and
exemplary damages must be corrected. These awards cannot
be lumped together as was done by the trial court.52 Moral
and exemplary damages are different in nature, and require
separate determination. Moral damages are awarded where
the claimant experienced physical suffering, mental anguish,
fright, serious anxiety, besmirched reputation, wounded
feelings, moral shock, social humiliation, and similar injury
as a result of the act complained of.53 The award of
exemplary damages, on the other hand, is warranted when
moral, temperate, liquidated, or compensatory damages
were likewise awarded by the court.54
Hence, the trial court’s award of "P50,000.00 by way of
moral and exemplary damages" should be modified. Vicente
Reyes should be ordered to pay the amounts of P25,000.00
as moral damages and P25,000.00 as exemplary damages.
Since Vicente Reyes was among the heirs substituted to the
late Ignacia Aguilar-Reyes, payment of moral and exemplary
damages must be made by Vicente to his children,
petitioners in this case.
306087 in the name of respondent spouses Cipriano Mijares
and Florentina Mijares covering the same property; as well
as the June 29, 1990 Order correcting the typographical
errors in the order dated March 1, 1983, are REINSTATED,
with the following modifications –
(1) The Register of Deeds of Quezon City is ordered to issue
a new certificate of title over Lot No. 4349-B-2, in the name
of petitioners as co-owners thereof;
(2) Vicente Reyes is ordered to reimburse the respondent
spouses the amount of P110,000.00 as purchase price of Lot
No. 4349-B-2, with interest at 6% per annum from June 4,
1986, until finality of this decision. After this decision
becomes final, interest at the rate of 12% per annum on the
principal and interest (or any part thereof) shall be imposed
until full payment.
(3) Defendant Vicente Reyes is ordered to pay the heirs of
the late Ignacia Aguilar-Reyes, the amounts of P25,000.00
as moral damages and P25,000.00 as exemplary damages.
SO ORDERED.

WHEREFORE, in view of all the foregoing, the petition is

PARTIALLY GRANTED. The January 26, 2000 Decision and
June 19, 2002, Resolution of the Court of Appeals in CA-G.R.
No. 28464 are REVERSED and SET ASIDE. The May 31, 1990
Order of the Regional Trial Court of Quezon City, Branch 101,
in Civil Case No. Q-48018, which annulled the March 1, 1983
Deed of Absolute Sale over Lot No. 4349-B-2, and ordered
the Register of Deeds of Quezon City to cancel TCT No.
G.R. No. 141323 June 8, 2005
DAVID V. PELAYO and LORENZA* B.
PELAYO, Petitioners,
vs.
MELKI E. PEREZ, Respondent.
DECISION
AUSTRIA-MARTINEZ, J.:
This resolves the petition for review on certiorari seeking the
reversal of the Decision1 of the Court of Appeals (CA)
promulgated on April 20, 1999 which reversed the Decision
of the Regional Trial Court (RTC) of Panabo, Davao, Branch
34, in Civil Case No. 91-46; and the CA Resolution dated
December 17, 1999 denying petitioners’ motion for
reconsideration.
The antecedent facts as aptly narrated by the CA are as
follows:
David Pelayo (Pelayo),by a Deed of Absolute Sale executed
on January 11, 1988, conveyed to Melki Perez (Perez) two
parcels of agricultural land (the lots) situated in Panabo,
Davao which are portions of Lot 4192, Cad. 276 covered by
OCT P-16873.
Loreza Pelayo (Loreza), wife of Pelayo, and another one
whose signature is illegible witnessed the execution of the
deed.
Loreza, however, signed only on the third page in the space
provided for witnesses on account of which Perez’ application
for registration of the deed with the Office of the Register of
Deeds in Tagum, Davao was denied.
Perez thereupon asked Loreza to sign on the first and second
pages of the deed but she refused, hence, he instituted on
August 8, 1991 the instant complaint for specific
performance against her and her husband Pelayo
(defendants).
The defendants moved to dismiss the complaint on the
ground that it stated no cause of action, citing Section 6 of
RA 6656 otherwise known as the Comprehensive Agrarian
Reform Law which took effect on June 10, 1988 and which
provides that contracts executed prior thereto shall "be valid
only when registered with the Register of Deeds within a
period of three (3) months after the effectivity of this Act."
The questioned deed having been executed on January 10,
1988, the defendants claimed that Perez had at least up to
September 10, 1988 within which to register the same, but
as they failed to, it is not valid and, therefore, unenforceable.
The trial court thus dismissed the complaint. On appeal to
this Court, the dismissal was set aside and the case was
remanded to the lower court for further proceedings.
In their Answer, the defendants claimed that as the lots were
occupied illegally by some persons against whom they filed
an ejectment case, they and Perez who is their friend and
known at the time as an activist/leftist, hence feared by
many, just made it appear in the deed that the lots were sold
to him in order to frighten said illegal occupants, with the
intentional omission of Loreza’s signature so that the deed
could not be registered; and that the deed being simulated
and bereft of consideration is void/inexistent.
Perez countered that the lots were given to him by defendant
Pelayo in consideration of his services as his attorney-in-fact
to make the necessary representation and negotiation with
the illegal occupants-defendants in the ejectment suit; and
that after his relationship with defendant Pelayo became
sour, the latter sent a letter to the Register of Deeds of
Tagum requesting him not to entertain any transaction
concerning the lots title to which was entrusted to Perez who
misplaced and could [not] locate it.
Defendant Pelayo claimed in any event, in his Pre-trial brief
filed on March 19, 1996, that the deed was without his wife
Loreza’s consent, hence, in light of Art. 166 of the Civil Code
which provides:
Article 166. Unless the wife has been declared a non compos
mentis or a spendthrift, or is under civil interdiction or is
confined in a leprosarium, the husband cannot alienate or
encumber any real property of the conjugal partnership
without the wife’s consent . . .
it is null and void.
The trial court, finding, among others, that Perez did not
possess, nor pay the taxes on the lots, that defendant Pelayo
was indebted to Perez for services rendered and, therefore,
the deed could only be considered as evidence of debt, and
that in any event, there was no marital consent to nor actual
consideration for the deed, held that the deed was null and
void and accordingly rendered judgment the dispositive
portion of which reads:
WHEREFORE, judgment is hereby rendered ordering and
directing the defendants to pay plaintiff Melki Perez the sum
of TEN THOUSAND (₱10,000.00) Pesos as principal with 12%
interest per annum starting from the date of filing of the
complaint on August 1, 1991 until plaintiff is fully paid.
The defendants shall likewise pay to plaintiff the sum of
THREE THOUSAND (₱3,000.00) as attorney’s fees.
The court further orders that the Deed of Absolute Sale,
(Annex ‘A’) of the complaint and (Annex ‘C’) of the plaintiff’s
Motion for Summary Judgment is declared null and void and
without force and it is likewise removed as a cloud over
defendants’ title and property in suit. . . ."2
The RTC Decision was appealed by herein respondent Perez
to the CA. Petitioners failed to file their appellees’ brief. The
CA then promulgated its Decision on April 20, 1999 whereby
it ruled that by Lorenza’s signing as witness to the execution
of the deed, she had knowledge of the transaction and is
deemed to have given her consent to the same; that herein
petitioners failed to adduce sufficient proof to overthrow the
presumption that there was consideration for the deed, and
that petitioner David Pelayo, being a lawyer, is presumed to
have acted with due care and to have signed the deed with
full knowledge of its contents and import. The CA reversed
and set aside the RTC Decision, declaring as valid and
enforceable the questioned deed of sale and ordering herein
petitioner Lorenza Pelayo to affix her signature on all pages
of said document.
Petitioners moved for reconsideration of the decision but the
same was denied per Resolution dated December 17, 1999.
The CA found said motion to have been filed out of time and
ruled that even putting aside technicality, petitioners failed
to present any ground bearing on the merits of the case to
justify a reversal or setting aside of the decision.
Hence, this petition for review on certiorari on the following
grounds:
1. The CA erred in ignoring the specific provision of
Section 6, in relation to Section 4 of R.A. No. 6657
otherwise known as the Comprehensive Agrarian
Reform Law of 1988 which took effect on June 15,
1988 and which provides that contracts executed prior
thereto shall "be valid only when registered with the
Register of Deeds within a period of three (3) months
after the effectivity of this Act."
2. The CA erred in holding that the deed of sale was
valid and considering the ₱10,000.00 adjudged by the
trial court as Perez’s remuneration as the
consideration for the deed of sale, instead of declaring
the same as null and void for being fictitious or
simulated and on the basis of Art. 491, Par. 2 of the
New Civil Code which prohibits agents from acquiring
by purchase properties from his principal under his
charge.
3. The CA made a novel ruling that there was implied
marital consent of the wife of petitioner David Pelayo.
4. Petitioners should have been allowed to file their
appellees’ brief to ventilate their side, considering the
existence of peculiar circumstances which prevented
petitioners from filing said brief.
On the other hand, respondent points out that the CA, in
resolving the first appeal docketed as CA-G.R. SP No.
387003 brought by respondent assailing the RTC Order
granting herein petitioners’ motion to dismiss, already ruled
that under R.A. No. 6657, the sale or transfer of private
agricultural land is allowed only when the area of the land
being conveyed constitutes or is a part of, the landowner-
seller retained area and when the total landholding of the
purchaser-transferee, including the property sold, does not
exceed five (5) hectares; that in this case, the land in
dispute is only 1.3 hectares and there is no proof that the
transferee’s (herein respondent) total landholding inclusive
of the subject land will exceed 5 hectares, the landholding
ceiling prescribed by R.A. No. 6657; that the failure of
respondent to register the instrument was not due to his
fault or negligence but can be attributed to Lorenza’s
unjustified refusal to sign two pages of the deed despite
several requests of respondent; and that therefore, the CA
ruled that the deed of sale subject of this case is valid under
R.A. No. 6657.
Respondent further maintains that the CA correctly held in its
assailed Decision that there was consideration for the
contract and that Lorenza is deemed to have given her
consent to the deed of sale.
Respondent likewise opines that the CA was right in denying
petitioners’ motion for reconsideration where they prayed
that they be allowed to file their appellees’ brief as their
counsel failed to file the same on account of said counsel’s
failing health due to cancer of the liver. Respondent
emphasized that in petitioners’ motion for reconsideration,
they did not even cite any errors made by the CA in its
Decision.
The issues boil down to the question of whether or not the
deed of sale was null and void on the following grounds: (a)
for not complying with the provision in R.A. No. 6657 that
such document must be registered with the Register of
Deeds within three months after the effectivity of said law;
(b) for lack of marital consent; (c) for being prohibited under
Article 1491 (2) of the Civil Code; and (d) for lack of
consideration.
We rule against petitioners.
The issue of whether or not the deed of sale is null and void
under R.A. No. 6657, for respondent’s failure to register said
document with the Register of Deeds within three months
after the effectivity of R.A. No. 6657, had been resolved with
finality by the CA in its Decision dated November 24, 1994 in
CA-G.R. SP No. 38700.4 Herein petitioners no longer elevated
said CA Decision to this Court and the same became final
and executory on January 7, 1995.5
In said decision, the CA interpreted Section 4, in relation to
Section 70 of R.A. No. 6657, to mean thus:
. . . the proper interpretation of both sections is that under
R.A. No. 6657, the sale or transfer of a private agricultural
land is allowed only when said land area constitutes or is a
part of the landowner-seller retained area and only when the
total landholdings of the purchaser-transferee, including the
property sold does not exceed five (5) hectares.
Aside from declaring that the failure of respondent to register
the deed was not of his own fault or negligence, the CA ruled
that respondent’s failure to register the deed of sale within
three months after effectivity of The Comprehensive Agrarian
Reform Law did not invalidate the deed of sale as "the
transaction over said property is not proscribed by R.A. No.
6657."
Thus, under the principle of law of the case, said ruling of the
CA is now binding on petitioners.1avvph!1 Such principle was
elucidated in Cucueco vs. Court of Appeals,6 to wit:
Law of the case has been defined as the opinion delivered on
a former appeal. It is a term applied to an established rule
that when an appellate court passes on a question and
remands the case to the lower court for further proceedings,
the question there settled becomes the law of the case upon
subsequent appeal. It means that whatever is once
irrevocably established as the controlling legal rule or
decision between the same parties in the same case
continues to be the law of the case, whether correct on
general principles or not, so long as the facts on which such
decision was predicated continue to be the facts of the case
before the court.
Petitioners not having questioned the Decision of the CA
dated November 24, 1994 which then attained finality, the
ruling that the deed of sale subject of this case is not among
the transactions deemed as invalid under R.A. No. 6657, is
now immutable.
We agree with the CA ruling that petitioner Lorenza, by
affixing her signature to the Deed of Sale on the space
provided for witnesses, is deemed to have given her implied
consent to the contract of sale.
Sale is a consensual contract that is perfected by mere
consent, which may either be express or implied.7 A wife’s
consent to the husband’s disposition of conjugal property
does not always have to be explicit or set forth in any
particular document, so long as it is shown by acts of the
wife that such consent or approval was indeed given.8 In the
present case, although it appears on the face of the deed of
sale that Lorenza signed only as an instrumental witness,
circumstances leading to the execution of said document
point to the fact that Lorenza was fully aware of the sale of
their conjugal property and consented to the sale.
In their Pre-Trial Brief,9 petitioners admitted that even prior
to 1988, they have been having serious problems, including
threats to the life of petitioner David Pelayo, due to conflicts
with the illegal occupants of the property in question, so that
respondent, whom many feared for being a leftist/activist,
offered his help in driving out said illegal occupants.
Human experience tells us that a wife would surely be aware
of serious problems such as threats to her husband’s life and
the reasons for such threats. As they themselves stated,
petitioners’ problems over the subject property had been
going on for quite some time, so it is highly improbable for
Lorenza not to be aware of what her husband was doing to
remedy such problems. Petitioners do not deny that Lorenza
Pelayo was present during the execution of the deed of sale
as her signature appears thereon. Neither do they claim that
Lorenza Pelayo had no knowledge whatsoever about the
contents of the subject document. Thus, it is quite
certain that she knew of the sale of their conjugal property
between her husband and respondent.
Under the rules of evidence, it is presumed that a person
takes ordinary care of his concerns.10 Petitioners did not
even attempt to overcome the aforementioned presumption
as no evidence was ever presented to show that Lorenza was
in any way lacking in her mental faculties and, hence, could
not have fully understood the ramifications of signing the
deed of sale. Neither did petitioners present any evidence
that Lorenza had been defrauded, forced, intimidated or
threatened either by her own husband or by respondent into
affixing her signature on the subject document. If Lorenza
had any objections over the conveyance of the disputed
property, she could have totally refrained from having any
part in the execution of the deed of sale. Instead, Lorenza
even affixed her signature thereto.
Moreover, under Article 173, in relation to Article 166, both
of the New Civil Code, which was still in effect on January 11,
1988 when the deed in question was executed, the lack of
marital consent to the disposition of conjugal property does
not make the contract void ab initio but merely voidable.
Said provisions of law provide:
Art. 166. Unless the wife has been declared a non compos
mentis or a spendthrift, or is under civil interdiction or is
confined in a leprosarium, the husband cannot alienate or
encumber any real property of the conjugal property without
the wife’s consent. If she refuses unreasonably to give her
consent, the court may compel her to grant the same.
...
Art. 173. The wife may, during the marriage, and within ten
years from the transaction questioned, ask the courts for the
annulment of any contract of the husband entered into
without her consent, when such consent is required, or any
act or contract of the husband which tends to defraud her or
impair her interest in the conjugal partnership property.
Should the wife fail to exercise this right, she or her heirs,
after the dissolution of the marriage, may demand the value
of property fraudulently alienated by the husband.
Hence, it has been held that the contract is valid until the
court annuls the same and only upon an action brought by
the wife whose consent was not obtained.11 In the present
case, despite respondent’s repeated demands for Lorenza to
affix her signature on all the pages of the deed of sale,
showing respondent’s insistence on enforcing said contract,
Lorenza still did not file a case for annulment of the deed of
sale. It was only when respondent filed a complaint for
specific performance on August 8, 1991 when petitioners
brought up Lorenza’s alleged lack of consent as an
affirmative defense. Thus, if the transaction was indeed
entered into without Lorenza’s consent, we find it quite
puzzling why for more than three and a half years, Lorenza
did absolutely nothing to seek the nullification of the assailed
contract.
The foregoing circumstances lead the Court to believe that
Lorenza knew of the full import of the transaction between
respondent and her
husband; and, by affixing her signature on the deed of sale,
she, in effect, signified her consent to the disposition of their
conjugal property.
With regard to petitioners’ asseveration that the deed of sale
is invalid under Article 1491, paragraph 2 of the New Civil
Code, we find such argument unmeritorious. Article 1491 (2)
provides:
Art. 1491. The following persons cannot acquire by purchase,
even at a public or judicial auction, either in person or
through the mediation of another:
(2) Agents, the property whose administration or sale may
have been entrusted to them, unless the consent of the
principal has been given;
In Distajo vs. Court of Appeals,12 a landowner, Iluminada
Abiertas, designated one of her sons as the administrator of
several parcels of her land. The landowner subsequently
executed a Deed of Certification of Sale of Unregistered
Land, conveying some of said land to her son/administrator.
Therein, we held that:
Under paragraph (2) of the above article, the prohibition
against agents purchasing property in their hands for sale or
management is not absolute. It does not apply if the
principal consents to the sale of the property in the hands of
the agent or administrator. In this case, the deeds of sale
signed by Iluminada Abiertas shows that she gave consent to
the sale of the properties in favor of her son, Rufo, who was
the administrator of the properties. Thus, the consent of the
principal Iluminada Abiertas removes the transaction out of
the prohibition contained in Article 1491(2).13
The above-quoted ruling is exactly in point with this case
before us. Petitioners, by signing the Deed of Sale in favor of
respondent, are also deemed to have given their consent to
the sale of the subject property in favor of respondent,
thereby making the transaction an exception to the general
rule that agents are prohibited from purchasing the property
of their principals.
Petitioners also argue that the CA erred in ruling that there
was consideration for the sale. We find no error in said
appellate court’s ruling. The element of consideration for the
sale is indeed present. Petitioners, in adopting the trial
court’s narration of antecedent facts in their
petition,14 thereby admitted that they authorized respondent
to represent them in negotiations with the "squatters"
occupying the disputed property and, in consideration of
respondent’s services, they executed the subject deed of
sale. Aside from such services rendered by respondent,
petitioners also acknowledged in the deed of sale that they
received in full the amount of Ten Thousand Pesos.
Evidently, the consideration for the sale is respondent’s
services plus the aforementioned cash money.
Petitioners contend that the consideration stated in the deed
of sale is excessively inadequate, indicating that the deed of
sale was merely simulated. We are not persuaded. Our ruling
in Buenaventura vs. Court of Appeals15 is pertinent, to wit:
. . . Indeed, there is no requirement that the price be equal
to the exact value of the subject matter of sale. . . . As we
stated in Vales vs. Villa:
Courts cannot follow one every step of his life and extricate
him from bad bargains, protect him from unwise
investments, relieve him from one-sided contracts, or annul
the effects of foolish acts. Courts cannot constitute
themselves guardians of persons who are not legally
incompetent. Courts operate not because one person has
been defeated or overcome by another, but because he has
been defeated or overcome illegally. Men may do foolish
things, make ridiculous contracts, use miserable judgment,
and lose money by them – indeed, all they have in the
world; but not for that alone can the law intervene and
restore. There must be, in addition, a violation of the law,
the commission of what the law knows as
an actionable wrong, before the courts are authorized to lay
hold of the situation and remedy it.16
Verily, in the present case, petitioners have not presented
proof that there has been fraud, mistake or undue influence
exercised upon them by respondent. It is highly unlikely and
contrary to human experience that a layman like respondent
would be able to defraud, exert undue influence, or in any
way vitiate the consent of a lawyer like petitioner David
Pelayo who is expected to be more knowledgeable in the
ways of drafting contracts and other legal transactions.
Furthermore, in their Reply to Respondent’s
Memorandum,17 petitioners adopted the CA’s narration of
fact that petitioners stated in a letter they sent to the
Register of Deeds of Tagum that they have entrusted the
titles over subject lots to herein respondent. Such act is a
clear indication that they intended to convey the subject
property to herein respondent and the deed of sale was not
merely simulated or fictitious.
Lastly, petitioners claim that they were not able to fully
ventilate their defense before the CA as their lawyer, who
was then suffering from cancer of the liver, failed to file their
appellees’ brief. Thus, in their motion for reconsideration of
the CA Decision, they prayed that they be allowed to submit
such appellees’ brief. The CA, in its Resolution dated
December 17, 1999, stated thus:
By movant-defendant-appellee’s own information, his
counsel received a copy of the decision on May 5, 1999. He,
therefore, had fifteen (15) days from said date or up to May
20, 1999 to file the motion. The motion, however, was sent
through a private courier and, therefore, considered to have
been filed on the date of actual receipt on June 17, 1999 by
the addressee – Court of Appeals, was filed beyond the
reglementary period.
Technicality aside, movant has not proffered any ground
bearing on the merits of the case why the decision should be
set aside.1awphi1
Petitioners never denied the CA finding that their motion for
reconsideration was filed beyond the fifteen-day
reglementary period. On that point alone, the CA is correct in
denying due course to said motion. The motion having been
belatedly filed, the CA Decision had then attained finality.
Thus, in Abalos vs. Philex Mining Corporation,18 we held that:
IN VIEW OF THE FOREGOING, the petition is DENIED and
the Decision of the Court of Appeals dated April 20, 1999 and
its Resolution dated December 17, 1999 are
hereby AFFIRMED.

. . . Nothing is more settled in law than that once a judgment

attains finality it thereby becomes immutable and
unalterable. It may no longer be modified in any respect,
even if the modification is meant to correct what is perceived
to be an erroneous conclusion of fact or law, and regardless
of whether the modification is attempted to be made by the
court rendering it or by the highest court of the land.

Moreover, it is pointed out by the CA that said motion did not

present any defense or argument on the merits of the case
that could have convinced the CA to reverse or modify its
Decision.

We have consistently held that a petitioner’s right to due

process is not violated where he was able to move for
reconsideration of the order or decision in question.19 In this
case, petitioners had the opportunity to fully expound on
their defenses through a motion for reconsideration.
Petitioners did file such motion but they wasted such
opportunity by failing to present therein whatever errors they
believed the CA had committed in its Decision. Definitely,
therefore, the denial of petitioners’ motion for
reconsideration, praying that they be allowed to file
appellees’ brief, did not infringe petitioners’ right to due
process as any issue that petitioners wanted to raise could
and should have been contained in said motion for
reconsideration.
G.R. No. 170166 April 6, 2011
JOE A. ROS and ESTRELLA AGUETE, Petitioners,
vs.
PHILIPPINE NATIONAL BANK - LAOAG
BRANCH, Respondent.
DECISION
CARPIO, J.:
The Case
G.R. No. 170166 is a petition for review1 assailing the
Decision2 promulgated on 17 October 2005 by the Court of
Appeals (appellate court) in CA-G.R. CV No. 76845. The
appellate court granted the appeal filed by the Philippine
National Bank – Laoag Branch (PNB). The appellate court
reversed the 29 June 2001 Decision of Branch 15 of the
Regional Trial Court of Laoag City (trial court) in Civil Case
No. 7803.
The trial court declared the Deed of Real Estate Mortgage
executed by spouses Jose A. Ros3 (Ros) and Estrella Aguete
(Aguete) (collectively, petitioners), as well as the subsequent
foreclosure proceedings, void. Aside from payment of
attorney’s fees, the trial court also ordered PNB to vacate the
subject property to give way to petitioners’ possession.
The Facts
The appellate court narrated the facts as follows:
On January 13, 1983, spouses Jose A. Ros and Estrella
Aguete filed a complaint for the annulment of the Real Estate
Mortgage and all legal proceedings taken thereunder against
PNB, Laoag Branch before the Court of First Instance, Ilocos
Norte docketed as Civil Case No. 7803.
The complaint was later amended and was raffled to the
Regional Trial Court, Branch 15, Laoag City.
The averments in the complaint disclosed that plaintiff-
appellee Joe A. Ros obtained a loan of ₱115,000.00 from PNB
Laoag Branch on October 14, 1974 and as security for the
loan, plaintiff-appellee Ros executed a real estate mortgage
involving a parcel of land – Lot No. 9161 of the Cadastral
Survey of Laoag, with all the improvements thereon
described under Transfer Certificate of Title No. T-9646.
Upon maturity, the loan remained outstanding. As a result,
PNB instituted extrajudicial foreclosure proceedings on the
mortgaged property. After the extrajudicial sale thereof, a
Certificate of Sale was issued in favor of PNB, Laoag as the
highest bidder. After the lapse of one (1) year without the
property being redeemed, the property was consolidated and
registered in the name of PNB, Laoag Branch on August 10,
1978.
Claiming that she (plaintiff-appellee Estrella Aguete) has no
knowledge of the loan obtained by her husband nor she
consented to the mortgage instituted on the conjugal
property – a complaint was filed to annul the proceedings
pertaining to the mortgage, sale and consolidation of the
property – interposing the defense that her signatures
affixed on the documents were forged and that the loan did
not redound to the benefit of the family.1avvphi1
In its answer, PNB prays for the dismissal of the complaint
for lack of cause of action, and insists that it was plaintiffs-
appellees’ own acts [of]
omission/connivance that bar them from recovering the
subject property on the ground of estoppel, laches,
abandonment and prescription.4]
The Trial Court’s Ruling
On 29 June 2001, the trial court rendered its Decision in
5
favor of petitioners. The trial court declared that Aguete did
not sign the loan documents, did not appear before the
Notary Public to acknowledge the execution of the loan
documents, did not receive the loan proceeds from PNB, and
was not aware of the loan until PNB notified her in 14 August
1978 that she and her family should vacate the mortgaged
property because of the expiration of the redemption period.
Under the Civil Code, the effective law at the time of the
transaction, Ros could not encumber any real property of the
conjugal partnership without Aguete’s consent. Aguete may,
during their marriage and within ten years from the
transaction questioned, ask the courts for the annulment of
the contract her husband entered into without her consent,
especially in the present case where her consent is required.
The trial court, however, ruled that its decision is without
prejudice to the right of action of PNB to recover the amount
of the loan and its interests from Ros.
The dispositive portion reads:
WHEREFORE, premises considered, judgment is hereby
rendered:
1. DECLARING the Deed of Real Estate Mortgage
(Exhibit "C") and the subsequent foreclosure
proceedings conducted thereon NULL and VOID;
2. ORDERING the Register of Deeds of the City of
Laoag to cancel TCT No. T-15276 in the name of
defendant PNB and revert the same in the name of
plaintiffs spouses Joe Ros and Estrella Aguete;
3. ORDERING defendant to vacate and turnover the
possession of the premises of the property in suit to
the plaintiffs; and
4. ORDERING defendant to pay plaintiffs attorney’s fee
and litigation expenses in the sum of TEN THOUSAND
(₱10,000.00) PESOS.
No pronouncement as to costs.
SO ORDERED.6]
PNB filed its Notice of Appeal7 of the trial court’s decision on
13 September 2001 and paid the corresponding fees.
Petitioners filed on the same date a motion for execution
pending appeal,8 which PNB opposed.9 In their comment to
the opposition10 filed on 10 October 2001, petitioners stated
that at the hearing of the motion on 3 October 2001, PNB’s
lay representative had no objection to the execution of
judgment pending appeal. Petitioners claimed that the house
on the subject lot is dilapidated, a danger to life and limb,
and should be demolished. Petitioners added that they
obliged themselves to make the house habitable at a cost of
not less ₱50,000.00. The repair cost would accrue to PNB’s
benefit should the appellate court reverse the trial court. PNB
continued to oppose petitioners’ motion.11
In an Order12 dated 8 May 2002, the trial court found
petitioners’ motion for execution pending appeal improper
because petitioners have made it clear that they were willing
to wait for the appellate court’s decision. However, as a court
of justice and equity, the trial court allowed petitioners to
occupy the subject property with the condition that
petitioners would voluntarily vacate the premises and waive
recovery of improvements introduced should PNB prevail on
appeal.
The Appellate Court’s Ruling
On 17 October 2005, the appellate court rendered its
Decision13 and granted PNB’s appeal. The appellate court
reversed the trial court’s decision, and dismissed petitioners’
complaint.
The appellate court stated that the trial court concluded
forgery without adequate proof; thus it was improper for the
trial court to rely solely on Aguete’s testimony that her
signatures on the loan documents were forged. The appellate
court declared that Aguete affixed her signatures on the
documents knowingly and with her full consent.
Assuming arguendo that Aguete did not give her consent to
Ros’ loan, the appellate court ruled that the conjugal
partnership is still liable because the loan proceeds
redounded to the benefit of the family. The records of the
case reveal that the loan was used for the expansion of the
family’s business. Therefore, the debt obtained is chargeable
against the conjugal partnership.
Petitioners filed the present petition for review before this
Court on 9 December 2005.
The Issues
Petitioners assigned the following errors:
I. The Honorable Court of Appeals erred in not giving weight
to the findings and conclusions of the trial court, and in
reversing and setting aside such findings and conclusions
without stating specific contrary evidence;
II. The Honorable Court of Appeals erred in declaring the real
estate mortgage valid;
III. The Honorable Court of Appeals erred in declaring,
without basis, that the loan contracted by husband Joe A.
Ros with respondent Philippine National Bank – Laoag
redounded to the benefit of his family, aside from the fact
that such had not been raised by respondent in its appeal.14]
The Court’s Ruling
The petition has no merit. We affirm the ruling of the
appellate court.
The Civil Code was the applicable law at the time of the
mortgage. The subject property is thus considered part of
the conjugal partnership of gains. The pertinent articles of
the Civil Code provide:
Art. 153. The following are conjugal partnership property:
(1) That which is acquired by onerous title during the
marriage at the expense of the common fund, whether
the acquisition be for the partnership, or for only one
of the spouses;
(2) That which is obtained by the industry, or work or
as salary of the spouses, or of either of them;
 (3) The fruits, rents or interest received or due during
the marriage, coming from the common property or
from the exclusive property of each spouse.
Art. 160. All property of the marriage is presumed to belong
to the conjugal partnership, unless it be proved that it
pertains exclusively to the husband or to the wife.
Art. 161. The conjugal partnership shall be liable for:
(1) All debts and obligations contracted by the
husband for the benefit of the conjugal partnership,
and those contracted by the wife, also for the same
purpose, in the cases where she may legally bind the
partnership;
(2) Arrears or income due, during the marriage, from
obligations which constitute a charge upon property of
either spouse or of the partnership;
(3) Minor repairs or for mere preservation made
during the marriage upon the separate property of
either the husband or the wife; major repairs shall not
be charged to the partnership;
(4) Major or minor repairs upon the conjugal
partnership property;
(5) The maintenance of the family and the education
of the children of both husband and wife, and of
legitimate children of one of the spouses;
(6) Expenses to permit the spouses to complete a
professional, vocational or other course.
Art. 166. Unless the wife has been declared a non compos
mentis or a spendthrift, or is under civil interdiction or is
confined in a leprosarium, the husband cannot alienate or
encumber any real property of the conjugal partnership
without the wife’s consent. If she refuses unreasonably to
give her consent, the court may compel her to grant the
same.
Art. 173. The wife may, during the marriage, and within ten
years from the transaction questioned, ask the courts for the
annulment of any contract of the husband entered into
without her consent, when such consent is required, or any
act or contract of the husband which tends to defraud her or
impair her interest in the conjugal partnership property.
Should the wife fail to exercise this right, she or her heirs
after the dissolution of the marriage may demand the value
of the property fraudulently alienated by the husband.
There is no doubt that the subject property was acquired
during Ros and Aguete’s marriage. Ros and Aguete were
married on 16 January 1954, while the subject property was
acquired in 1968.15 There is also no doubt that Ros
encumbered the subject property when he mortgaged it for
P115,000.00 on 23 October 1974.16 PNB Laoag does not
doubt that Aguete, as evidenced by her signature, consented
to Ros’ mortgage to PNB of the subject property. On the
other hand, Aguete denies ever having consented to the loan
and also denies affixing her signature to the mortgage and
loan documents.
The husband cannot alienate or encumber any conjugal real
property without the consent, express or implied, of the wife.
Should the husband do so, then the contract is
voidable.17 Article 173 of the Civil Code allows Aguete to
question Ros’ encumbrance of the subject property.
However, the same article does not guarantee that the
courts will declare the annulment of the contract. Annulment
will be declared only upon a finding that the wife did not give
her consent. In the present case, we follow the conclusion of
the appellate court and rule that Aguete gave her consent to
Ros’ encumbrance of the subject property.
The documents disavowed by Aguete are acknowledged
before a notary public, hence they are public documents.
Every instrument duly acknowledged and certified as
provided by law may be presented in evidence without
further proof, the certificate of acknowledgment being prima
facie evidence of the execution of the instrument or
document involved.18 The execution of a document that has
been ratified before a notary public cannot be disproved by
the mere denial of the alleged signer.19 PNB was correct
when it stated that petitioners’ omission to present other
positive evidence to substantiate their claim of forgery was
fatal to petitioners’ cause.20 Petitioners did not present any
corroborating witness, such as a handwriting expert, who
could authoritatively declare that Aguete’s signatures were
really forged.
A notarized document carries the evidentiary weight
conferred upon it with respect to its due execution, and it
has in its favor the presumption of regularity which may only
be rebutted by evidence so clear, strong and convincing as to
exclude all controversy as to the falsity of the certificate.
Absent such, the presumption must be upheld. The burden of
proof to overcome the presumption of due execution of a
notarial document lies on the one contesting the same.
Furthermore, an allegation of forgery must be proved by
clear and convincing evidence, and whoever alleges it has
the burden of proving the same.21]
Ros himself cannot bring action against PNB, for no one can
come before the courts with unclean hands.1avvphi1 In their
memorandum before the trial court, petitioners themselves
admitted that Ros forged Aguete’s signatures.
Joe A. Ros in legal effect admitted in the complaint that the
signatures of his wife in the questioned documents are
forged, incriminating himself to criminal prosecution. If he
were alive today, he would be prosecuted for forgery. This
strengthens the testimony of his wife that her signatures on
the questioned documents are not hers.
In filing the complaint, it must have been a remorse of
conscience for having wronged his family; in forging the
signature of his wife on the questioned documents; in
squandering the P115,000.00 loan from the bank for himself,
resulting in the foreclosure of the conjugal property; eviction
of his family therefrom; and, exposure to public contempt,
embarassment and ridicule.22]
The application for loan shows that the loan would be used
exclusively "for additional working [capital] of buy & sell of
garlic & virginia tobacco."23 In her testimony, Aguete
confirmed that Ros engaged in such business, but claimed to
be unaware whether it prospered. Aguete was also aware of
loans contracted by Ros, but did not know where he "wasted
the money."24 Debts contracted by the husband for and in
the exercise of the industry or profession by which he
contributes to the support of the family cannot be deemed to
be his exclusive and private debts.25
If the husband himself is the principal obligor in the
contract, i.e., he directly received the money and services to
be used in or for his own business or his own profession, that
contract falls within the term "x x x x obligations for the
benefit of the conjugal partnership." Here, no actual benefit
may be proved. It is enough that the benefit to the family is
apparent at the signing of the contract. From the very nature
of the contract of loan or services, the family stands to
benefit from the loan facility or services to be rendered to
the business or profession of the husband. It is immaterial, if
in the end, his business or profession fails or does not
succeed. Simply stated, where the husband contracts
obligations on behalf of the family business, the law
presumes, and rightly so, that such obligation will redound to
the benefit of the conjugal partnership.26]

For this reason, we rule that Ros’ loan from PNB redounded
to the benefit of the conjugal partnership. Hence, the debt is
chargeable to the conjugal partnership.

WHEREFORE, we DENY the petition. The Decision of the

Court of Appeals in CA-G.R. CV No. 76845 promulgated on
17 October 2005 is AFFIRMED. Costs against petitioners.

SO ORDERED.
G.R. No. 146548 December 18, 2009
HEIRS OF DOMINGO HERNANDEZ, SR., namely:
SERGIA V. HERNANDEZ (Surviving Spouse), DOMINGO
V. HERNANDEZ, JR., and MARIA LEONORA WILMA
HERNANDEZ, Petitioners,
vs.
PLARIDEL MINGOA, SR., DOLORES CAMISURA,
MELANIE MINGOA AND QUEZON CITY REGISTER OF
DEEDS,1 Respondents.
DECISION
LEONARDO-DE CASTRO, J.:
This is a petition for review on certiorari of the
Decision2 dated September 7, 2000 and Resolution3 dated
December 29, 2000, both of the Court of Appeals (CA), in
CA-G.R. CV No. 54896. The CA Decision reversed and set
aside the decision of the Regional Trial Court (RTC) of
Quezon City (Branch 92), which ruled in favor of herein
petitioners in the action for reconveyance filed by the latter
in said court against the respondents. The CA Resolution
denied the petitioners’ motion for reconsideration.
The subject matter of the action is a parcel of land with an
area of 520.50 square meters situated in Diliman, Quezon
City, described as Lot 15, Block 89 of the subdivision plan
Psd-68807, covered by Transfer Certificate of Title (TCT) No.
1075344 issued on May 23, 1966 and registered in the name
of Domingo B. Hernandez, Sr. married to Sergia V.
Hernandez. Later on, said TCT No. 107534 was cancelled and
in lieu thereof, TCT No. 2901215 was issued in favor of
Melanie Mingoa.
These are the factual antecedents of this case:
On February 11, 1994, a complaint6 was filed with the RTC of
Quezon City by herein petitioners, heirs of Domingo
Hernandez, Sr., namely, spouse Sergia Hernandez and their
surviving children Domingo, Jr. and Maria Leonora Wilma,
against the respondents herein, Dolores Camisura, Melanie
Mingoa, Atty. Plaridel Mingoa, Sr. and all persons claiming
rights under the latter, and the Quezon City Register of
Deeds. The case was docketed as Civil Case No. 094-19276.
In their complaint, the petitioners asked for (a) the
annulment and/or declaration of nullity of TCT No. 290121
including all its derivative titles, the Irrevocable Special
Power of Attorney (SPA) dated February 14, 1963 in favor of
Dolores Camisura,7 the SPA dated May 9, 1964 in favor of
Plaridel Mingoa, Sr.,8 and the Deed of Absolute Sale of Real
Estate9 dated July 9, 1978 executed by Plaridel Mingoa, Sr.
in favor of Melanie Mingoa for being products of forgery and
falsification; and (b) the reconveyance and/or issuance to
them (petitioners) by the Quezon City Register of Deeds of
the certificate of title covering the subject property.
Respondents filed a Motion to Dismiss10 the complaint
interposing the following grounds: the claim or demand has
been paid, waived, abandoned or otherwise extinguished;
lack of cause of action; lack of jurisdiction over the person of
the defendants or over the subject or nature of the suit; and
prescription. The following were attached to said motion: a
Deed of Transfer of Rights11 dated February 14, 1963 from
Domingo Hernandez, Sr. to Camisura, the Irrevocable
SPA12 executed by the former in the latter’s favor, and a
Deed of Sale of Right in a Residential Land and
Improvements Therein13 dated May 9, 1964 executed by
Camisura in favor of Plaridel Mingoa, Sr.
In its Order14 dated September 1, 1994, the trial court
denied respondents’ motion to dismiss.
Respondents filed a petition for certiorari and prohibition with
the CA assailing the aforementioned Order of denial by the
RTC. Their initial petition was dismissed for being insufficient
in form. Respondents then re-filed their petition, which was
docketed as CA-G.R. SP No. 36868. In a decision15 dated
May 26, 1995, respondents’ re-filed petition was denied due
course by the CA. Having been filed beyond the
reglementary period, respondents’ subsequent motion for
reconsideration was simply noted by the CA in its Resolution
of July 7, 1995. On the basis of a technicality, this Court, in a
Resolution dated September 27, 1995, dismissed
respondents' appeal which was docketed as G.R. No.
121020. Per Entry of Judgment,16 said Resolution became
final and executory on January 2, 1996.
Meanwhile, respondents filed their Answer17 in the main case
therein denying the allegations of the complaint and averring
as defenses the same grounds upon which they anchored
their earlier motion to dismiss.
The parties having failed to amicably settle during the
scheduled pre-trial conference, the case proceeded to trial.
The evidence respectively presented by the parties is
summarized as follows:18
x x x [It] appears that in the early part of 1958, Domingo
Hernandez, Sr. (who was then a Central Bank employee) and
his spouse Sergia V. Hernandez were awarded a piece of real
property by the Philippine Homesite and Housing Corporation
(PHHC) by way of salary deduction. On October 18, 1963,
the [petitioners] then having paid in full the entire amount of
P6,888.96, a Deed of Absolute Sale of the property was
executed by the PHHC in their favor. TCT No. 107534,
covering the property was issued to the [petitioners] on May
23, 1966. It bears an annotation of the retention period of
the property by the awardee (i.e., restriction of any
unauthorized sale to third persons within a certain period).
Tax payments due on the property were religiously paid
(until 1955) by the [petitioners] as evidenced by receipts
under the [petitioners’] name.
Hernandez, Sr. died intestate in April 1983 and it was only
after his burial that his heirs found out that TCT No. 107534
was already cancelled a year before (in 1982), and in lieu
thereof, TCT No. 290121 was issued to the [respondents].
Upon diligent inquiry, [petitioners] came to know that the
cancellation of TCT (No. 107534) in favor of the
[respondents’] xxx TCT (No. 290121) was based upon three
sets of documents, namely, (1) Irrevocable Power of
Attorney; (2) Irrevocable Special Power of Attorney; and (3)
Deed of Absolute Sale.
[Petitioners] also allege that because of financial difficulties,
they were only able to file a complaint on February 11, 1995
after consulting with several lawyers.
xxxx
[Respondents] xxx on the other hand do not deny that
Hernandez, Sr. was indeed awarded a piece of real property
by the PHHC. According to the [respondents] xxx,
Hernandez, Sr. was awarded by the PHHC the Right to
Purchase the property in question; however, the late
Hernandez, Sr. failed to pay all the installments due on the
said property. Thus, afraid that he would forfeit his right to
purchase the property awarded to him, Hernandez, Sr. sold
to Dolores Camisura his rights for the sum of P6,500.00 on
February 14, 1963, through a deed of transfer of rights,
seemingly a printed form from the PHHC. Simultaneous to
this, Hernandez, Sr. and his spouse executed an irrevocable
special power of attorney, appointing Dolores Camisura as
their attorney-in-fact with express power to sign, execute
and acknowledge any contract of disposition, alienation and
conveyance of her right over the aforesaid parcel of land.
Apparently, this special power of attorney was executed for
the purpose of securing her right to transfer the property to
a third person considering that there was a prohibition to
dispose of the property by the original purchaser within one
(1) year from full payment. Else wise stated, the irrevocable
power of attorney was necessary in order to enable the
buyer, Dolores Camisura, to sell the lot to another, Plaridel
Mingoa, without the need of requiring Hernandez, to sign a
deed of conveyance.
On May 9, 1964, Dolores Camisura sold her right over the
said property to Plaridel Mingoa for P7,000.00. Camisura
then executed a similar irrevocable power of attorney and a
deed of sale of right in a residential land and improvements
therein in favor of Plaridel Mingoa. Upon such payment and
on the strength of the said irrevocable power of attorney,
Plaridel Mingoa took possession of the said property and
began paying all the installments due on the property to
PHHC. Plaridel Mingoa further secured TCT No. 107534
(issued in the name of Domingo Hernandez, Sr.) on May,
1966. On July 9, 1978, Plaridel Mingoa sold to his eldest
child, Melanie Mingoa, the property in question for
P18,000.00. TCT No. 107534 was thus cancelled and TCT No.
290121 was issued in the name of Melanie Mingoa. It is
further claimed that since 1966 until 1982, Plaridel Mingoa
religiously paid all the taxes due on the said property; and
that from 1983 up to the present, Melanie Mingoa paid all
the property taxes due thereon aside from having actual
possession of the said property. (words in brackets ours)
On May 9, 1996, the RTC rendered a decision19 in favor of
the petitioners, with the following dispositive portion:
WHEREFORE, premises considered, judgment is hereby
rendered in favor of the plaintiffs as follows:
1) TCT No. 290121 and all its derivative titles are
hereby declared null and void;
2) Ordering the Register of Deeds of Quezon City to
cancel TCT No. 290121 issued in the name of
defendant Melanie Mingoa and corresponding owner’s
duplicate certificate and all its derivative title[s];
3) Ordering defendant Melanie Mingoa and all
derivative owners to surrender owner’s duplicate
copies of transfer certificate of title to the Register of
Deeds of Quezon City for cancellation upon finality of
this decision;
4) Ordering the defendants except the Register of
Deeds of Quezon City to turn over to the plaintiffs the
peaceful possession of the subject property; and
5) Ordering the defendants except the Register of
Deeds of Quezon City to jointly and severally (sic) pay
the plaintiffs the sum of P10,000.00 as attorney’s
[fees] and to pay the costs of suit.
SO ORDERED.
In ruling in favor of petitioners, the trial court reasoned as
follows:20
The two (2) parties in the case at bar gave out conflicting
versions as to who paid for the subject property. The
plaintiffs claim that they were the ones who paid the entire
amount out of the conjugal funds while it is the contention of
the defendant Mingoa that the former were not able to pay.
The defendant alleged that the right to purchase was sold to
him and he was able to pay the whole amount. The Court is
of the opinion that petitioners’ version is more credible taken
together with the presence of the irrevocable power of
attorney which both parties admitted. In light of the version
of the defendants, it is highly improbable that a Power of
Attorney would be constituted by the plaintiffs authorizing
the former to sell the subject property. This is because for all
intents and purposes, the land is already the defendants’ for
if we are to follow their claim, they paid for the full amount
of the same. It can be safely concluded then that the Power
of Attorney was unnecessary because the defendants, as
buyers, can compel the plaintiff-sellers to execute the
transfer of the said property after the period of prohibition
has lapsed. The defendants, as owners, will have the right to
do whatever they want with the land even without an
Irrevocable Power of Attorney. Since the presence of the
Irrevocable Power of Attorney is established, it is now the
task of this Court to determine the validity of the sale made
by virtue of the said Power of Attorney. As what was said
earlier, the Court subscribes to the points raised by the
plaintiffs. It was proved during trial that the signature of the
wife was falsified. Therefore, it is as if the wife never
authorized the agent to sell her share of the subject land, it
being conjugal property. It follows that the sale of half of the
land is invalid. However, it must be pointed out that the
signature of the deceased husband was never contested and
is therefore deemed admitted. We now come to the half
which belongs to the deceased husband. The Law on Sales
expressly prohibits the agent from purchasing the property
of the principal without the latter’s consent (Article 1491 of
the Civil Code). It was established from the records that
defendant Plaridel Mingoa sold the subject land to his
daughter Melanie. It is now for the Court to decide whether
this transaction is valid. x x x Considering that the sale took
place in July 1978, it follows from simple mathematical
computation that Melanie was then a minor (20 years of age)
when she allegedly bought the property from her father.
Since Melanie’s father is the sub-agent of the deceased
principal, he is prohibited by law from purchasing the land
without the latter’s consent. This being the case, the sale is
invalid for it appears that Plaridel Mingoa sold the land to
himself. It should be noted that the defendants could have
easily presented Melanie’s birth certificate, it being at their
disposal, but they chose not to. Because of this, this Court is
of the belief that the presumption that evidence willfully
suppressed would be adverse if produced arises.
The trial court denied respondents’ motion for
reconsideration of the aforementioned decision in its
Order21 of August 22, 1996.
Aggrieved, the respondents appealed to the CA, where their
case was docketed as CA-G.R. CV No. 54896. Holding that
the petitioners were barred by prescription and laches to
take any action against the respondents, the CA, in its herein
assailed Decision22 dated September 7, 2000, reversed and
set aside the appealed decision, thereby dismissing the
complaint filed by the petitioners before the trial court. In
full, the disposition reads:
WHEREFORE, in view of the foregoing, the Decision of the
RTC Branch 92, Quezon City, in Civil Case No. Q-94-19276,
entitled, "Heirs of Domingo Hernandez, Sr. vs. Dolores
Camisura, et. al.," is hereby REVERSED AND SET ASIDE. A
new one is hereby entered, DISMISSING the complaint in
Civil Case No. Q-94-19276 entitled, "Heirs of Domingo
Hernandez, Sr. vs. Dolores Camisura, et. al.," filed by the
plaintiffs-appellees before the RTC Branch 92, Quezon City
for lack of merit.
SO ORDERED.
Petitioners’ subsequent motion for reconsideration was
denied by the CA in its impugned Resolution23 dated
December 29, 2000.
Hence, petitioners are now before this Court via the present
recourse. The ten (10) assigned errors set forth in the
petition all boil down to the essential issue of whether the
title of the subject property in the name of respondent
Melanie Mingoa may still be reconveyed to the petitioners. As
we see it, the resolution thereof hinges on these two pivotal
questions: (1) whether there was a valid alienation involving
the subject property; and (2) whether the action impugning
the validity of such alienation has prescribed and/or was
barred by laches.
The Court shall deal first with the procedural issues raised by
the respondents in their Comment.24
We held in Vera-Cruz v. Calderon25 that:
As a general rule, only questions of law may be raised in a
petition for review on certiorari to the Supreme Court.
Although it has long been settled that findings of fact are
conclusive upon this Court, there are exceptional
circumstances which would require us to review findings of
fact of the Court of Appeals, to wit:
(1) the conclusion is a finding grounded entirely on
speculation, surmise and conjectures; (2) the inference
made is manifestly mistaken; (3) there is grave abuse of
discretion; (4) the judgment is based on misapprehension of
facts; (5) the findings of fact are conflicting; (6) the Court of
Appeals went beyond the issues of the case and its findings
are contrary to the admissions of both appellant and
appellees; (7) the findings of fact of the Court of Appeals are
contrary to those of the trial court; (8) said findings of fact
are conclusions without citation of specific evidence on which
they are based; (9) the facts set forth in the decision as well
as in the petitioner’s main and reply briefs are not disputed
by the respondents; (10) the finding of fact of the Court of
Appeals is premised on the supposed absence of evidence
and is contradicted by evidence on record. (emphasis ours)
The petition before us raises factual issues which are not
proper in a petition for review under Rule 45 of the Rules of
Court. However, we find that one of the exceptional
circumstances qualifying a factual review by the Court exists,
that is, the factual findings of the CA are at variance with
those of the trial court. We shall then give due course to the
instant petition and review the factual findings of the CA.
Even if only petitioner Domingo Hernandez, Jr. executed the
Verification/Certification26 against forum-shopping, this will
not deter us from proceeding with the judicial determination
of the issues in this petition. As we ratiocinated in Heirs of
Olarte v. Office of the President:27
The general rule is that the certificate of non-forum shopping
must be signed by all the plaintiffs in a case and the
signature of only one of them is insufficient. However, the
Court has also stressed that the rules on forum shopping
were designed to promote and facilitate the orderly
administration of justice and thus should not be interpreted
with such absolute literalness as to subvert its own ultimate
and legitimate objective. The rule of substantial compliance
may be availed of with respect to the contents of the
certification. This is because the requirement of strict
compliance with the provisions regarding the certification of
non-forum shopping merely underscores its mandatory
nature in that the certification cannot be altogether
dispensed with or its requirements completely disregarded.
Thus, under justifiable circumstances, the Court has relaxed
the rule requiring the submission of such certification
considering that although it is obligatory, it is not
jurisdictional.
In HLC Construction and Development Corporation v. Emily
Homes Subdivision Homeowners Association, it was held that
the signature of only one of the petitioners in the certification
against forum shopping substantially complied with rules
because all the petitioners share a common interest and
invoke a common cause of action or defense.
The same leniency was applied by the Court in Cavile v.
Heirs of Cavile, because the lone petitioner who executed the
certification of non-forum shopping was a relative and co-
owner of the other petitioners with whom he shares a
common interest. x x x
xxx
In the instant case, petitioners share a common interest and
defense inasmuch as they collectively claim a right not to be
dispossessed of the subject lot by virtue of their and their
deceased parents’ construction of a family home and
occupation thereof for more than 10 years. The commonality
of their stance to defend their alleged right over the
controverted lot thus gave petitioners xxx authority to inform
the Court of Appeals in behalf of the other petitioners that
they have not commenced any action or claim involving the
same issues in another court or tribunal, and that there is no
other pending action or claim in another court or tribunal
involving the same issues. x x x
Here, all the petitioners are immediate relatives who share a
common interest in the land sought to be reconveyed and a
common cause of action raising the same arguments in
support thereof. There was sufficient basis, therefore, for
Domingo Hernandez, Jr. to speak for and in behalf of his co-
petitioners when he certified that they had not filed any
action or claim in another court or tribunal involving the
same issues. Thus, the Verification/Certification that
Hernandez, Jr. executed constitutes substantial compliance
under the Rules.
Anent the contention that the petition erroneously impleaded
the CA as respondent in contravention of Section 4(a)28 of
Rule 45 of the 1997 Rules of Civil Procedure, we shall apply
our ruling in Simon v. Canlas,29 wherein we held that:
x x x [The] Court agrees that the correct procedure, as
mandated by Section 4, Rule 45 of the 1997 Rules of Civil
Procedure, is not to implead the lower court which rendered
the assailed decision. However, impleading the lower court
as respondent in the petition for review on certiorari does not
automatically mean the dismissal of the appeal but merely
authorizes the dismissal of the petition. Besides, formal
defects in petitions are not uncommon. The Court has
encountered previous petitions for review on certiorari that
erroneously impleaded the CA. In those cases, the Court
merely called the petitioners’ attention to the defects and
proceeded to resolve the case on their merits.
The Court finds no reason why it should not afford the same
liberal treatment in this case. While unquestionably, the
Court has the discretion to dismiss the appeal for being
defective, sound policy dictates that it is far better to dispose
of cases on the merits, rather than on technicality as the
latter approach may result in injustice. This is in accordance
with Section 6, Rule 1 of the 1997 Rules of Civil Procedure
which encourages a reading of the procedural requirements
in a manner that will help secure and not defeat justice.
We now come to the substantive issues.
As correctly found by the appellate court, the following facts
are undisputed:30
1. Domingo Hernandez, Sr. was awarded a piece of
real property in 1958 by the PHHC as part of the
government’s housing program at the time. Title over
the said property was issued in 1966 in the name of
Hernandez, Sr., after full payment for the property
was received by the PHHC.
2. Neither [petitioners] nor Hernandez, Sr., took
possession of the said property. On the other hand,
the [respondents] took possession of the said property
in 1966 and are in actual and physical possession
thereof up to the present, and have made considerable
improvements thereon, including a residential house
where they presently reside.
3. The Owner’s Duplicate Copy of the title over the
property given by the PHHC to Hernandez, Sr. was in
the possession of Plaridel Mingoa, the latter being able
to facilitate the cancellation of the said title and [the
issuance of] a new TCT xxx in the name of Melanie
Mingoa.
4. The realty taxes have been paid by [respondents],
albeit in the name of Hernandez, Sr., but all official
receipts of tax payments are kept by the
[respondents].
5. From 1966 (the time when the [respondents] were
able to possess the property) to 1983 (the time when
the [petitioners] had knowledge that the TCT in the
name of Hernandez, Sr. had already been cancelled by
the Registry of Deeds of Quezon City) covers almost a
span of 17 years; and from 1983 to 1995 (the time
when the Heirs filed the original action) is a period of
another 12 years.
The SPA31 in favor of Dolores Camisura pertinently states
that the latter is the lawful attorney-in-fact of Domingo B.
Hernandez, Sr., married to Sergia Hernandez, to do and
perform, among others, the following acts and deeds:
1. To sign, execute and acknowledge all such
contracts, deeds or other instruments which may be
required by the People’s Homesite and Housing
Corporation with respect to the purchase of that
certain parcel of land known and designated as Lot No.
15 Block E-89 of the Malaya Avenue Subdivision,
 situated in Quezon City and containing an area of 520
square meters, more or less, which I have acquired
thru the CENTRAL BANK STAFF HOUSING
CORPORATION;
2. To sign, execute and acknowledge all such contracts
or other instruments which may deem necessary or be
required to sign, execute and acknowledge for the
purpose of selling, transferring, conveying, disposing
of or alienating whatever rights I may have over that
parcel of land mentioned above;
x x x.
The Deed of Transfer of Rights, also executed by
32
Hernandez, Sr. in Camisura’s favor, expressly states that the
former, in consideration of the amount of ₱6,500.00,
transfers his rights over the subject property to the latter.
Notably, such deed was simultaneously executed with the
SPA on February 14, 1963.
From the foregoing, the Court cannot but conclude that the
SPA executed by Hernandez, Sr. in respondent Camisura's
favor was, in reality, an alienation involving the subject
property. We particularly note that Hernandez, Sr., aside
from executing said SPA, likewise sold his rights and
interests over the property awarded by the PHHC to
Camisura. The CA committed no error when it ruled:33
x x x Appreciating the case in its entirety, the purported SPA
appear to be merely a grant of authority to Camisura (and
then to Plaridel Mingoa) to sell and dispose of the subject
property as well as a grant of right to purchase the said
property; but in essence, such SPA are disguised deeds of
sale of the property executed in circumventing the retention
period restriction over the said property. Verily, the parties
knew that the land in question could not be alienated in favor
of any third person within one (1) year without the approval
of the PHHC.
Having ruled that the SPA in favor of Camisura was a
contract of sale, the next question is whether or not such
sale was valid.
To constitute a valid contract, the Civil Code requires the
concurrence of the following elements: (1) cause, (2) object,
and (3) consent.
The consent of Domingo Hernandez, Sr. to the contract is
undisputed, thus, the sale of his ½ share in the conjugal
property was valid. With regard to the consent of his wife,
Sergia Hernandez, to the sale involving their conjugal
property, the trial court found that it was lacking because
said wife’s signature on the SPA was falsified. Notably, even
the CA observed that the forgery was so blatant as to be
remarkably noticeable to the naked eye of an ordinary
person. Having compared the questioned signature on the
SPA34 with those of the documents35 bearing the sample
standard signature of Sergia Hernandez, we affirm both
lower courts' findings regarding the forgery.
However, Sergia’s lack of consent to the sale did not render
the transfer of her share invalid.
Petitioners contend that such lack of consent on the part of
Sergia Hernandez rendered the SPAs and the deed of sale
fictitious, hence null and void in accordance with Article
140936 of the Civil Code. Petitioners likewise contend that an
action for the declaration of the non-existence of a contract
under Article 141037 does not prescribe.
We find, after meticulous review of the facts, that Articles
1409 and 1410 are not applicable to the matter now before
us.
It bears stressing that the subject matter herein involves
conjugal property. Said property was awarded to Domingo
Hernandez, Sr. in 1958. The assailed SPAs were executed in
1963 and 1964. Title in the name of Domingo Hernandez, Sr.
covering the subject property was issued on May 23, 1966.
The sale of the property to Melanie Mingoa and the issuance
of a new title in her name happened in 1978. Since all these
events occurred before the Family Code took effect in 1988,
the provisions of the New Civil Code govern these
transactions. We quote the applicable provisions, to wit:
Art. 165. The husband is the administrator of the conjugal
partnership.
Art. 166. Unless the wife has been declared a non compos
mentis or a spendthrift, or is under civil interdiction or is
confined in a leprosarium, the husband cannot alienate or
encumber any real property of the conjugal partnership
without the wife’s consent. If she refuses unreasonably to
give her consent, the court may compel her to grant the
same. x x x.
Art. 173. The wife may, during the marriage, and within
ten years from the transaction questioned, ask the
courts for the annulment of any contract of the husband
entered into without her consent, when such consent is
required, or any act or contract of the husband which tends
to defraud her or impair her interest in the conjugal
partnership property. Should the wife fail to exercise this
right, she or her heirs, after the dissolution of the marriage,
may demand the value of property fraudulently alienated by
the husband. (Emphasis ours.)
Notwithstanding the foregoing, petitioners argue that the
disposition of conjugal property made by a husband without
the wife’s consent is null and void and the right to file an
action thereon is imprescriptible, in accordance with Garcia
v. CA38 and Bucoy v. Paulino.39 .
Concededly, in the aforementioned cases of Garcia and
Bucoy, the contracts involving the sale of conjugal property
by the husband without the wife's consent were declared null
and void by this Court. But even in Bucoy, we significantly
ruled, in reference to Article 173, that:
The plain meaning attached to the plain language of the law
is that the contract, in its entirety, executed by the husband
without the wife’s consent, may be annulled by the
wife.40 (emphasis ours)
In succeeding cases, we held that alienation and/or
encumbrance of conjugal property by the husband without
the wife’s consent is not null and void but merely voidable.
In Sps. Alfredo v. Sps. Borras,41 we held that:
The Family Code, which took effect on 3 August 1988,
provides that any alienation or encumbrance made by the
husband of the conjugal partnership property without the
consent of the wife is void. However, when the sale is made
before the effectivity of the Family Code, the applicable law
is the Civil Code.
Article 173 of the Civil Code provides that the disposition of
conjugal property without the wife's consent is not void but
merely voidable.
We likewise made the same holding in Pelayo v. Perez :42
xxx [Under] Article 173, in relation to Article 166, both of the
New Civil Code, which was still in effect on January 11, 1988
when the deed in question was executed, the lack of marital
consent to the disposition of conjugal property does not
make the contract void ab initio but merely voidable.
In Vera-Cruz v. Calderon,43 the Court noted the state of
jurisprudence and elucidated on the matter, thus:
In the recent case of Heirs of Ignacia Aguilar-Reyes v.
Spouses Mijares, we reiterated the rule that the husband
cannot alienate or encumber any conjugal real property
without the consent, express or implied, of the wife,
otherwise, the contract is voidable. To wit:
Indeed, in several cases the Court has ruled that such
alienation or encumbrance by the husband is void. The better
view, however, is to consider the transaction as merely
voidable and not void. This is consistent with Article 173 of
the Civil Code pursuant to which the wife could, during the
marriage and within 10 years from the questioned
transaction, seek its annulment.
xxx
Likewise, in the case of Heirs of Christina Ayuste v. Court of
Appeals, we declared that:
There is no ambiguity in the wording of the law. A sale of
real property of the conjugal partnership made by the
husband without the consent of his wife is voidable. The
action for annulment must be brought during the marriage
and within ten years from the questioned transaction by the
wife. Where the law speaks in clear and categorical
language, there is no room for interpretation – there is room
only for application.
x x x (Emphasis ours.)
Here, the husband’s first act of disposition of the subject
property occurred in 1963 when he executed the SPA and
the Deed of Transfer of Rights in favor of Dolores Camisura.
Thus, the right of action of the petitioners accrued in 1963,
as Article 173 of the Civil Code provides that the wife may
file for annulment of a contract entered into by the husband
without her consent within ten (10) years from the
transaction questioned. Petitioners filed the action for
reconveyance in 1995. Even if we were to consider that their
right of action arose when they learned of the cancellation of
TCT No. 107534 and the issuance of TCT No. 290121 in
Melanie Mingoa’s name in 1993, still, twelve (12) years have
lapsed since such discovery, and they filed the petition
beyond the period allowed by law. Moreover, when Sergia
Hernandez, together with her children, filed the action for
reconveyance, the conjugal partnership of property with
Hernandez, Sr. had already been terminated by virtue of the
latter's death on April 16, 1983. Clearly, therefore,
petitioners’ action has prescribed.
And this is as it should be, for in the same Vera-Cruz case,
we further held that:44
xxx [Under] Article 173 of the New Civil Code, an action for
the annulment of any contract entered into by the husband
without the wife’s consent must be filed (1) during the
marriage; and (2) within ten years from the transaction
questioned. Where any one of these two conditions is
lacking, the action will be considered as having been
filed out of time.
In the case at bar, while respondent filed her complaint for
annulment of the deed of sale on July 8, 1994, i.e., within
the ten-year period counted from the execution of the deed
of sale of the property on June 3, 1986, the marriage
between her and Avelino had already been dissolved by the
death of the latter on November 20, 1993. In other words,
her marriage to Avelino was no longer subsisting at the time
she filed her complaint. Therefore, the civil case had already
been barred by prescription. (Emphasis ours.)
Thus, the failure of Sergia Hernandez to file with the courts
an action for annulment of the contract during the marriage
and within ten (10) years from the transaction necessarily
barred her from questioning the sale of the subject property
to third persons.
As we held in Vda. De Ramones v. Agbayani:45
In Villaranda v. Villaranda, et al., this Court, through Mr.
Justice Artemio V. Panganiban, ruled that without the wife’s
consent, the husband’s alienation or encumbrance of
conjugal property prior to the effectivity of the Family Code
is not void, but merely voidable. However, the wife’s
failure to file with the courts an action for annulment
of the contract during the marriage and within ten
(10) years from the transaction shall render the sale
valid. x x x (emphasis ours)
More than having merely prescribed, petitioners’ action has
likewise become stale, as it is barred by laches.
In Isabela Colleges v. Heirs of Nieves-Tolentino,46 this Court
held:
Laches means the failure or neglect for an unreasonable and
unexplained length of time to do that which, by observance
of due diligence, could or should have been done earlier. It is
negligence or omission to assert a right within a reasonable
time, warranting the presumption that the party entitled to
assert his right either has abandoned or declined to assert it.
Laches thus operates as a bar in equity.
xxx
The time-honored rule anchored on public policy is that relief
will be denied to a litigant whose claim or demand has
become "stale," or who has acquiesced for an unreasonable
length of time, or who has not been vigilant or who has slept
on his rights either by negligence, folly or inattention. In
other words, public policy requires, for peace of society, the
discouragement of claims grown stale for non-assertion; thus
laches is an impediment to the assertion or enforcement of a
right which has become, under the circumstances,
inequitable or unfair to permit.
Pertinently, in De la Calzada-Cierras v. CA,47 we ruled that a
complaint to recover the title and possession of the lot filed
12 years after the registration of the sale is considered
neglect for an unreasonably long time to assert a right to the
property.
Here, petitioners' unreasonably long period of inaction in
asserting their purported rights over the subject property
weighs heavily against them. We quote with approval the
findings of the CA that:48
It was earlier shown that there existed a period of 17 years
during which time Hernandez, Sr. xxx never even questioned
the defendants-appellants possession of the property; also
there was another interval of 12 years after discovering that
the TCT of the property in the name of Hernandez, Sr. before
the Heirs of Hernandez instituted an action for the
reconveyance of the title of the property.1avvphi1
xxx
The fact that the Mingoa's were able to take actual
possession of the subject property for such a long period
without any form of cognizable protest from Hernandez, Sr.
and the plaintiffs-appellees strongly calls for the application
of the doctrine of laches. It is common practice in the real
estate industry, an ocular inspection of the premises involved
is a safeguard to the cautious and prudent purchaser usually
takes, and should he find out that the land he intends to buy
is occupied by anybody else other than the seller who is not
in actual possession, it could then be incumbent upon the
purchaser to verify the extent of the occupant's possessory
rights. The plaintiffs-appellees asseverate that the award
was made in favor of Hernandez, Sr. in 1958; full payment
made in 1963; and title issued in 1966. It would thus be
contrary to ordinary human conduct (and prudence dictates
otherwise) for any awardee of real property not to visit and
inspect even once, the property awarded to him and find out
if there are any transgressors in his property.
Furthermore, Hernandez, Sr.'s inaction during his lifetime
lends more credence to the defendants-appellants assertion
that the said property was indeed sold by Hernandez, Sr. by
way of the SPAs, albeit without the consent of his wife. xxx
In addition, the reasons of poverty and poor health
submitted by the plaintiffs-appellees could not justify the 12
years of delay in filing a complaint against the defendants-
appellants. The records are bereft of any evidence to support
the idea that the plaintiffs-appellees diligently asserted their
rights over the said property after having knowledge of the
cancellation of the TCT issued in Hernandez name. Moreover
the Court seriously doubts the plausibility of this contention
since what the plaintiffs-appellees are trying to impress on
this Court's mind is that they did not know anything at all
except only shortly before the death of Hernandez. To accept
that not even the wife knew of the transactions made by
Hernandez, Sr. nor anything about the actual possession of
the defendants-appellants for such a long period is to Us
absurd if not fantastic.
In sum, the rights and interests of the spouses Hernandez
over the subject property were validly transferred to
respondent Dolores Camisura. Since the sale of the conjugal
property by Hernandez, Sr. was without the consent of his
wife, Sergia, the same is voidable; thus, binding unless
annulled. Considering that Sergia failed to exercise her right
to ask for the annulment of the sale within the prescribed
period, she is now barred from questioning the validity
thereof. And more so, she is precluded from assailing the
validity of the subsequent transfers from Camisura to Plaridel
Mingoa and from the latter to Melanie Mingoa. Therefore,
title to the subject property cannot anymore be reconveyed
to the petitioners by reason of prescription and laches. The
issues of prescription and laches having been resolved, it is
no longer necessary to discuss the other issues raised in this
petition.
WHEREFORE, the instant petition is DENIED and the assailed
Decision dated September 7, 2000 and Resolution dated
December 29, 2000 of the Court of Appeals are hereby
AFFIRMED.

Costs against the petitioners.

SO ORDERED.
G.R. No. 190995, August 09, 2017 ]
BENJAMIN A. KO, EDUARDO A. KO, ALEXANDER A. KO, MA.
CYNTHIA K. AZADA-CHUA, GARY A. KO, ANTHONY A. KO,
FELIX A. KO, AND DANTON C. KO, PETITIONERS, V.
VIRGINIA DY ARAMBURO, VICKY ARAMBURO, JULY
ARAMBURO, JESUS ARAMBURO, JOSEPHINE ARAMBURO,
MARYJANE ARAMBURO, AUGUSTO ARAMBURO, JR., JAIME
ARAMBURO, JULIET ARAMBURO, JACKSON ARAMBURO,
JOCELYN ARAMBURO, AILEEN ARAMBURO, JUVY
ARAMBURO,CORAZON ROTAIRO ARAMBURO, AND NEIL
VINCENT ARAMBURO, RESPONDENTS.
TIJAM, J.:
This is a Petition for Review on Certiorari[1] under Rule 45,
assailing the Decision[2] dated September 22, 2009 of the
Court of Appeals (CA) in CA-G.R. CV No. 89611, affirming
the Decision dated February 16, 2006 of the Regional Trial
Court (RTC) of Tabaco City, Branch 15, in Civil Case No. T-
1693.
Factual and Procedural Antecedents
Respondent Virginia Dy Aramburo (Virginia) is Corazon
Aramburo Ko's (Corazon) sister-in-law, the former being the
wife of the latter's brother, Simeon Aramburo (Simeon).
Corazon and Simeon have another sibling, Augusto
Aramburo (Augusto), who predeceased them. Virginia's co
respondents herein are the heirs of Augusto, while the
petitioners in the instant case are the heirs of Corazon who
substituted the latter after she died while the case was
pending before the CA.[3]
On November 26, 1993, Virginia, together with her co-
respondents herein, filed a Complaint for Recovery of
Ownership with Declaration of Nullity and/or Alternatively
Reconveyance and Damages with Preliminary Injunction
against Corazon, docketed as Civil Case No. T-1693.[4]
Subject of this case are seven parcels of land located in
Tabaco City, Albay, to wit: (1) Transfer Certificate of Title
(TCT) No. T-41187 with an area of 176,549 square meters,
more or less; (2) TCT No. T-41183 with an area of 217,732
sq m, more or less; (3) TCT No. T-41184 with an area of
39,674 sq m, more or less; (4) TCT No. T-28161 with an
area of 86,585 sq m, more or less; (5) TCT No. T-41186 with
an area of 4,325 sq m, more or less; (6) TCT No. 49818 with
an area of 27,281 sq m, more or less; and (7) TCT No.
49819 with an area of 35,760 sq m, more or less (subject
properties), now all under the name of Corazon.[5]
The complaint alleged that Virginia and her husband Simeon
(Spouses Simeon and Virginia), together with Corazon and
her husband Felix (Spouses Felix and Corazon), acquired the
subject properties from Spouses Eusebio and Epifania Casaul
(Spouses Eusebio and Epifania) through a Deed of Cession
dated April 10, 1970.[6]
On April 13, 1970, Spouses Simeon and Virginia and Spouses
Felix and Corazon executed a Deed of Cession in favor of
Augusto's heirs, subject of which is the one-third pro-
indiviso portion of the subject properties.[7]
However, allegedly with the use of falsified documents,
Corazon was able to have the entire subject properties
transferred exclusively to her name, depriving her co-owners
Virginia and Augusto's heirs of their pro-indiviso share, as
well as in the produce of the same.[8]
For her part, Corazon admitted having acquired the subject
properties through cession from their uncle and auntie,
Spouses Eusebio and Epifania. She, however, intimated that
although the said properties were previously registered
under Spouses Eusebio and Epifania's name, the same were,
in truth, owned by their parents, Spouses Juan and Juliana
Aramburo (Spouses Juan and Juliana). Hence, when her
parents died, Spouses Eusebio and Epifania allegedly merely
returned the said properties to Spouses Juan and Juliana by
ceding the same to their children, Corazon and Simeon. She
further averred that the said properties were ceded only to
her and Simeon, in that, her husband Felix's name and
Virginia's name appearing in the Deed were merely
descriptive of her and Simeon's civil status, being married to
Felix and Virginia, respectively.[9]
Corazon alleged that she and Simeon thought of sharing a
third of the subject properties with the heirs of their brother
Augusto who predeceased them, hence they executed a
Deed of Cession on April 13, 1970 but later on decided to
recall and not implement the same. In fine, thus, Corazon
insisted that only she and Simeon share one-half portion
each of the subject properties. [10]
Corazon further alleged that on December 14, 1974, Simeon
sold and conveyed his entire one-half share in the co-owned
properties in her favor. Hence, Corazon became the sole
owner thereof and consequently, was able to transfer the
titles of the same to her name. Corazon argued that the
subject properties belong to Simeon's exclusive property,
hence, Virginia's conformity to such sale was not
necessary.[11]
Corazon also raised in her Answer to the complaint, that
respondents' action was barred by prescription.[12]
Ruling of the RTC
During trial, it was established that Simeon and Virginia's
marriage had been on bad terms. In fact, since February 4,
1973 Simeon and Virginia had lived separately. Simeon lived
with his sister Corazon in Tabaco City, Albay, while Virginia
and their children lived in Paco, Manila. From these
circumstances, the trial court deduced that it is highly
suspicious that thereafter, Virginia would sign a deed of sale,
consenting to her husband's decision to sell their conjugal
assets to Corazon. Virginia vehemently disowned the
signature appearing in the December 14, 1974 Deed of
Absolute Sale. Verily, the National Bureau of Investigation
(NBI) examination report concluded that the questioned
signature and the specimen signatures of Virginia were not
written by one and the same person and thus, the former is
a forgery. [13]
Without the conformity of Virginia, according to the trial
court, Simeon cannot alienate or encumber any real property
of the conjugal partnership.[14]
The trial court concluded, thus, that the December 14, 1974
Deed of Absolute Sale, being falsified, is not a valid
instrument to transfer the one third share of the subject
properties.[15]
The trial court also did not accept Corazon's allegation that
the April 13, 1970 Deed of Cession in favor of Augusto's
heirs as to the other one third portion of the subject
properties, was cancelled and not implemented. The trial
court noted Corazon's testimony during trial that she was
merely administering the said portion for Augusto's heirs, her
nephews and nieces, who were still minors at that time.[16]
On February 16, 2006, the trial court rendered a Decision in
favor of herein respondents, thus:
WHEREFORE, foregoing premises considered, judgment is
hereby rendered in favor of the plaintiffs:
(1)Declaring the plaintiffs Virginia Dy-Arambulo and Vicky
 Aramburo-Lee together with the interested parties the
owner of ONE-THIRD (1/3) portion of the property subject
mater of this case;
Declaring the co-plaintiffs (heirs of Augusto Aramburo)
(2)likewise the owners of One-third (1/3) portion of the
property subject matter of this case;
Ordering the Cancellation of [TCT] Nos. T-41187,T-41183,
T-41184, T-41185, T-41186, T-48918[4] [sic] and T-
49819 and another ones issued upon proper steps taken
(3)in the names of the plaintiffs and interested parties; and
the other plaintiffs, Heirs of Augusto Aramburo, conferring
ownership over TWO-THIRDS (2/3) PORTION of the
properties subject matter of this case;
Ordering the defendant to reimburse the plaintiffs TWO-
THIRDS (2/3) of the produce of the properties, subject
(4)matter of this case from the time she appropriated it to
herself in 1974 until such time as the 2/3 share are duly
delivered to them; and
Ordering the defendant to pay plaintiffs by way of
(5)damages the amount of Fifty Thousand (P50,000.00) as
attorney's fees; and
(6)To pay the cost of suit.
SO ORDERED.[17]
Ruling of the CA
On appeal, Corazon maintained that the subject properties
are not part of Spouses Simeon and Virginia's conjugal
properties. This, according to her, is bolstered by the fact
that the subject properties are not included in the case for
dissolution of conjugal partnership docketed as Special
Proceeding No. 67, and in the separation of properties case
docketed as Civil Case No. T-1032 between Simeon and
Virginia.[18]
Respondents argued otherwise. Particularly, Virginia insisted
that only a third portion of the subject properties is owned
by Simeon and that the same is conjugally-owned by her and
Simeon since it was acquired during their marriage. As such,
the disposition by Simeon of the one-half portion of the
subject properties in favor of Corazon is not only void but
also fictitious not only because Simeon does not own the said
one-half portion, but also because Virginia's purported
signature in the December 14, 1974 Deed of Absolute Sale
as the vendor's wife was a forgery as found by the NBI,
which was upheld by the trial court.[19]
In its September 22, 2009 assailed Decision,[20] the CA
affirmed the trial court's findings and conclusion in its
entirety, thus:
WHEREFORE, the present appeal is DISMISSED.
Consequently, the Decision of the [RTC], Branch 15, Tabaco
City, in Civil Case No. T-1693 is hereby AFFIRMED in toto.
SO ORDERED.[21]
Petitioners then, substituting deceased Corazon, filed a
Motion for Reconsideration,[22] which was likewise denied by
the CA in its Resolution[23] dated January 13, 2010:
WHEREFORE, there being no cogent reason for US to depart
from Our assailed Decision, WE hereby DENY the Motion for
Partial Reconsideration.
SO ORDERED.[24]
Hence, this petition.
Issue
Did the CA correctly sustain the RTC decision, declaring the
parties as co-owners of the subject properties? In the
affirmative, may the subject titles be nullified and transferred
to the parties as to their respective portions?
This Court's Ruling
The petition is partly meritorious.
At the outset, let it be stated that the law which governs the
instant case is the Old Civil Code, not the Family Code, as
the circumstances of this case all occurred before the
effectivity of the Family Code on August 3, 1988.
Proceeding, thus, to the issue of ownership, We find no
reason to depart from the RTC's ruling as affirmed by the CA.
Augusto's heirs own one-
third pro-indiviso share in
the subject properties
Respondents' (Augusto's heirs) claim concerning one-third of
the subject properties, is anchored upon the April 13, 1970
Deed of Cession executed by Spouses Felix and Corazon and
Spouses Simeon and Virginia in favor of Augusto's children.
Petitioners, however, maintain that the said deed was never
given effect as it was recalled by the said spouses.
The courts a quo found that the said deed, ceding a third of
the subject properties to Augusto's heirs, was in fact
implemented as evidenced by Corazon's testimony that she
was merely administering the said properties for Augusto's
heirs as her nephews and nieces were still minors at that
time.
We find no cogent reason to depart from the the courts a
quo's findings as to the existence and effectivity of the April
13, 1970 Deed of Cession giving rights to Augusto's children
over the one-third portion of the subject property. For one,
basic is the rule that factual findings of the trial court,
especially if affirmed by the appellate court, are binding and
conclusive upon this Court absent any clear showing of
abuse, arbitrariness, or capriciousness committed by the trial
court.[25] In addition, We are not convinced of Corazon's bare
assertion that the said document was cancelled merely
because she and her brother . Simeon decided not to
implement it anymore. Moreover, as can be gleaned from the
testimony of respondent July Aramburo, one of Augusto's
heirs, which was notably quoted by the petitioners in this
petition, it is clear that he, together with his co-heirs, are co-
owners of the subject properties along with Spouses Simeon
and Virginia and Spouses Felix and Corazon, by virtue of the
Deed of Cession executed in their favor. The said testimony
clearly stated that Simeon was also merely administering the
subject properties.[26]
Simeon's heirs, which
include Virginia, also own
one-third pro-indiviso
share in the subject
properties
Respondent Virginia's claim as to the other one-third portion
of the subject properties is ultimately anchored upon the
April 10, 1970 Deed of Cession. Corazon, however,
countered that inasmuch as her husband Felix's name in the
said Deed of Cession was merely descriptive of her status as
being married to the latter, Virginia's name likewise
appeared in the said Deed of Cession merely to describe
Simeon's status as being married to Virginia. In fine,
Corazon argued that the properties subject of the said Deed
were given exclusively to her and Simeon. Consequently, the
one-half portion thereof pertains to Simeon's exclusive
property and does not belong to Simeon and Virginia's
conjugal property. This, according to Corazon, was bolstered
by the fact that Simeon's share in the subject properties was
not included in the petition for separation of properties
between Virginia and Simeon. Petitioners maintain this
argument.
We uphold the courts a quo's conclusion that one-third
portion of the subject properties is indeed part of Simeon
and Virginia's conjugal properties.
It is undisputed that the subject properties were originally
registered in the name of Spouses Eusebio and Epifania. It is
also undisputed that in a Deed of Cession dated April 10,
1970, these parcels of land were ceded to Spouses Felix and
Corazon, and Spouses Simeon and Virginia. There is likewise
no question that the subject properties were ceded to the
said spouses during Spouses Simeon and Virginia's marriage.
Article 160 of the Old Civil Code, which is the applicable
provision since the property was acquired prior to the
enactment of the Family Code as stated above, provides that
"all property of the marriage is presumed to belong to the
conjugal partnership, unless it be proved that it pertains
exclusively to the husband or to the wife."[27] This
presumption in favor of conjugality is rebuttable, but only
with a strong, clear and convincing evidence; there must be
a strict proof of exclusive ownership of one of the
spouses,[28] and the burden of proof rests upon the party
asserting it.[29]
Thus, in this case, the subject properties, having been
acquired during the marriage, are still presumed to belong to
Simeon and Virginia's conjugal properties.
Unfortunately, Corazon, or the petitioners for that matter,
failed to adduce ample evidence that would convince this
Court of the exclusive character of the properties.
Petitioners' argument that Virginia's name was merely
descriptive of Simeon's civil status is untenable. It bears
stressing that if proof obtains on the acquisition of the
property during the existence of the marriage, as in this
case, then the presumption of conjugal ownership remains
unless a strong, clear and convincing proof was presented to
prove otherwise. In fact, even the registration of a property
in the name of one spouse does not destroy its conjugal
nature. What is material is the time when the property was
acquired.[30]
We also give scant consideration on petitioners' bare
allegation that the subject properties were actually from the
estate of Simeon and Corazon's parents, intimating that the
same were inherited by Simeon and Corazon, hence,
considered their exclusive properties. The records are bereft
of any proof that will show that the subject properties indeed
belonged to Simeon and Corazon's parents. Again, what is
established is that the subject properties were originally
registered under Spouses Eusebio and Epifania's name and
thus, ceded by the latter. Petitioners' bare allegation on the
matter is so inadequate for the Court to reach a conclusion
that the acquisition of the subject properties was in a nature
of inheritance than a cession.
Likewise, the fact that the subject properties were not
included in the cases for separation of properties between
Simeon and Virginia does not, in any way, prove that the
same are not part of Simeon and Virginia's conjugal
properties. Such fact cannot be considered as a strong, clear
and convincing proof that the said properties exclusively
belong to Simeon. Besides, We note respondents' allegation
in their Comment to this petition that the case for separation
of properties between Simeon and Virginia was not resolved
by the trial court on the merits as Simeon died during the
pendency thereof, and also because there was actually a
disagreement as to the inventory the properties included
therein. This could mean that precisely, other properties may
be part of the said spouses' conjugal properties and were not
included in the said case. Notably, such allegation was not
denied by the petitioners.
At any rate, the question of whether petitioners were able to
adduce proof to overthrow the presumption of conjugality is
a factual issue best addressed by the trial court. It cannot be
over-emphasized that factual determinations of the trial
courts, especially when confirmed by the appellate court, are
accorded great weight by the Court and, as a rule, will not be
disturbed on appeal, except for the most compelling reasons,
which We do not find in the case at bar.[31]
Simeon could not have
validly sold the one-third
share of Augusto's heirs,
as well as the one-third
portion of his and
Virginia's conjugal share
without the latter's
consent, to Corazon
We now proceed to determine the validity of the December
14, 1974 Deed of Absolute Sale executed by Simeon in favor
of Corazon, covering one-half of the subject properties which
was his purported share.
As for the one-third portion of the subject properties
pertaining to Augusto's heirs, We are one with the CA in
ruling that the Deed of Absolute Sale is void as the said
portion is owned by Augusto's heirs as above-discussed and
thus, Simeon had no right to sell the same. It is basic that
the object of a valid sales contract must be owned by the
seller.[32] Nemo dat quod non habet, as an ancient Latin
maxim says. One cannot give what one does not have.[33]
However, as to the one-third portion commonly-owned by
Spouses Simeon and Virginia, Simeon's alienation of the
same through sale without Virginia's conformity is merely
voidable.
Article 166[34] of the Old Civil Code explicitly requires the
consent of the wife before the husband may alienate or
encumber any real property of the conjugal partnership
except when there is a showing that the wife is
incapacitated, under civil interdiction, or in like situations.
In this case, Virginia vehemently denies having conformed to
the December 14, 1974 sale in favor of Corazon. In fact,
during trial, it has already been satisfactorily proven, through
the NBI's findings as upheld by the trial court, that Virginia's
signature appearing on the said Deed of Absolute Sale is a
forgery. Concedingly, a finding of forgery does not depend
entirely on the testimonies of handwriting experts as even
this Court may conduct an independent examination of the
questioned signature in order to arrive at a reasonable
conclusion as to its authenticity. We, however, do not have
any means to evaluate the questioned signature in this case
as even the questioned Deed of Absolute Sale is not available
in the records before Us. Hence, We are constrained to the
general rule that the factual findings of the RTC as affirmed
by the CA should not be disturbed by this Court unless there
is a compelling reason to deviate therefrom.
In addition, as correctly observed by the courts a quo, We
cannot turn a blind eye on the circumstances surrounding
the execution of the said Deed of Absolute Sale. The CA,
quoting the RTC, held thus:
[T]he dubiety of its execution at a time that [Virginia] and
her husband's marital relationship was already stale is not to
be taken for granted. It is a fact that [Virginia] had lived
separately from bed and board with her husband [Simeon]
as of February 4, 1973. It is, therefore, highly suspicious
that [later on], x x x she would consent to her husband's
decision selling their conjugal assets to [Corazon]. Precisely,
her signature appearing in said Deed of Absolute Sale dated
December 14, 1974 x x x is being disowned by her as being
a forgery. Undoubtedly, the NBI Examination report anent
this x x x conducted by Sr. Document Examiner Rhoda B.
Flores gave the conclusion that the questioned and the
standard/sample signatures of "[Virginia]" was not written by
one and the same person. x x x.[35]
The CA also correctly observed that the forgery, as found by
the RTC, is evident from the admitted fact of strained marital
relationship between Simeon and Virginia and the fact that at
the time the question Deed of Absolute Sale was executed,
Simeon had been living with Corazon in Tabaco City, Albay,
while Virginia and her children were living in Paco, Manila.[36]
Accordingly, without Virginia's conformity, the Deed of
Absolute Sale executed on December 14, 1974 between
Simeon and Corazon purportedly covering one-half of the
subject properties is voidable.
As for Augusto's heirs, the
action to nullify the sale of
their share, being void is
imprescriptible; as for
Virginia, the action to
nullify the sale of her
share, being merely
voidable, is susceptible to
prescription
At this juncture, We differ from the CA's pronouncement that
since the deed of sale involved is a void contract, the action
to nullify the same is imprescriptible.
We qualify.
For the share of Augusto's heirs sold by Simeon in the
December 14, 1974 Deed of Absolute Sale, the sale of the
same is void as the object of such sale, not being owned by
the seller, did not exist at the time of the
transaction.[37] Being a void contract, thus, the CA correctly
ruled that the action to impugn the sale of the same is
imprescriptible pursuant to Article 1410[38] of the New Civil
Code (NCC).
As for the share pertaining to Simeon and Virginia, We must
emphasize that the governing law in this case is the Old Civil
Code. Under the said law, while the husband is prohibited
from selling the commonly-owned real property without his
wife's consent, still, such sale is not void but merely
voidable.[39] Article 173 thereof gave Virginia the right to
have the sale annulled during the marriage within ten years
from the date of the sale. Failing in that, she or her heirs
may demand, after dissolution of the marriage, only the
value of the property that Simeon erroneously sold.[40] Thus:
Art. 173. The wife may, during the marriage, and within ten
years from the transaction questioned, ask the courts for the
annulment of any contract of the husband entered into
without her consent, when such consent is required, or any
act or contract of the husband which tends to defraud her or
impair her interest in the conjugal partnership property.
Should the wife fail to exercise this right, she or her heirs,
after the dissolution of the marriage, may demand the value
of property fraudulently alienated by the husband.
In contrast, the Family Code does not provide a period within
which the wife who gave no consent may assail her
husband's sale of real property. It simply provides that
without the other spouse's written consent or a court order
allowing the sale, the same would be void.[41]Thus, the
provisions of the NCC governing contracts is applied as
regards the issue on prescription. Under the NCC, a void or respondents. While Augusto's heirs are entitled to the
inexistent contract has no force and effect from the very recovery of their share in the subject properties, Virginia is
beginning, and this rule applies to contracts that are declared only entitled to demand the value of her share therefrom
void by positive provision of law as in the case of a sale of pursuant to Article 173 of the Old Civil Code above-cited.
conjugal property without the other spouse's written
WHEREFORE, premises considered, the petition is PARTLY
consent.[42] Under Article 1410 of the NCC, the action or
GRANTED. The Decision dated September 22, 2009 of the
defense for the declaration of the inexistence of a contract
Court of Appeals in CA-G.R. CV No. 89611, affirming the
does not prescribe.
Decision dated February 16, 2006 of the Regional Trial Court
As this case, as far as Virginia is concerned, falls under the of Tabaco City, Branch 15, in Civil Case No. T-1693 is
provisions of the Old Civil Code, the CA erred in ruling that hereby AFFIRMED in all aspects EXCEPT insofar as it
the subject Deed of Absolute Sale is void for the lack of the ordered the cancellation of the titles of the entire subject
wife's conformity thereto and thus, applying Article 1410 of properties.
the NCC stating that the action to question a void contract is
Accordingly, petitioners Heirs of Corazon Aramburo Ko,
imprescriptible. Again, Simeon's sale of their conjugal
respondents Virginia Dy Aramburo and all persons claiming
property without his wife's conformity under the Old Civil
under her, as Heirs of Simeon Aramburo, and respondents
Code is merely voidable not void. The imprescriptibility of an
Heirs of Augusto Aramburo are deemed co-owners pro-
action assailing a void contract under Article 1410 of the
indiviso of the subject properties in equal one-third (1/3)
NCC, thus, does not apply in such case. The 10-year
share. As such, the titles over the subject properties
prescriptive period under Article 173 of the Old Civil Code,
are ORDERED cancelled insofar as the heirs of Augusto
therefore, should be applied in this case.
Aramburo's share is concerned. Virginia Dy Aramburo and all
Here, the invalid sale was executed on December 14, 1974 persons claiming under her have the right to demand for the
while the action questioning the same was filed in 1993, value of their one-third (1/3) share in a proper case.
which is clearly way beyond the 10-year period prescribed
SO ORDERED.
under Article 173 of the Old Civil Code. Virginia's recourse is,
therefore, to demand only the value of the property, i.e., the
one-third portion of the subject properties invalidly sold by
Simeon without Virginia's conformity pursuant to the same
provision.

In fine, while We uphold the courts a quo's findings that the

parties herein are co-owners of the subject properties, We
reverse and set aside the said courts' ruling, ordering the
cancellation of titles of the entire subject properties and the
transfer of the two-thirds portion of the same to the
 G.R. No. 125172 June 26, 1998
Spouses ANTONIO and LUZVIMINDA
GUIANG, Petitioners, vs. COURT OF APPEALS and GILDA
COPUZ, Respondents.
PANGANIBAN, J.:
The sale of a conjugal property requires the consent of both
the husband and the wife. The absence of the consent of one
renders the sale null and void, while the vitiation thereof
makes it merely voidable. Only in the latter case can
ratification cure the defect.
The Case
These were the principles that guided the Court in deciding
this petition for review of the Decision 1 dated January 30,
1996 and the Resolution 2 dated May 28, 1996, promulgated
by the Court of Appeals in CA-GR CV No. 41758, affirming
the Decision of the lower court and denying reconsideration,
respectively.
On May 28, 1990, Private Respondent Gilda Corpuz filed an
Amended Complainant 3 against her husband Judie Corpuz
and Petitioner-Spouses Antonio and Luzviminda Guiang. The
said Complaint sought the declaration of a certain deed of
sale, which involved the conjugal property of private
respondent and her husband, null and void. The case was
raffled to the Regional Trial Court of Koronadal, South
Cotabato, Branch 25. In due course, the trial court rendered
a Decision 4 dated September 9, 1992, disposing as follow: 5
ACCORDINGLY, judgment is rendered for the plaintiff and
against the defendants,
1. Declaring both the Deed of Transfer of Rights dated March
1, 1990 (Exh. "A") and the "amicable settlement" dated
March 16, 1990 (Exh. "B") as null void and of no effect;
2. Recognizing as lawful and valid the ownership and
possession of plaintiff Gilda Corpuz over the remaining one-
half portion of Lot 9, Block 8, (LRC) Psd-165409 which has
been the subject of the Deed of Transfer of Rights (Exh.
"A");
3. Ordering plaintiff Gilda Corpuz to reimburse defendants
Luzviminda Guiang the amount of NINE THOUSAND
(P9,000.00) PESOS corresponding to the payment made by
defendants Guiangs to Manuel Callejo for the unpaid balance
of the account of plaintiff in favor of Manuel Callejo, and
another sum of P379.62 representing one-half of the amount
of realty taxes paid by defendants Guiangs on Lot 9, Block 8,
(LRC) Psd-165409, both with legal interests thereon
computed from the finality of the decision.
No pronouncement as to costs in view of the factual
circumstances of the case.
Dissatisfied, petitioners-spouses filed an appeal with the
Court of Appeals. Respondent Court, in its challenged
Decision, ruled as follow: 6
WHEREFORE, the appealed of the lower court in Civil Case
No. 204 is hereby AFFIRMED by this Court. No costs
considering plaintiff-appellee's failure to file her brief despite
notice.
Reconsideration was similarly denied by the same court in its
assailed Resolution: 7
Finding that the issues raised in defendants-appellants
motion for reconsideration of Our decision in this case of
January 30, 1996, to be a mere rehash of the same issues
which we have already passed upon in the said decision, and
there [being] no cogent reason to disturb the same, this
Court RESOLVED to DENY the instant motion for
reconsideration for lack of merit.
The Facts
The facts of this case are simple. Over the objection of
private respondent and while she was in Manila seeking
employment, her husband sold to the petitioners-spouses
one half of their conjugal peoperty, consisting of their
residence and the lot on which it stood. The circumstances of
this sale are set forth in the Decision of Respondent Court,
which quoted from the Decision of the trial court as follows: 8
1. Plaintiff Gilda Corpuz and defendant Judie Corpuz are
legally married spouses. They were married on December
24, 1968 in Bacolod City, before a judge. This is admitted by
defendants-spouses Antonio and Luzviminda Guiang in their
answer, and also admitted by defendant Judie Corpuz when
he testified in court (tsn. p. 3, June 9, 1992), although the
latter says that they were married in 1967. The couple have
three children, namely: Junie - 18 years old, Harriet - 17
years of age, and Jodie or Joji, the youngest, who was 15
years of age in August, 1990 when her mother testified in
court.
Sometime on February 14, 1983, the couple Gilda and Judie
Corpuz, with plaintiff-wife Gilda Corpuz as vendee, bought a
421 sq. meter lot located in Barangay Gen. Paulino Santos
(Bo. 1), Koronadal, South Cotabato, and particularly known
as Lot 9, Block 8, (LRC) Psd-165409 from Manuel Callejo
who signed as vendor through a conditional deed of sale for
a total consideration of P14,735.00. The consideration was
payable in installment, with right of cancellation in favor of
vendor should vendee fail to pay three successive
installments (Exh. "2", tsn p. 6, February 14, 1990).
2. Sometime on April 22, 1988, the couple Gilda and Judie
Corpuz sold one-half portion of their Lot No. 9, Block 8,
(LRC) Psd-165409 to the defendants-spouses Antonio and
Luzviminda Guiang. The latter have since then occupied the
one-half portion [and] built their house thereon (tsn. p. 4,
May 22, 1992). They are thus adjoining neighbors of the
Corpuzes.
3. Plaintiff Gilda Corpuz left for Manila sometime in June
1989. She was trying to look for work abroad, in [the] Middle
East. Unfortunately, she became a victim of an unscrupulous
illegal recruiter. She was not able to go abroad. She stayed
for sometime in Manila however, coming back to Koronadal,
South Cotabato, . . . on March 11, 1990. Plaintiff's departure
for Manila to look for work in the Middle East was with the
consent of her husband Judie Corpuz (tsn. p. 16, Aug. 12,
1990; p. 10 Sept. 6, 1991).
After his wife's departure for Manila, defendant Judie Corpuz
seldom went home to the conjugal dwelling. He stayed most
of the time at his place of work at Samahang Nayon Building,
a hotel, restaurant, and a cooperative. Daughter Herriet
Corpuz went to school at King's College, Bo. 1, Koronadal,
South Cotabato, but she was at the same time working as
household help of, and staying at, the house of Mr. Panes.
Her brother Junie was not working. Her younger sister Jodie
(Jojie) was going to school. Her mother sometimes sent
them money (tsn. p. 14, Sept. 6, 1991.)
Sometime in January 1990, Harriet Corpuz learned that her
father intended to sell the remaining one-half portion
including their house, of their homelot to defendants
Guiangs. She wrote a letter to her mother informing her. She
[Gilda Corpuz] replied that she was objecting to the sale.
Harriet, however, did not inform her father about this; but
instead gave the letter to Mrs. Luzviminda Guiang so that
she [Guiang] would advise her father (tsn. pp. 16-17, Sept.
6, 1991).
4. However, in the absence of his wife Gilda Corpuz,
defendant Judie Corpuz pushed through the sale of the
remaining one-half portion of Lot 9, Block 8, (LRC) Psd-
165409. On March 1, 1990, he sold to defendant Luzviminda
Guiang thru a document known as "Deed of Transfer of
Rights" (Exh. "A") the remaining one-half portion of their lot
and the house standing thereon for a total consideration of
P30,000.00 of which P5,000.00 was to be paid in June, 1990.
Transferor Judie Corpuz's children Junie and Harriet signed
the document as witness.
Four (4) days after March 1, 1990 or on March 5, 1990,
obviously to cure whatever defect in defendant Judie
Corpuz's title over the lot transferred, defendant Luzviminda
Guiang as vendee executed another agreement over Lot 9,
Block 8, (LRC) Psd-165408 (Exh. "3"), this time with
Manuela Jimenez Callejo, a widow of the original registered
owner from whom the couple Judie and Gilda Corpuz
originally bought the lot (Exh. "2"), who signed as vendor for
a consideration of P9,000.00. Defendant Judie Corpuz signed
as a witness to the sale (Exh. "3-A"). The new sale (Exh. "3")
describes the lot sold as Lot 8, Block 9, (LRC) Psd-165408
but it is obvious from the mass of evidence that the correct
lot is Lot 8, Block 9, (LRC) Psd-165409, the very lot earlier
sold to the couple Gilda and Judie Corpuz.
5. Sometimes on March 11, 1990, plaintiff returned home.
She found her children staying with other households. Only
Junie was staying in their house. Harriet and Joji were with
Mr. Panes. Gilda gathered her children together and stayed
at their house. Her husband was nowhere to be found. She
was informed by her children that their father had a wife
already.
6. For staying in their house sold by her husband, plaintiff
was complained against by defendant Luzviminda Guiang
and her husband Antonio Guiang before the Barangay
authorities of Barangay General Paulino Santos (Bo. 1),
Koronadal, South Cotabato, for trespassing (tsn. p. 34, Aug.
17, 1990). The case was docketed by the barangay
authorities as Barangay Case No. 38 for "trespassing". On
March 16, 1990, the parties thereat signed a document
known as "amicable settlement". In full, the settlement
provides for, to wit:
That respondent, Mrs. Gilda Corpuz and her three children,
namely: Junie, Hariet and Judie to leave voluntarily the
house of Mr. and Mrs. Antonio Guiang, where they are
presently boarding without any charge, on or before April 7,
1990.
FAIL NOT UNDER THE PENALTY OF THE LAW.
Believing that she had received the shorter end of the
bargain, plaintiff to the Barangay Captain of Barangay
Paulino Santos to question her signature on the amicable
settlement. She was referred however to the Office-In-
Charge at the time, a certain Mr. de la Cruz. The latter in
turn told her that he could not do anything on the matter
(tsn. p. 31, Aug. 17, 1990).
This particular point not rebutted. The Barangay Captain who
testified did not deny that Mrs. Gilda Corpuz approached him
for the annulment of the settlement. He merely said he
forgot whether Mrs. Corpuz had approached him (tsn. p. 13,
Sept. 26, 1990). We thus conclude that Mrs. Corpuz really
approached the Barangay Captain for the annulment of the
settlement. Annulment not having been made, plaintiff
stayed put in her house and lot.
7. Defendant-spouses Guiang followed thru the amicable
settlement with a motion for the execution of the amicable
settlement, filing the same with the Municipal Trial Court of
Koronadal, South Cotabato. The proceedings [are] still
pending before the said court, with the filing of the instant
suit.
8. As a consequence of the sale, the spouses Guiang spent
P600.00 for the preparation of the Deed of Transfer of
Rights, Exh. "A", P9,000.00 as the amount they paid to Mrs.
Manuela Callejo, having assumed the remaining obligation of
the Corpuzes to Mrs. Callejo (Exh. "3"); P100.00 for the
preparation of Exhibit "3"; a total of P759.62 basic tax and
special education fund on the lot; P127.50 as the total
documentary stamp tax on the various documents; P535.72
for the capital gains tax; P22.50 as transfer tax; a standard
fee of P17.00; certification fee of P5.00. These expenses
particularly the taxes and other expenses towards the
transfer of the title to the spouses Guiangs were incurred for
the whole Lot 9, Block 8, (LRC) Psd-165409.
Ruling of Respondent Court
Respondent Court found no reversible error in the trial
court's ruling that any alienation or encumbrance by the
husband of the conjugal propety without the consent of his
wife is null and void as provided under Article 124 of the
Family Code. It also rejected petitioners' contention that the
"amicable sttlement" ratified said sale, citing Article 1409 of
the Code which expressly bars ratification of the contracts
specified therein, particularly those "prohibited or declared
void by law."
Hence, this petition. 9
The Issues
In their Memorandum, petitioners assign to public
respondent the following errors: 10
I
Whether or not the assailed Deed of Transfer of Rights was
validly executed.
II
Whether or not the Cour of Appeals erred in not declairing as
voidable contract under Art. 1390 of the Civil Code the
impugned Deed of Transfer of Rights which was validly
ratified thru the execution of the "amicable settlement" by
the contending parties.
III
Whether or not the Court of Appeals erred in not setting
aside the findings of the Court a quo which recognized as
lawful and valid the ownership and possession of private
respondent over the remaining one half (1/2) portion of the
properly.
In a nutshell, petitioners-spouses contend that (1) the
contract of sale (Deed of Transfer of Rights) was merely
voidable, and (2) such contract was ratified by private
respondent when she entered into an amicable sttlement
with them.
This Court's Ruling
The petition is bereft of merit.
First Issue: Void or Voidable Contract?
Petitioners insist that the questioned Deed of Transfer of
Rights was validly executed by the parties-litigants in good
faith and for valuable consideration. The absence of private
respondent's consent merely rendered the Deed voidable
under Article 1390 of the Civil Code, which provides:
Art. 1390. The following contracts are voidable or annullable,
even though there may have been no damage to the
contracting parties:
xxx xxx xxx
(2) Those where the consent is vitiated by mistake, violence,
intimidation, undue influence or fraud.
These contracts are binding, unless they are annulled by a
proper action in court. They are susceptible of ratification.(n)
The error in petitioners' contention is evident. Article 1390,
par. 2, refers to contracts visited by vices of consent, i.e.,
contracts which were entered into by a person whose
consent was obtained and vitiated through mistake, violence,
intimidation, undue influence or fraud. In this instance,
private respondent's consent to the contract of sale of their
conjugal property was totally inexistent or absent. Gilda
Corpuz, on direct examination, testified thus: 11
Q Now, on March 1, 1990, could you still recall where you
were?
A I was still in Manila during that time.
xxx xxx xxx
ATTY. FUENTES:
Q When did you come back to Koronadal, South Cotabato?
A That was on March 11, 1990, Ma'am.
Q Now, when you arrived at Koronadal, was there any
problem which arose concerning the ownership of your
residential house at Callejo Subdivision?
A When I arrived here in Koronadal, there was a problem
which arose regarding my residential house and lot because
it was sold by my husband without my knowledge.
This being the case, said contract properly falls within the
ambit of Article 124 of the Family Code, which was correctly
applied by the teo lower court:
Art. 124. The administration and enjoyment of the conjugal
partnerhip properly shall belong to both spouses jointly. In
case of disgreement, the husband's decision shall prevail,
subject recourse to the court by the wife for proper remedy,
which must be availed of within five years from the date of
the contract implementing such decision.
In the event that one spouse is incapacitated or otherwise
unable to participate in the administration of the conjugal
properties, the other spouse may assume sole powers of
administration. These powers do not include the powers of
disposition or encumbrance which must have the authority of
the court or the written consent of the other spouse. In the
absence of such authority or consent, the disposition or
encumbrance shall be void. However, the transaction shall be
construed as a continuing offer on the part of the consenting
spouse and the third person, and may be perfected as a
binding contract upon the acceptance by the other spouse or
authorization by the court before the offer is withdrawn by
either or both offerors. (165a) (Emphasis supplied)
Comparing said law with its equivalent provision in the Civil
Code, the trial court adroitly explained the amendatory effect
of the above provision in this wise: 12
The legal provision is clear. The disposition or encumbrance
is void. It becomes still clearer if we compare the same with
the equivalent provision of the Civil Code of the Philippines.
Under Article 166 of the Civil Code, the husband cannot
generally alienate or encumber any real property of the
conjugal partnershit without the wife's consent. The
alienation or encumbrance if so made however is not null
and void. It is merely voidable. The offended wife may bring
an action to annul the said alienation or encumbrance. Thus
the provision of Article 173 of the Civil Code of the
Philippines, to wit:
Art. 173. The wife may, during the marriage and within ten
years from the transaction questioned, ask the courts for the
annulment of any contract of the husband entered into
without her consent, when such consent is required, or any
act or contract of the husband which tends to defraud her or
impair her interest in the conjugal partnership property.
Should the wife fail to exercise this right, she or her heirs
after the dissolution of the marriage, may demand the value
of property fraudulently alienated by the husband.(n)
This particular provision giving the wife ten (10) years . . .
during [the] marriage to annul the alienation or
encumbrance was not carried over to the Family Code. It is
thus clear that any alienation or encumbrance made after
August 3, 1988 when the Family Code took effect by the
husband of the conjugal partnership property without the
consent of the wife is null and void.
Furthermore, it must be noted that the fraud and the
intimidation referred to by petitioners were perpetrated in
the execution of the document embodying the amicable
settlement. Gilda Corpuz alleged during trial that barangay
authorities made her sign said document through
misrepresentation and
coercion. 13 In any event, its execution does not alter the
void character of the deed of sale between the husband and
the petitioners-spouses, as will be discussed later. The fact
remains that such contract was entered into without the
wife's consent.
In sum, the nullity of the contract of sale is premised on the
absence of private respondent's consent. To constitute a
valid contract, the Civil Code requires the concurrence of the
following elements: (1) cause, (2) object, and (3)
consent, 14 the last element being indubitably absent in the
case at bar.
 Second Issue: Amicable Settlement
Insisting that the contract of sale was merely voidable,
petitioners aver that it was duly ratified by the contending
parties through the "amicable settlement" they executed on
March 16, 1990 in Barangay Case No. 38.
The position is not well taken. The trial and the appellate
courts have resolved this issue in favor of the private
respondent. The trial court correctly held: 15
By the specific provision of the law [Art. 1390, Civil Code]
therefore, the Deed to Transfer of Rights (Exh. "A") cannot
be ratified, even by an "amicable settlement". The
participation by some barangay authorities in the "amicable
settlement" cannot otherwise validate an invalid act.
Moreover, it cannot be denied that the "amicable settlement
(Exh. "B") entered into by plaintiff Gilda Corpuz and
defendent spouses Guiang is a contract. It is a direct
offshoot of the Deed of Transfer of Rights (Exh. "A"). By
express provision of law, such a contract is also void. Thus,
the legal provision, to wit:
parties, following the last sentence of Article 124. The order
of the pertinent events is clear: after the sale, petitioners
filed a complaint for trespassing against private respondent,
after which the barangay authorities secured an "amicable
settlement" and petitioners filed before the MTC a motion for
its execution. The settlement, however, does not mention a
continuing offer to sell the property or an acceptance of such
a continuing offer. Its tenor was to the effect that private
respondent would vacate the property. By no stretch of the
imagination, can the Court interpret this document as the
acceptance mentioned in Article 124.
WHEREFORE, the Court hereby DENIES the petition and
AFFIRMS the challenged Decision and Resolution. Costs
against petitioners.
SO ORDERED

Art. 1422. Acontract which is the direct result of a previous

illegal contract, is also void and inexistent. (Civil Code of the
Philippines).

In summation therefore, both the Deed of transfer of Rights

(Exh. "A") and the "amicable settlement" (Exh. "3") are null
and void.

Doctrinally and clearly, a void contract cannot be ratified. 16

Neither can the "amicable settlement" be considered a

continuing offer that was accepted and perfected by the
 G.R. No. 147978 - January 23, 2002
THELMA A. JADER-MANALO, Petitioner, vs. NORMA
FERNANDEZ C. CAMAISA and EDILBERTO
CAMAISA, Respondents.
KAPUNAN, J.:
The issue raised in this case is whether or not the husband
may validly dispose of a conjugal property without the wife's
written consent.
The present controversy had its beginning when petitioner
Thelma A. Jader-Manalo allegedly came across an
advertisement placed by respondents, the Spouses Norma
Fernandez C. Camaisa and Edilberto Camaisa, in the
Classified Ads Section of the newspaper BULLETIN TODAY in
its April, 1992 issue, for the sale of their ten-door apartment
in Makati, as well as that in Taytay, Rizal.
As narrated by petitioner in her complaint filed with the
Regional Trial Court of Makati, Metro Manila, she was
interested in buying the two properties so she negotiated for
the purchase through a real estate broker, Mr. Proceso
Ereno, authorized by respondent spouses.1 Petitioner made a
visual inspection of the said lots with the real estate broker
and was shown the tax declarations, real property tax
payment receipts, location plans, and vicinity maps relating
to the properties.2 Thereafter, petitioner met with the
vendors who turned out to be respondent spouses. She
made a definite offer to buy the properties to respondent
Edilberto Camaisa with the knowledge and conformity of his
wife, respondent Norma Camaisa in the presence of the real
estate broker.3 After some bargaining, petitioner and
Edilberto agreed upon the purchase price of P1,500,000.00
for the Taytay property and P2,100,000.00 for the Makati
property4 to be paid on installment basis with downpayments
of P100,000.00 and P200,000.00, respectively, on April 15,
1992. The balance thereof was to be paid as follows5:
Taytay Makati
Property Property
6th month P200,000.00 P300,000.00
12th month 700,000.00 1,600,000.00
18th month 500,000.00
This agreement was handwritten by petitioner and signed by
Edilberto.6 When petitioner pointed out the conjugal nature
of the properties, Edilberto assured her of his wife's
conformity and consent to the sale.7 The formal typewritten
Contracts to Sell were thereafter prepared by petitioner. The
following day, petitioner, the real estate broker and Edilberto
met in the latter's office for the formal signing of the
typewritten Contracts to Sell.8 After Edilberto signed the
contracts, petitioner delivered to him two checks, namely,
UCPB Check No. 62807 dated April 15, 1992 for P200,000.00
and UCPB Check No. 62808 also dated April 15, 1992
for P100,000.00 in the presence of the real estate broker and
an employee in Edilberto's office.9 The contracts were given
to Edilberto for the formal affixing of his wife's signature.
The following day, petitioner received a call from respondent
Norma, requesting a meeting to clarify some provisions of
the contracts.10 To accommodate her queries, petitioner,
accompanied by her lawyer, met with Edilberto and Norma
and the real estate broker at Cafe Rizal in Makati.11During
the meeting, handwritten notations were made on the
contracts to sell, so they arranged to incorporate the
notations and to meet again for the formal signing of the
contracts.12
When petitioner met again with respondent spouses and the
real estate broker at Edilberto's office for the formal affixing
of Norma's signature, she was surprised when respondent
spouses informed her that they were backing out of the
agreement because they needed "spot cash" for the full
amount of the consideration.13 Petitioner reminded
respondent spouses that the contracts to sell had already
been duly perfected and Norma's refusal to sign the same
would unduly prejudice petitioner. Still, Norma refused to
sign the contracts prompting petitioner to file a complaint for
specific performance and damages against respondent
spouses before the Regional Trial Court of Makati, Branch
136 on April 29, 1992, to compel respondent Norma Camaisa
to sign the contracts to sell.
A Motion to Dismiss14 was filed by respondents which was
denied by the trial court in its Resolution of July 21, 1992.15
Respondents then filed their Answer with Compulsory
Counter-claim, alleging that it was an agreement between
herein petitioner and respondent Edilberto Camaisa that the
sale of the subject properties was still subject to the approval
and conformity of his wife Norma Camaisa.16Thereafter,
when Norma refused to give her consent to the sale, her
refusal was duly communicated by Edilberto to
petitioner.17 The checks issued by petitioner were returned to
her by Edilberto and she accepted the same without any
objection.18 Respondent further claimed that the acceptance
of the checks returned to petitioner signified her assent to
the cancellation of the sale of the subject
properties.19 Respondent Norma denied that she ever
participated in the negotiations for the sale of the subject
properties and that she gave her consent and conformity to
the same.20
On October 20, 1992, respondent Norma F. Camaisa filed a
Motion for Summary Judgment21asserting that there is no
genuine issue as to any material fact on the basis of the
pleadings and admission of the parties considering that the
wife's written consent was not obtained in the contract to
sell, the subject conjugal properties belonging to
respondents; hence, the contract was null and void.
On April 14, 1993, the trial court rendered a summary
judgment dismissing the complaint on the ground that under
Art. 124 of the Family Code, the court cannot intervene to
authorize the transaction in the absence of the consent of
the wife since said wife who refused to give consent had not
been shown to be incapacitated. The dispositive portion of
the trial court's decision reads:
WHEREFORE, considering these premises, judgment is
hereby rendered:
1. Dismissing the complaint and ordering the cancellation of
the Notice of Lis Pendens by reason of its filing on TCT Nos.
(464860) S-8724 and (464861) S-8725 of the Registry of
Deeds at Makati and on TCT Nos. 295976 and 295971 of the
Registry of Rizal.
2. Ordering plaintiff Thelma A. Jader to pay defendant
spouses Norma and Edilberto Camaisa, FIFTY THOUSAND
(P50,000.00) as Moral Damages and FIFTY THOUSAND
(P50,000.00) as Attorney's Fees.
Costs against plaintiff.22
Petitioner, thus, elevated the case to the Court of Appeals.
On November 29, 2000, the Court of Appeals affirmed the
dismissal by the trial court but deleted the award
of P50,000.00 as damages and P50,000.00 as attorney's
fees.
The Court of Appeals explained that the properties subject of
the contracts were conjugal properties and as such, the
consent of both spouses is necessary to give effect to the
sale. Since private respondent Norma Camaisa refused to
sign the contracts, the sale was never perfected. In fact, the
downpayment was returned by respondent spouses and was
accepted by petitioner. The Court of Appeals also stressed
that the authority of the court to allow sale or encumbrance
of a conjugal property without the consent of the other
spouse is applicable only in cases where the said spouse is
incapacitated or otherwise unable to participate in the
administration of the conjugal property.
Hence, the present recourse assigning the following errors:
THE HONORABLE COURT OF APPEALS GRIEVIOUSLY ERRED
IN RENDERING SUMMARY JUDGMENT IN DISMISSING THE
COMPLAINT ENTIRELY AND ORDERING THE CANCELLATION
OF NOTICE OF LIS PENDENS ON THE TITLES OF THE
SUBJECT REAL PROPERTIES;
THE HONORABLE COURT OF APPEALS GRIEVIOUSLY ERRED
IN FAILING TO CONSIDER THAT THE SALE OF REAL
PROPERTIES BY RESPONDENTS TO PETITIONER HAVE
ALREADY BEEN PERFECTED, FOR AFTER THE LATTER PAID
P300,000.00 DOWNPAYMENT, RESPONDENT MRS. CAMAISA
NEVER OBJECTED TO STIPULATIONS WITH RESPECT TO
PRICE, OBJECT AND TERMS OF PAYMENT IN THE CONTRACT
TO SELL ALREADY SIGNED BY THE PETITIONER,
RESPONDENT MR. CAMAISA AND WITNESSES MARKED AS
ANNEX "G" IN THE COMPLAINT EXCEPT, FOR MINOR
PROVISIONS ALREADY IMPLIED BY LAW, LIKE EJECTMENT
OF TENANTS, SUBDIVISION OF TITLE AND RESCISSION IN
CASE OF NONPAYMENT, WHICH PETITIONER READILY
AGREED AND ACCEDED TO THEIR INCLUSION;
THE HONORABLE COURT OF APPEALS GRIEVIOUSLY ERRED
WHEN IT FAILED TO CONSIDER THAT CONTRACT OF SALE IS
CONSENSUAL AND IT IS PERFECTED BY THE MERE CONSENT
OF THE PARTIES AND THE APPLICABLE PROVISIONS ARE
ARTICLES 1157, 1356, 1357, 1358, 1403, 1405 AND 1475
OF THE CIVIL CODE OF THE PHILIPPINES AND GOVERNED
BY THE STATUTE OF FRAUD.23
The Court does not find error in the decisions of both the trial
court and the Court of Appeals.
Petitioner alleges that the trial court erred when it entered a
summary judgment in favor of respondent spouses there
being a genuine issue of fact. Petitioner maintains that the
issue of whether the contracts to sell between petitioner and
respondent spouses was perfected is a question of fact
necessitating a trial on the merits.
The Court does not agree. A summary judgment is one
granted by the court upon motion by a party for an
expeditious settlement of a case, there appearing from the
pleadings, depositions, admissions and affidavits that there
are no important questions or issues of fact involved, and
that therefore the moving party is entitled to judgment as a
matter of law.24 A perusal of the pleadings submitted by both
parties show that there is no genuine controversy as to the
facts involved therein.
Both parties admit that there were negotiations for the sale
of four parcels of land between petitioner and respondent
spouses; that petitioner and respondent Edilberto Camaisa
came to an agreement as to the price and the terms of
payment, and a downpayment was paid by petitioner to the
latter; and that respondent Norma refused to sign the
contracts to sell. The issue thus posed for resolution in the
trial court was whether or not the contracts to sell between
petitioner and respondent spouses were already perfected
such that the latter could no longer back out of the
agreement.
The law requires that the disposition of a conjugal property
by the husband as administrator in appropriate cases
requires the written consent of the wife, otherwise, the
disposition is void. Thus, Article 124 of the Family Code
provides:
Art. 124. The administration and enjoyment of the conjugal
partnership property shall belong to both spouses jointly. In
case of disagreement, the husband's decision shall prevail,
subject to recourse to the court by the wife for a proper
remedy, which must be availed of within five years from the
date of the contract implementing such decision.
In the event that one spouse is incapacitated or otherwise
unable to participate in the administration of the conjugal
properties, the other spouse may assume sole powers of
administration. These powers do not include the powers of
disposition or encumbrance which must have the authority of
the court or the written consent of the other spouse. In the
absence of such authority or consent the disposition or
encumbrance shall be void. However, the transaction shall be
construed as a continuing offer on the part of the consenting
spouse and the third person, and may be perfected as a
binding contract upon the acceptance by the other spouse or
authorization by the court before the offer is withdrawn by
either or both offerors. (Underscoring ours.)
The properties subject of the contracts in this case were
conjugal; hence, for the contracts to sell to be effective, the
consent of both husband and wife must concur.
Respondent Norma Camaisa admittedly did not give her
written consent to the sale. Even granting that respondent
Norma actively participated in negotiating for the sale of the
subject properties, which she denied, her written consent to
the sale is required by law for its validity. Significantly,
petitioner herself admits that Norma refused to sign the
contracts to sell. Respondent Norma may have been aware
of the negotiations for the sale of their conjugal properties.
However, being merely aware of a transaction is not
consent.25
Finally, petitioner argues that since respondent Norma
unjustly refuses to affix her signatures to the contracts to
sell, court authorization under Article 124 of the Family Code
is warranted.
The argument is bereft of merit. Petitioner is correct insofar
as she alleges that if the written consent of the other spouse
cannot be obtained or is being withheld, the matter may be
brought to court which will give such authority if the same is
warranted by the circumstances. However, it should be
stressed that court authorization under Art. 124 is only
resorted to in cases where the spouse who does not give
consent is incapacitated.26
In this case, petitioner failed to allege and prove that
respondent Norma was incapacitated to give her consent to
the contracts. In the absence of such showing of the wife's
incapacity, court authorization cannot be sought.

Under the foregoing facts, the motion for summary judgment

was proper considering that there was no genuine issue as to
any material fact. The only issue to be resolved by the trial
court was whether the contract to sell involving conjugal
properties was valid without the written consent of the wife.

WHEREFORE, the petition is hereby DENIED and the

decision of the Court of Appeals dated November 29, 2000 in
CA-G.R. CV No. 43421 AFFIRMED.

SO ORDERED.
 [G.R. NO. 153802. March 11, 2005]
HOMEOWNERS SAVINGS & LOAN
BANK, Petitioner, v. MIGUELA C. DAILO, Respondents.
DECISION
TINGA, J.:
This is a Petition for Review on Certiorari under Rule 45 of
the Revised Rules of Court, assailing the Decision1 of the
Court of Appeals in CA-G.R. CV No. 59986 rendered on June
3, 2002, which affirmed with modification the October 18,
1997 Decision2 of the Regional Trial Court, Branch 29, San
Pablo City, Laguna in Civil Case No. SP-4748 (97).
The following factual antecedents are undisputed.
Respondent Miguela C. Dailo and Marcelino Dailo, Jr. were
married on August 8, 1967. During their marriage, the
spouses purchased a house and lot situated at Barangay San
Francisco, San Pablo City from a certain Sandra Dalida. The
subject property was declared for tax assessment purposes
under Assessment of Real Property No. 94-051-2802. The
Deed of Absolute Sale, however, was executed only in favor
of the late Marcelino Dailo, Jr. as vendee thereof to the
exclusion of his wife.3
On December 1, 1993, Marcelino Dailo, Jr. executed a
Special Power of Attorney (SPA) in favor of one Lilibeth
Gesmundo, authorizing the latter to obtain a loan from
petitioner Homeowners Savings and Loan Bank to be secured
by the spouses Dailo's house and lot in San Pablo City.
Pursuant to the SPA, Gesmundo obtained a loan in the
amount of P300,000.00 from petitioner. As security therefor,
Gesmundo executed on the same day a Real Estate Mortgage
constituted on the subject property in favor of petitioner. The
abovementioned transactions, including the execution of the
SPA in favor of Gesmundo, took place without the knowledge
and consent of respondent.4
Upon maturity, the loan remained outstanding. As a result,
petitioner instituted extrajudicial foreclosure proceedings on
the mortgaged property. After the extrajudicial sale thereof,
a Certificate of Sale was issued in favor of petitioner as the
highest bidder. After the lapse of one year without the
property being redeemed, petitioner, through its vice-
president, consolidated the ownership thereof by executing
on June 6, 1996 an Affidavit of Consolidation of Ownership
and a Deed of Absolute Sale.5
In the meantime, Marcelino Dailo, Jr. died on December 20,
1995. In one of her visits to the subject property, respondent
learned that petitioner had already employed a certain
Roldan Brion to clean its premises and that her car, a Ford
sedan, was razed because Brion allowed a boy to play with
fire within the premises.
Claiming that she had no knowledge of the mortgage
constituted on the subject property, which was conjugal in
nature, respondent instituted with the Regional Trial Court,
Branch 29, San Pablo City, Civil Case No. SP-2222 (97)
for Nullity of Real Estate Mortgage and Certificate of Sale,
Affidavit of Consolidation of Ownership, Deed of Sale,
Reconveyance with Prayer for Preliminary Injunction and
Damages against petitioner. In the latter's Answer with
Counterclaim, petitioner prayed for the dismissal of the
complaint on the ground that the property in question was
the exclusive property of the late Marcelino Dailo, Jr.
After trial on the merits, the trial court rendered
a Decision on October 18, 1997. The dispositive portion
thereof reads as follows:
WHEREFORE, the plaintiff having proved by the
preponderance of evidence the allegations of the Complaint,
the Court finds for the plaintiff and hereby orders:
ON THE FIRST CAUSE OF ACTION:
1. The declaration of the following documents as null and
void:
(a) The Deed of Real Estate Mortgage dated December 1,
1993 executed before Notary Public Romulo Urrea and his
notarial register entered as Doc. No. 212; Page No. 44, Book
No. XXI, Series of 1993.
(b) The Certificate of Sale executed by Notary Public
Reynaldo Alcantara on April 20, 1995.
(c) The Affidavit of Consolidation of Ownership executed by
the defendant
(c) The Affidavit of Consolidation of Ownership executed by
the defendant over the residential lot located at Brgy. San
Francisco, San Pablo City, covered by ARP No. 95-091-1236
entered as Doc. No. 406; Page No. 83, Book No. III, Series
of 1996 of Notary Public Octavio M. Zayas.
(d) The assessment of real property No. 95-051-1236.
2. The defendant is ordered to reconvey the property subject
of this complaint to the plaintiff.
ON THE SECOND CAUSE OF ACTION
1. The defendant to pay the plaintiff the sum of P40,000.00
representing the value of the car which was burned.
ON BOTH CAUSES OF ACTION
1. The defendant to pay the plaintiff the sum of P25,000.00
as attorney's fees;
2. The defendant to pay plaintiff P25,000.00 as moral
damages;
3. The defendant to pay the plaintiff the sum of P10,000.00
as exemplary damages;
4. To pay the cost of the suit.
The counterclaim is dismissed.
SO ORDERED.6
Upon elevation of the case to the Court of Appeals, the
appellate court affirmed the trial court's finding that the
subject property was conjugal in nature, in the absence of
clear and convincing evidence to rebut the presumption that
the subject property acquired during the marriage of spouses
Dailo belongs to their conjugal partnership.7 The appellate
court declared as void the mortgage on the subject property
because it was constituted without the knowledge and
consent of respondent, in accordance with Article 124 of the
Family Code. Thus, it upheld the trial court's order to
reconvey the subject property to respondent.8 With respect
to the damage to respondent's car, the appellate court found
petitioner to be liable therefor because it is responsible for
the consequences of the acts or omissions of the person it
hired to accomplish the assigned task.9 All told, the appellate
court affirmed the trial court's Decision, but deleted the
award for damages and attorney's fees for lack of basis.10
Hence, this petition, raising the following issues for this
Court's consideration:
1. WHETHER OR NOT THE MORTGAGE CONSTITUTED BY THE
LATE MARCELINO DAILO, JR. ON THE SUBJECT PROPERTY
AS CO-OWNER THEREOF IS VALID AS TO HIS UNDIVIDED
SHARE.
2. WHETHER OR NOT THE CONJUGAL PARTNERSHIP IS
LIABLE FOR THE PAYMENT OF THE LOAN OBTAINED BY THE
LATE MARCELINO DAILO, JR. THE SAME HAVING
REDOUNDED TO THE BENEFIT OF THE FAMILY.11
First, petitioner takes issue with the legal provision
applicable to the factual milieu of this case. It contends that
Article 124 of the Family Code should be construed in
relation to Article 493 of the Civil Code, which states:
ART. 493. Each co-owner shall have the full ownership of his
part and of the fruits and benefits pertaining thereto, and he
may therefore alienate, assign or mortgage it, and even
substitute another person in its enjoyment, except when
personal rights are involved. But the effect of the alienation
or the mortgage, with respect to the co-owners, shall be
limited to the portion which may be allotted to him in the
division upon the termination of the co-ownership.
Article 124 of the Family Code provides in part:
ART. 124. The administration and enjoyment of the conjugal
partnership property shall belong to both spouses jointly. . . .
In the event that one spouse is incapacitated or otherwise
unable to participate in the administration of the conjugal
properties, the other spouse may assume sole powers of
administration. These powers do not include the powers of
disposition or encumbrance which must have the authority of
the court or the written consent of the other spouse. In the
absence of such authority or consent, the disposition or
encumbrance shall be void. . . .
Petitioner argues that although Article 124 of the Family
Code requires the consent of the other spouse to the
mortgage of conjugal properties, the framers of the law
could not have intended to curtail the right of a spouse from
exercising full ownership over the portion of the conjugal
property pertaining to him under the concept of co-
ownership.12 Thus, petitioner would have this Court uphold
the validity of the mortgage to the extent of the late
Marcelino Dailo, Jr.'s share in the conjugal partnership.
In Guiang v. Court of Appeals,13 it was held that the sale of a
conjugal property requires the consent of both the husband
and wife.14 In applying Article 124 of the Family Code, this
Court declared that the absence of the consent of one
renders the entire sale null and void, including the portion of
the conjugal property pertaining to the husband who
contracted the sale. The same principle in Guiang squarely
applies to the instant case. As shall be discussed next, there
is no legal basis to construe Article 493 of the Civil Code as
an exception to Article 124 of the Family Code.
Respondent and the late Marcelino Dailo, Jr. were married on
August 8, 1967. In the absence of a marriage settlement,
the system of relative community or conjugal partnership of
gains governed the property relations between respondent
and her late husband.15 With the effectivity of the Family
Code on August 3, 1988, Chapter 4 on Conjugal Partnership
of Gains in the Family Code was made applicable to conjugal
partnership of gains already established before its effectivity
unless vested rights have already been acquired under the
Civil Code or other laws.16
The rules on co-ownership do not even apply to the property
relations of respondent and the late Marcelino Dailo, Jr. even
in a suppletory manner. The regime of conjugal partnership
of gains is a special type of partnership, where the husband
and wife place in a common fund the proceeds, products,
fruits and income from their separate properties and those
acquired by either or both spouses through their efforts or by
chance.17 Unlike the absolute community of property wherein
the rules on co-ownership apply in a suppletory
manner,18 the conjugal partnership shall be governed by the
rules on contract of partnership in all that is not in conflict
with what is expressly determined in the chapter (on
conjugal partnership of gains) or by the spouses in their
marriage settlements.19 Thus, the property relations of
respondent and her late husband shall be governed,
foremost, by Chapter 4 on Conjugal Partnership of Gains of
the Family Code and, suppletorily, by the rules on
partnership under the Civil Code. In case of conflict, the
former prevails because the Civil Code provisions on
partnership apply only when the Family Code is silent on the
matter.
The basic and established fact is that during his lifetime,
without the knowledge and consent of his wife, Marcelino
Dailo, Jr. constituted a real estate mortgage on the subject
property, which formed part of their conjugal partnership. By
express provision of Article 124 of the Family Code, in the
absence of (court) authority or written consent of the other
spouse, any disposition or encumbrance of the conjugal
property shall be void.
The aforequoted provision does not qualify with respect to
the share of the spouse who makes the disposition or
encumbrance in the same manner that the rule on co-
ownership under Article 493 of the Civil Code does. Where
the law does not distinguish, courts should not
distinguish.20 Thus, both the trial court and the appellate
court are correct in declaring the nullity of the real estate
mortgage on the subject property for lack of respondent's
consent.
Second, petitioner imposes the liability for the payment of
the principal obligation obtained by the late Marcelino Dailo,
Jr. on the conjugal partnership to the extent that it
redounded to the benefit of the family.21
Under Article 121 of the Family Code, "[T]he conjugal
partnership shall be liable for: . . . (3) Debts and obligations
contracted by either spouse without the consent of the other
to the extent that the family may have been benefited; . . .
." For the subject property to be held liable, the obligation
contracted by the late Marcelino Dailo, Jr. must have
redounded to the benefit of the conjugal partnership. There
must be the requisite showing then of some advantage which
clearly accrued to the welfare of the spouses. Certainly, to
make a conjugal partnership respond for a liability that
should appertain to the husband alone is to defeat and
frustrate the avowed objective of the new Civil Code to show
the utmost concern for the solidarity and well-being of the
family as a unit.22
The burden of proof that the debt was contracted for the
benefit of the conjugal partnership of gains lies with the
creditor-party litigant claiming as such.23 Ei incumbit probatio
qui dicit, non qui negat (he who asserts, not he who denies,
must prove).24 Petitioner's sweeping conclusion that the loan
obtained by the late Marcelino Dailo, Jr. to finance the
construction of housing units without a doubt redounded to
the benefit of his family, without adducing adequate proof,
does not persuade this Court. Other than petitioner's bare
allegation, there is nothing from the records of the case to
compel a finding that, indeed, the loan obtained by the late
Marcelino Dailo, Jr. redounded to the benefit of the family.
Consequently, the conjugal partnership cannot be held liable
for the payment of the principal obligation.

In addition, a perusal of the records of the case reveals that

during the trial, petitioner vigorously asserted that the
subject property was the exclusive property of the late
Marcelino Dailo, Jr. Nowhere in the answer filed with the trial
court was it alleged that the proceeds of the loan redounded
to the benefit of the family. Even on appeal, petitioner never
claimed that the family benefited from the proceeds of the
loan. When a party adopts a certain theory in the court
below, he will not be permitted to change his theory on
appeal, for to permit him to do so would not only be unfair to
the other party but it would also be offensive to the basic
rules of fair play, justice and due process.25 A party may
change his legal theory on appeal only when the factual
bases thereof would not require presentation of any further
evidence by the adverse party in order to enable it to
properly meet the issue raised in the new theory.26

WHEREFORE, the petition is DENIED. Costs against

petitioner.

SO ORDERED.
 G.R. No. 190846, February 03, 2016
TOMAS P. TAN, JR., Petitioner, v. JOSE G.
HOSANA, Respondent.
DECISION
BRION, J.:
Before us is a petition for review on certiorari1 challenging
the August 28, 2009 decision2 and November 17, 2009
resolution3 of the Court of Appeals (CA) in CA-G.R. CV No.
88645.chanRoblesvirtualLawlibrary
The Facts
The respondent Jose G. Hosana (Jose) married Milagros C.
Hosana (Milagros) on January 14, 1979.4During their
marriage, Jose and Milagros bought a house and lot located
at Tinago, Naga City, which lot was covered by Transfer
Certificate of Title (TCT) No.
21229.5chanroblesvirtuallawlibrary
of Naga City.9 The complaint was filed before the Regional
Trial Court (RTC), Branch 62, Naga City. In the complaint,
Jose averred that while he was working in Japan, Milagros,
without his consent and knowledge, conspired with Tomas to
execute the SPA by forging Jose's signature making it appear
that Jose had authorized Milagros to sell the subject property
to Tomas.10chanroblesvirtuallawlibrary
In his Answer, Tomas maintained that he was a buyer in
good faith and for value.11 Before he paid the full
consideration of the sale, Tomas claimed he sought advice
from his lawyer-friend who told him that the title of the
subject lot was authentic and in order.12 Furthermore, he
alleged that the SPA authorizing Milagros to sell the property
was annotated at the back of the
title.13chanroblesvirtuallawlibrary
Tomas filed a cross-claim against Milagros and claimed
compensatory and moral damages, attorney's fees, and
expenses, for litigation, in the event that judgment be
rendered in favor of Jose.14chanroblesvirtuallawlibrary

The RTC declared Milagros in default for her failure to file her
On January 13, 1998, Milagros sold to the petitioner Tomas
answer to Jose's complaint and Tomas' cross-claim.15 On the
P. Tan, Jr. (Tomas) the subject property, as evidenced by a
other hand, it dismissed Tomas' complaint against the
deed of sale executed by Milagros herself and as attorney-in-
Register of Deeds since it was only a nominal
fact of Jose, by virtue of a Special Power of Attorney (SPA)
party.16chanroblesvirtuallawlibrary
executed by Jose in her favor.6 The Deed of Sale stated that
the purchase price for the lot was P200,000.00.7 After the
After the pre-trial conference, trial on the merits
sale, TCT No. 21229 was cancelled and TCT No. 32568 was
ensued.17chanroblesvirtuallawlibrary
issued in the name of Tomas.8chanroblesvirtuallawlibrary

Jose presented his brother, Bonifacio Hosana (Bonifacio), as

On October 19, 2001, Jose filed a Complaint for Annulment
sole witness. Bonifacio testified that he learned of the sale of
of Sale/Cancellation of Title/Reconveyance and
the subject property from Milagros' son.18 When Bonifacio
Damages against Milagros, Tomas, and the Register of Deeds
confronted Milagros that Jose would get angry because of the
sale, Milagros retorted that she sold the property because lower than the actual consideration paid. Milagros explained
she needed the money. Bonifacio immediately informed Jose, that it was done to save on taxes. Tomas also learned from
who was then in Japan, of the Milagros that she needed money badly and had to sell the
sale.19chanroblesvirtuallawlibrary house because Jose had stopped sending her
money.24chanRoblesvirtualLawlibrary
Jose was furious when he learned of the sale and went back
to the Philippines. Jose and Bonifacio verified with the The RTC Ruling
Register of Deeds and discovered that the title covering the
disputed property had been transferred to In its decision dated December 27, 2006,25 the RTC decided
Tomas.20chanroblesvirtuallawlibrary in favor of Jose and nullified the sale of the subject property
to Tomas. The RTC held that the SPA dated June 10, 1996,
Bonifacio further testified that Jose's signature in the SPA wherein Jose supposedly appointed Milagros as his attorney-
was forged.21 Bonifacio presented documents containing the in-fact, was actually null and void.
signature of Jose for comparison: Philippine passport,
complaint-affidavit, duplicate original of SPA dated 16 Tomas and Milagros were ordered to jointly and severally
February 2002, notice of lis pendens, community tax indemnify Jose the amount of P20,000.00 as temperate
certificate, voter's affidavit, specimen signatures, and a damages.26chanRoblesvirtualLawlibrary
handwritten letter.22chanroblesvirtuallawlibrary
The CA Ruling
On the other hand, Tomas submitted his own account of
Tomas appealed the RTC's ruling to the CA.
events as corroborated by Rosana Robles (Rosana), his
goddaughter. Sometime in December 1997, Tomas directed
In a decision dated August 28, 2009,27 the CA affirmed the
Rosana to go to the house of Milagros to confirm if Jose knew
RTC ruling that the deed of sale and the SPA were void.
about the sale transaction. Through a phone call by Milagros
However, the CA modified the judgment of the RTC: first, by
to Jose, Rosana was able to talk to Jose who confirmed that
deleting the award of temperate damages; and second, by
he was aware of the sale and had given his wife authority to
directing Jose and Milagros to reimburse Tomas the purchase
proceed with the sale. Rosana informed Tomas of Jose's
price of P200,000.00, with interest, under the principle of
confirmation.23chanroblesvirtuallawlibrary
unjust enrichment. Despite Tomas' allegation that he paid
P700,000.00 for the subject lot, the CA found that there was
With the assurance that all the documents were in order,
no convincing evidence that established this
Tomas made a partial payment of P350,000.00 and another
claim.28chanroblesvirtuallawlibrary
P350,000.00 upon the execution of the Deed of Absolute
Sale (Deed of Sale). Tomas noticed that the consideration
Tomas filed a motion for the reconsideration of the CA
written by Milagros on the Deed of Sale was only
decision on the ground that the amount of P200,000.00 as
P200,000.00; he inquired why the written consideration was
reimbursement for the purchase price of the house and lot
was insufficient and not supported by the evidence formally
offered before and admitted by the RTC. Tomas contended
that the actual amount he paid as consideration for the sale
was P700,000.00, as supported by his testimony before the
RTC.29chanroblesvirtuallawlibrary
The C A denied the motion for reconsideration for lack of
merit" in a resolution dated November 17,
2009.30chanRoblesvirtualLawlibrary
The Petition
Tomas filed the present petition for review on certiorari to
challenge the CA ruling which ordered the reimbursement of
P200,000.00 only, instead of the actual purchase price he
paid in the amount of
P700,000.00.31chanroblesvirtuallawlibrary
Tomas argues that, first, all matters contained in the deed of
sale, including the consideration stated, cannot be used as
evidence since it was declared null and void; second, the
deed of sale was not specifically offered to prove the actual
consideration of the sale;32third, his testimony establishing
the actual purchase price of P700,000.00 paid was
uncontroverted;33 and, fourth, Jose must return the full
amount actually paid under the principle of solutio
indebiti.34chanroblesvirtuallawlibrary
Jose, on the other hand, argues that first, Jose is estopped
from questioning the purchase price indicated in the deed of
dale for failing to immediately raise this question;
and second, the terms of an agreement reduced into writing
are deemed to include all the terms agreed upon and no
other evidence can be admitted other than the terms of the
agreement itself.35chanRoblesvirtualLawlibrary
The Issues
The core issues are (1) whether the deed of sale can be used
as the basis for the amount of consideration paid; and (2)
whether the testimony of Tomas is sufficient to establish the
actual purchase price of the sale.chanRoblesvirtualLawlibrary
OUR RULING
We affirm the CA ruling and deny the petition.
Whether Tomas paid the purchase price of P700,000.00 is a
question of fact not proper in a petition for review
on certiorari. Appreciation of evidence and inquiry on the
correctness of the appellate court's factual findings are not
the functions of this Court, as we are not a trier of
facts.36chanroblesvirtuallawlibrary
This Court does not address questions of fact which require
us to rule on "the truth or falsehood of alleged
facts,"37 except in the following
cases:ChanRoblesVirtualawlibrary
(1) when the findings are grounded entirely on speculations,
surmises, or conjectures; (2) when the inference made is
manifestly mistaken, absurd, or impossible; (3) when there
is a grave abuse of discretion; (4) when the judgment is
based on misappreciation of facts; (5) when the findings of
fact are conflicting; (6) when in making its findings, the
same are contrary to the admissions of both appellant and
appellee; (7) when the findings are contrary to those of the
trial court; (8) when the findings are conclusions without
citation of specific evidence on which they are based; (9)
when the facts set forth in the petition as well as in the
petitioner's main and reply briefs are not disputed by the
respondent; and (10) when the findings of fact are premised
on the supposed absence of evidence and contradicted by
the evidence on record.38chanroblesvirtuallawlibrary
The present case does not fall under any of these exceptions.
Whether Tomas sufficiently proved that he paid P700,000.00
for the subject property is a factual question that the CA had
already resolved in the negative.39 The CA found Tomas'
claim of paying P700,000.00 for the subject property to be
unsubstantiated as he failed to tender any convincing
evidence to establish his claim.
We uphold the CA's finding.
In civil cases, the basic rule is that the party making
allegations has the burden of proving them by a
preponderance of evidence.40 Moreover, the parties must rely
on the strength of their own evidence, not upon the
weakness of the defense offered by their
opponent.41chanroblesvirtuallawlibrary
Preponderance of evidence is the weight, credit, and
value of the aggregate evidence on either side and is usually
considered to be synonymous with the term "greater weight
of the evidence" or "greater weight of the credible
evidence."42 Preponderance of evidence is a phrase that, in
the last analysis, means probability of the truth. It is
evidence that is more convincing to the court as it is worthier
of belief than that which is offered in opposition
thereto.43chanroblesvirtuallawlibrary
We agree with the CA that Tomas' bare allegation that he
paid Milagros the sum of P700,000.00 cannot be considered
as proof of payment, without any other convincing evidence
to establish this claim. Tomas' bare allegation, while
uncontroverted, does not automatically entitle it to be given
weight and credence.
It is settled in jurisprudence that one who pleads payment
has the burden of proving it;44 the burden rests on the
defendant to prove payment, rather than on the plaintiff to
prove non-payment.45 A mere allegation is not
evidence,46 and the person who alleges has the burden of
proving his or her allegation with the requisite quantum of
evidence, which in civil cases is preponderance of evidence.
The force and effect of a void contract is distinguished
from its admissibility as evidence.
The next question to be resolved is whether the CA correctly
ordered the reimbursement of P200,000.00, which is the
consideration stated in the Deed of Sale, based on the
principle of unjust enrichment.
The petitioner argues that the CA erred in relying on the
consideration stated in the deed of sale as basis for the
reimbursable amount because a null and void document
cannot be used as evidence.
We find no merit in the petitioner's argument.
A void or inexistent contract has no force and effect from the
very beginning.47 This rule applies to contracts that are
declared void by positive provision of law, as in the case of a
sale of conjugal property without the other spouse's written
consent.48 A void contract is equivalent to nothing and is
absolutely wanting in civil effects.49 It cannot be validated
either by ratification or prescription.50 When, however, any of
the terms of a void contract have been performed, an action
to declare its inexistence is necessary to allow restitution of
what has been given under it.51chanroblesvirtuallawlibrary
It is basic that if a void contract has already "been
performed, the restoration of what has been given is in
order."52 This principle springs from Article 22 of the New
Civil Code which states that "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."
Hence, the restitution of what each party has given is a
consequence of a void and inexistent contract.
While the terms and provisions of a void contract cannot be
enforced since it is deemed inexistent, it does not preclude
the admissibility of the contract as evidence to prove matters
that occurred in the course of executing the contract, i.e.,
what each party has given in the execution of the contract.
Evidence is the means of ascertaining in a judicial
proceeding the truth respecting a matter of fact, sanctioned
by the Rules of Court.53 The purpose of introducing
documentary evidence is to ascertain the truthfulness of a
matter at issue, which can be the entire content or a specific
provision/term in the document.
The deed of sale as documentary evidence may be used as a
means to ascertain the truthfulness of the consideration
stated and its actual payment. The purpose of introducing
the deed of sale as evidence is not to enforce the terms
written in the contract, which is an obligatory force and
effect of a valid contract. The deed of sale, rather, is used as
a means to determine matters that occurred in the execution
of such contract, i.e., the determination of what each party
has given under the void contract to allow restitution and
prevent unjust enrichment.
Evidence is admissible when it is relevant to the issue and
is not excluded by the law of these rules.54There is no
provision in the Rules of Evidence which excludes the
admissibility of a void document. The Rules only require that
the evidence is relevant and not excluded by the Rules for its
admissibility.55chanroblesvirtuallawlibrary
Hence, a void document is admissible as evidence because
the purpose of introducing it as evidence is to ascertain the
truth respecting a matter of fact, not to enforce the terms of
the document itself.
It is also settled in jurisprudence that with respect to
evidence which appears to be of doubtful relevancy,
incompetency, or admissibility, the safer policy is to be
liberal and not reject them on doubtful or technical grounds,
but admit them unless plainly irrelevant, immaterial, or
incompetent; for the reason that their rejection places them
beyond the consideration of the court, if they are thereafter
found relevant or competent. On the other hand, their
admission, if they turn out later to be irrelevant or
incompetent, can easily be remedied by completely
discarding them or ignoring
them.56chanroblesvirtuallawlibrary
In the present case, the deed of sale was declared null and
void by positive provision of the law prohibiting the sale of
conjugal property without the spouse's consent. It does not,
however, preclude the possibility that Tomas paid the
consideration stated therein. The admission of the deed of
sale as evidence is consistent with the liberal policy of the
court to admit the evidence: which appears to be relevant in
resolving an issue before the courts.
An offer to prove the regular execution of the deed of
sale is basis for the court to determine the presence of
the essential elements of the sale, including the
consideration paid.
Tomas argues that the Deed of Sale was not specifically
offered to prove the actual consideration of the sale and,
hence, cannot be considered by the court. Tomas is
incorrect.
The deed of sale in the present case was formally offered by
both parties as evidence.57 Tomas, in fact, formally offered it
for the purpose of proving its execution and the regularity of
the sale.58chanroblesvirtuallawlibrary
The offer of the deed of sale to prove its regularity
necessarily allowed the; lower courts to consider the terms
written therein to determine whether all the essential
elements59 for a valid contract of sale are present, including
the consideration of the sale. The fact that the sale was
declared null and void does not prevent the court from
relying on consideration stated in the deed of sale to
determine the actual amount paid by the petitioner for the
purpose of preventing unjust enrichment.
Hence, the specific offer of the Deed of Sale to prove the
actual consideration of the sale is not necessary since it is
necessarily included in determining the regular execution of
the sale.
The consideration stated in the notarized Deed of Sale
is prima facie evidence of the amount paid by the
petitioner.
The notarized deed of sale is a public document and is prima
facie evidence of the truth of the facts stated
therein.60chanroblesvirtuallawlibrary
Prima facie evidence is defined as evidence good and
sufficient on its face. Such evidence as, in the judgment of
the law, is sufficient to establish a given fact, or the group or
chain of facts constituting the party's claim or defense and
which if not rebutted or contradicted, will remain
sufficient.61chanroblesvirtuallawlibrary
In the present case, the consideration stated in the deed of
sale constitutes prima facie evidence of the amount paid by
Tomas for the transfer of the property to his name. Tomas
failed to adduce satisfactory evidence to rebut or contradict
the consideration stated as the actual consideration and
amount paid to Milagros and Jose.
The deed of sale was declared null and void by a positive
provision of law requiring the consent of both spouses for the
sale of conjugal property. There is, however, no question on
the presence of the consideration of the sale, except with
respect to the actual amount paid. While the deed of sale has
no force and effect as a contract, it remains prima
facie evidence of the actual consideration paid.
As earlier discussed, Tomas failed to substantiate his claim
that he paid to Milagros the amount of P700,000.00, instead
of the amount of P200,000.00 stated in the deed of sale. No
documentary or testimonial evidence to prove payment of
the higher amount was presented, apart from Tomas' sole
testimony. Tomas' sole testimony of payment is self-serving
and insufficient to unequivocally prove that Milagros received
P700,000.00 for the subject property.
Hence, the consideration stated in the deed of sale remains
sufficient evidence of the actual amount the petitioner paid
and the same amount which should be returned under the
principle of unjust enrichment.

Unjust enrichment exists "when a person unjustly retains a

benefit at the loss of another, or when a person retains
money or property of another against the fundamental
principles of justice, equity, and good conscience."62 The
prevention of unjust enrichment is a recognized public policy
of the State and is based on Article 22 of the Civil
Code.63chanroblesvirtuallawlibrary

The principle of unjust enrichment requires Jose to return

what he or Milagros received under the void contract which
presumably benefitted their conjugal partnership.

Accordingly, the CA correctly ordered Jose to return the

amount of P200,000.00 since this the consideration stated in
the Deed of Sale and given credence by the lower court.
Indeed, even Jose expressly stated in his comment that
Tomas is entitled to recover the money paid by him in the
amount of P200,000.00 as appearing in the contract.

WHEREFORE, we hereby DENY the petition for review

on certiorari. The decision dated August 28, 2009 and the
resolution dated November 17, 2009, of the Court of Appeals
in CA-G.R. CV No. 88645 is AFFIRMED. Costs against the
petitioner.

SO ORDERED.cralawlawlibrary
 G.R. No. 178902 : April 21, 2010
MANUEL O. FUENTES and LETICIA L.
FUENTES, Petitioners, v. CONRADO G. ROCA,
ANNABELLE R. JOSON, ROSE MARIE R. CRISTOBAL and
PILAR MALCAMPO, Respondents.
DECISION
ABAD, J.:
This case is about a husband's sale of conjugal real property,
employing a challenged affidavit of consent from an
estranged wife. The buyers claim valid consent, loss of right
to declare nullity of sale, and prescription.
The Facts and the Case
Sabina Tarroza owned a titled 358-square meter lot in
Canelar, Zamboanga City. On October 11, 1982 she sold it to
her son, Tarciano T. Roca (Tarciano) under a deed of
absolute sale.1cЃa But Tarciano did not for the meantime
have the registered title transferred to his name.
Six years later in 1988, Tarciano offered to sell the lot to
petitioners Manuel and Leticia Fuentes (the Fuentes
spouses). They arranged to meet at the office of Atty.
Romulo D. Plagata whom they asked to prepare the
documents of sale. They later signed an agreement to sell
that Atty. Plagata prepared2cЃa dated April 29, 1988, which
agreement expressly stated that it was to take effect in six
months.
The agreement required the Fuentes spouses to pay Tarciano
a down payment of P60,000.00 for the transfer of the lot's
title to him. And, within six months, Tarciano was to clear
the lot of structures and occupants and secure the consent of
his estranged wife, Rosario Gabriel Roca (Rosario), to the
sale. Upon Tarciano's compliance with these conditions, the
Fuentes spouses were to take possession of the lot and pay
him an additional P140,000.00 or P160,000.00, depending
on whether or not he succeeded in demolishing the house
standing on it. If Tarciano was unable to comply with these
conditions, the Fuentes spouses would become owners of the
lot without any further formality and payment.
The parties left their signed agreement with Atty. Plagata
who then worked on the other requirements of the sale.
According to the lawyer, he went to see Rosario in one of his
trips to Manila and had her sign an affidavit of
consent.3cЃa As soon as Tarciano met the other conditions,
Atty. Plagata notarized Rosario's affidavit in Zamboanga City.
On January 11, 1989 Tarciano executed a deed of absolute
sale4cЃa in favor of the Fuentes spouses. They then paid him
the additional P140,000.00 mentioned in their agreement. A
new title was issued in the name of the spouses5cЃa who
immediately constructed a building on the lot. On January
28, 1990 Tarciano passed away, followed by his wife Rosario
who died nine months afterwards.
Eight years later in 1997, the children of Tarciano and
Rosario, namely, respondents Conrado G. Roca, Annabelle R.
Joson, and Rose Marie R. Cristobal, together with Tarciano's
sister, Pilar R. Malcampo, represented by her son, John Paul
M. Trinidad (collectively, the Rocas), filed an action for
annulment of sale and reconveyance of the land against the
Fuentes spouses before the Regional Trial Court (RTC) of
Zamboanga City in Civil Case 4707. The Rocas claimed that
the sale to the spouses was void since Tarciano's wife,
Rosario, did not give her consent to it. Her signature on the
affidavit of consent had been forged. They thus prayed that
the property be reconveyed to them upon reimbursement of
the price that the Fuentes spouses paid
Tarciano.6cräläwvirtualibräry
The spouses denied the Rocas' allegations. They presented
Atty. Plagata who testified that he personally saw Rosario
sign the affidavit at her residence in Paco, Manila, on
September 15, 1988. He admitted, however, that he
notarized the document in Zamboanga City four months later
on January 11, 1989.7cЃa All the same, the Fuentes spouses
pointed out that the claim of forgery was personal to Rosario
and she alone could invoke it. Besides, the four-year
prescriptive period for nullifying the sale on ground of fraud
had already lapsed.
Both the Rocas and the Fuentes spouses presented
handwriting experts at the trial. Comparing Rosario's
standard signature on the affidavit with those on various
documents she signed, the Rocas' expert testified that the
signatures were not written by the same person. Making the
same comparison, the spouses' expert concluded that they
were.8cЃa
On February 1, 2005 the RTC rendered judgment, dismissing
the case. It ruled that the action had already prescribed
since the ground cited by the Rocas for annulling the sale,
forgery or fraud, already prescribed under Article 1391 of the
Civil Code four years after its discovery. In this case, the
Rocas may be deemed to have notice of the fraud from the
date the deed of sale was registered with the Registry of
Deeds and the new title was issued. Here, the Rocas filed
their action in 1997, almost nine years after the title was
issued to the Fuentes spouses on January 18,
1989.9cräläwvirtualibräry
Moreover, the Rocas failed to present clear and convincing
evidence of the fraud. Mere variance in the signatures of
Rosario was not conclusive proof of forgery.10cЃa The RTC
ruled that, although the Rocas presented a handwriting
expert, the trial court could not be bound by his opinion
since the opposing expert witness contradicted the same.
Atty. Plagata's testimony remained technically
unrebutted.11cräläwvirtualibräry
Finally, the RTC noted that Atty. Plagata's defective
notarization of the affidavit of consent did not invalidate the
sale. The law does not require spousal consent to be on the
deed of sale to be valid. Neither does the irregularity vitiate
Rosario's consent. She personally signed the affidavit in the
presence of Atty. Plagata.12cЃa
On appeal, the Court of Appeals (CA) reversed the RTC
decision. The CA found sufficient evidence of forgery and did
not give credence to Atty. Plagata's testimony that he saw
Rosario sign the document in Quezon City. Its jurat said
differently. Also, upon comparing the questioned signature
with the specimen signatures, the CA noted significant
variance between them. That Tarciano and Rosario had been
living separately for 30 years since 1958 also reinforced the
conclusion that her signature had been forged.
Since Tarciano and Rosario were married in 1950, the CA
concluded that their property relations were governed by the
Civil Code under which an action for annulment of sale on
the ground of lack of spousal consent may be brought by the
wife during the marriage within 10 years from the
transaction. Consequently, the action that the Rocas, her
heirs, brought in 1997 fell within 10 years of the January 11,
1989 sale.
Considering, however, that the sale between the Fuentes
spouses and Tarciano was merely voidable, the CA held that
its annulment entitled the spouses to reimbursement of what
they paid him plus legal interest computed from the filing of
the complaint until actual payment. Since the Fuentes
spouses were also builders in good faith, they were entitled
under Article 448 of the Civil Code to payment of the value of
the improvements they introduced on the lot. The CA did not
award damages in favor of the Rocas and deleted the award
of attorney's fees to the Fuentes spouses.13cЃa
Unsatisfied with the CA decision, the Fuentes spouses came
to this court by petition for review.14cЃa
The Issues Presented
The case presents the following issues:
1. Whether or not Rosario's signature on the document of
consent to her husband Tarciano's sale of their conjugal land
to the Fuentes spouses was forged;
2. Whether or not the Rocas' action for the declaration of
nullity of that sale to the spouses already prescribed; and
3. Whether or not only Rosario, the wife whose consent was
not had, could bring the action to annul that sale.
The Court's Rulings
First. The key issue in this case is whether or not Rosario's
signature on the document of consent had been forged. For,
if the signature were genuine, the fact that she gave her
consent to her husband's sale of the conjugal land would
render the other issues merely academic.
The CA found that Rosario's signature had been forged. The
CA observed a marked difference between her signature on
the affidavit of consent15cЃa and her specimen
signatures.16cЃa The CA gave no weight to Atty. Plagata's
testimony that he saw Rosario sign the document in Manila
on September 15, 1988 since this clashed with his
declaration in the jurat that Rosario signed the affidavit in
Zamboanga City on January 11, 1989.
The Court agrees with the CA's observation that Rosario's
signature strokes on the affidavit appears heavy, deliberate,
and forced. Her specimen signatures, on the other hand, are
consistently of a lighter stroke and more fluid. The way the
letters "R" and "s" were written is also remarkably different.
The variance is obvious even to the untrained eye.
Significantly, Rosario's specimen signatures were made at
about the time that she signed the supposed affidavit of
consent. They were, therefore, reliable standards for
comparison. The Fuentes spouses presented no evidence
that Rosario suffered from any illness or disease that
accounted for the variance in her signature when she signed
the affidavit of consent. Notably, Rosario had been living
separately from Tarciano for 30 years since 1958. And she
resided so far away in Manila. It would have been quite
tempting for Tarciano to just forge her signature and avoid
the risk that she would not give her consent to the sale or
demand a stiff price for it.
What is more, Atty. Plagata admittedly falsified the jurat of
the affidavit of consent. That jurat declared that Rosario
swore to the document and signed it in Zamboanga City on
January 11, 1989 when, as Atty. Plagata testified, she
supposedly signed it about four months earlier at her
residence in Paco, Manila on September 15, 1988. While a
defective notarization will merely strip the document of its
public character and reduce it to a private instrument, that
falsified jurat, taken together with the marks of forgery in
the signature, dooms such document as proof of Rosario's
consent to the sale of the land. That the Fuentes spouses
honestly relied on the notarized affidavit as proof of Rosario's
consent does not matter. The sale is still void without an
authentic consent.
Second. Contrary to the ruling of the Court of Appeals, the
law that applies to this case is the Family Code, not the Civil
Code. Although Tarciano and Rosario got married in 1950,
Tarciano sold the conjugal property to the Fuentes spouses
on January 11, 1989, a few months after the Family Code
took effect on August 3, 1988.
When Tarciano married Rosario, the Civil Code put in place
the system of conjugal partnership of gains on their property
relations. While its Article 165 made Tarciano the sole
administrator of the conjugal partnership, Article
16617cЃa prohibited him from selling commonly owned real
property without his wife's consent. Still, if he sold the same
without his wife's consent, the sale is not void but merely
voidable. Article 173 gave Rosario the right to have the sale
annulled during the marriage within ten years from the date
of the sale. Failing in that, she or her heirs may demand,
after dissolution of the marriage, only the value of the
property that Tarciano fraudulently sold. Thus:
Art. 173. The wife may, during the marriage, and within ten
years from the transaction questioned, ask the courts for the
annulment of any contract of the husband entered into
without her consent, when such consent is required, or any
act or contract of the husband which tends to defraud her or
impair her interest in the conjugal partnership property.
Should the wife fail to exercise this right, she or her heirs,
after the dissolution of the marriage, may demand the value
of property fraudulently alienated by the husband.
But, as already stated, the Family Code took effect on August
3, 1988. Its Chapter 4 on Conjugal Partnership of Gains
expressly superseded Title VI, Book I of the Civil Code on
Property Relations Between Husband and Wife.18cЃa Further,
the Family Code provisions were also made to apply to
already existing conjugal partnerships without prejudice to
vested rights.19cЃa Thus:
Art. 105. x x x The provisions of this Chapter shall also apply
to conjugal partnerships of gains already established
between spouses before the effectivity of this Code, without
prejudice to vested rights already acquired in accordance
with the Civil Code or other laws, as provided in Article 256.
(n)
Consequently, when Tarciano sold the conjugal lot to the
Fuentes spouses on January 11, 1989, the law that governed
the disposal of that lot was already the Family Code.
In contrast to Article 173 of the Civil Code, Article 124 of the
Family Code does not provide a period within which the wife
who gave no consent may assail her husband's sale of the
real property. It simply provides that without the other
spouse's written consent or a court order allowing the sale,
the same would be void. Article 124 thus provides:
Art. 124. 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 the
powers of disposition or encumbrance which must have the
authority of the court or the written consent of the other
spouse. In the absence of such authority or consent, the
disposition or encumbrance shall be void. x x x
Under the provisions of the Civil Code governing contracts, a
void or inexistent contract has no force and effect from the
very beginning. And this rule applies to contracts that are
declared void by positive provision of law,20cЃa as in the case
of a sale of conjugal property without the other spouse's
written consent. A void contract is equivalent to nothing and
is absolutely wanting in civil effects. It cannot be validated
either by ratification or prescription.21cЃa
But, although a void contract has no legal effects even if no
action is taken to set it aside, when any of its terms have
been performed, an action to declare its inexistence is
necessary to allow restitution of what has been given under
it.22cЃa This action, according to Article 1410 of the Civil
Code does not prescribe. Thus:
Art. 1410. The action or defense for the declaration of the
inexistence of a contract does not prescribe.
Here, the Rocas filed an action against the Fuentes spouses
in 1997 for annulment of sale and reconveyance of the real
property that Tarciano sold without their mother's (his wife's)
written consent. The passage of time did not erode the right
to bring such an action.
Besides, even assuming that it is the Civil Code that applies
to the transaction as the CA held, Article 173 provides that
the wife may bring an action for annulment of sale on the
ground of lack of spousal consent during the marriage within
10 years from the transaction. Consequently, the action that
the Rocas, her heirs, brought in 1997 fell within 10 years of
the January 11, 1989 sale. It did not yet prescribe.
The Fuentes spouses of course argue that the RTC nullified
the sale to them based on fraud and that, therefore, the
applicable prescriptive period should be that which applies to
fraudulent transactions, namely, four years from its
discovery. Since notice of the sale may be deemed given to
the Rocas when it was registered with the Registry of Deeds
in 1989, their right of action already prescribed in 1993.
But, if there had been a victim of fraud in this case, it would
be the Fuentes spouses in that they appeared to have agreed
to buy the property upon an honest belief that Rosario's
written consent to the sale was genuine. They had four years
then from the time they learned that her signature had been
forged within which to file an action to annul the sale and get
back their money plus damages. They never exercised the
right.
If, on the other hand, Rosario had agreed to sign the
document of consent upon a false representation that the
property would go to their children, not to strangers, and it
turned out that this was not the case, then she would have
four years from the time she discovered the fraud within
which to file an action to declare the sale void. But that is not
the case here. Rosario was not a victim of fraud or
misrepresentation. Her consent was simply not obtained at
all. She lost nothing since the sale without her written
consent was void. Ultimately, the Rocas ground for
annulment is not forgery but the lack of written consent of
their mother to the sale. The forgery is merely evidence of
lack of consent.
Third. The Fuentes spouses point out that it was to Rosario,
whose consent was not obtained, that the law gave the right
to bring an action to declare void her husband's sale of
conjugal land. But here, Rosario died in 1990, the year after
the sale. Does this mean that the right to have the sale
declared void is forever lost?
The answer is no. As stated above, that sale was void from
the beginning. Consequently, the land remained the property
of Tarciano and Rosario despite that sale. When the two
died, they passed on the ownership of the property to their
heirs, namely, the Rocas.23cЃa As lawful owners, the Rocas
had the right, under Article 429 of the Civil Code, to exclude
any person from its enjoyment and disposal.
In fairness to the Fuentes spouses, however, they should be
entitled, among other things, to recover from Tarciano's
heirs, the Rocas, the P200,000.00 that they paid him, with
legal interest until fully paid, chargeable against his estate.
Further, the Fuentes spouses appear to have acted in good
faith in entering the land and building improvements on it.
Atty. Plagata, whom the parties mutually entrusted with
closing and documenting the transaction, represented that
he got Rosario's signature on the affidavit of consent. The
Fuentes spouses had no reason to believe that the lawyer
had violated his commission and his oath. They had no way
of knowing that Rosario did not come to Zamboanga to give
her consent. There is no evidence that they had a
premonition that the requirement of consent presented some
difficulty. Indeed, they willingly made a 30 percent down
payment on the selling price months earlier on the assurance
that it was forthcoming.
Further, the notarized document appears to have comforted
the Fuentes spouses that everything was already in order
when Tarciano executed a deed of absolute sale in their favor
on January 11, 1989. In fact, they paid the balance due him.
And, acting on the documents submitted to it, the Register of
Deeds of Zamboanga City issued a new title in the names of
the Fuentes spouses. It was only after all these had passed
that the spouses entered the property and built on it. He is
deemed a possessor in good faith, said Article 526 of the
Civil Code, who is not aware that there exists in his title or
mode of acquisition any flaw which invalidates it.
As possessor in good faith, the Fuentes spouses were under
no obligation to pay for their stay on the property prior to its
legal interruption by a final judgment against
them.24cЃa What is more, they are entitled under Article 448
to indemnity for the improvements they introduced into the
property with a right of retention until the reimbursement is
made. Thus:
Art. 448. The owner of the land on which anything has been
built, sown or planted in good faith, shall have the right to
appropriate as his own the works, sowing or planting, after
payment of the indemnity provided for in Articles 546 and
548, or to oblige the one who built or planted to pay the
price of the land, and the one who sowed, the proper rent.
However, the builder or planter cannot be obliged to buy the
land if its value is considerably more than that of the building
or trees. In such case, he shall pay reasonable rent, if the
owner of the land does not choose to appropriate the
building or trees after proper indemnity. The parties shall
agree upon the terms of the lease and in case of
disagreement, the court shall fix the terms thereof. (361a)
The Rocas shall of course have the option, pursuant to Article
546 of the Civil Code,25cЃa of indemnifying the Fuentes
spouses for the costs of the improvements or paying the
increase in value which the property may have acquired by
reason of such improvements.
WHEREFORE, the Court DENIES the petition and AFFIRMS
WITH MODIFICATION the decision of the Court of Appeals
in CA-G.R. CV 00531 dated February 27, 2007 as follows:
of those improvements, with the spouses entitled to the right
of retention of the land until the indemnity is made; and
5. The RTC of Zamboanga City from which this case
originated is DIRECTED to receive evidence and determine
the amount of indemnity to which petitioner spouses Manuel
and Leticia Fuentes are entitled.
SO ORDERED.

1. The deed of sale dated January 11, 1989 that Tarciano T.

Roca executed in favor of Manuel O. Fuentes, married to
Leticia L. Fuentes, as well as the Transfer Certificate of Title
T-90,981 that the Register of Deeds of Zamboanga City
issued in the names of the latter spouses pursuant to that
deed of sale are DECLARED void;

2. The Register of Deeds of Zamboanga City is DIRECTED to

reinstate Transfer Certificate of Title 3533 in the name of
Tarciano T. Roca, married to Rosario Gabriel;

3. Respondents Gonzalo G. Roca, Annabelle R. Joson, Rose

Marie R. Cristobal, and Pilar Malcampo are ORDERED to pay
petitioner spouses Manuel and Leticia Fuentes
the P200,000.00 that the latter paid Tarciano T. Roca, with
legal interest from January 11, 1989 until fully paid,
chargeable against his estate;

4. Respondents Gonzalo G. Roca, Annabelle R. Joson, Rose

Marie R. Cristobal, and Pilar Malcampo are
further ORDERED, at their option, to indemnify petitioner
spouses Manuel and Leticia Fuentes with their expenses for
introducing useful improvements on the subject land or pay
the increase in value which it may have acquired by reason
G.R. No. 206114
DOLORES ALEJO, Petitioner
vs.
SPOUSES ERNESTO CORTEZ and PRISCILLA SAN
PEDRO, SPOUSES JORGE LEONARDO and JACINTA
LEONARDO and THE REGISTER OF DEEDS OF BULACAN,
Respondents
DECISION
TIJAM, J.:
Assailed in this Petition for Review1 under Rule 45 are the
Decision2 dated October 3, 2012 and Resolution3 dated
February 26, 2013 of the Court of Appeals4 (CA) in CA-G.R.
CV No. 95432, which reversed the Decision5 of the Regional
Trial Court (R TC), 6 Branch 19 in the City of Malolos,
Bulacan. In its assailed Decision and Resolution, the CA
declared void the parties' agreement for the sale of a
conjugal property for lack of written consent of the husband.
The Facts and Antecedent Proceedings
At the heart of the instant controversy is a parcel of land
measuring 255 square meters located .at Cut-cot, Pulilan,
Bulacan and covered by Transfer Certificate of Title No. T-
118170. The property belonged to the conjugal
property/absolute community of property7 of the respondent
Spouses Jorge and Jacinta Leonardo (Spouses Leonardo) and
upon which their residential house was built.
It appears that sometime in March 1996, Jorge's father,
Ricardo, approached his sister, herein petitioner Dolores
Alejo (Dolores), to negotiate the sale of the subject
property.8 Accordingly, on March 29, 1996, Jacinta executed
a Kasunduan with Dolores for the sale of the property. for a
purchase price of PhP500,000. Under
the Kasunduan, Dolores was to pay PhP70,000 as down
payment,, while PhP230,000 is to be paid on April 30, 1996
and the remaining balance of PhP200,000 was to be paid
before the end of the year 1996.9 The Kasunduan was signed
by Jacinta and Ricardo as witness. Jorge, however, did not
sign the agreement.
It further appears that the down payment of PhP70,000 and
the PhP230,000 were paid by Dolores10 on the dates agreed
upon and thereafter, Dolores was allowed to possess the
property and introduce improvements thereon. 11
However, 9n July 3, 1996, Jorge wrote a letter to Dolores
denying knowledge and consent to the Kasunduan. Jorge
further informed Dolores that Jacinta was retracting her
consent to the Kasunduan due to Dolores' failure to comply
with her obligations. This was followed by another letter
dated September 29, 1996 from Jorge to Dolores demanding
that the latter pay the balance of PhP200,000 on or before
October 5, 1996, otherwise the purchase price shall be
increased to PhP700,000. 12 According to Dolores, she was
being compelled by Jorge to sign the agreement but that she
refused to do so. As a result, Jorge went to her house,
destroyed its water pump and disconnected the electricity.
Before· the officials of the Barangay, Dolores tendered the
balance of PhP200,000 but Jorge refused to accept the same.
Instead, Jorge filed cases for ejectment13 and annulment of
sale, reconveyance and recovery of possession14 against
her. 15 These cases were later on dismissed by the trial court
on technical grounds.
However, during the pendency of said cases, the subject
property was sold by Jorge and Jacinta to respondents
Spouses Ernesto Cortez and Priscilla San Pedro (Spouses
Cortez) under a Deed of Absolute Sale dated September 4,
1998 for a purchase price of PhP700,000. A new transfer
certificate of title was Issued in the latter's names. At the
time of said sale, Dolores was in possession of the subject
property. 16
Consequently, Dolores filed the case a quo for annulment of
deed of sale and damages against the Spouses Cortez and
the Spouses Leonardo.
The Ruling of the RTC
In its Decision, the RTC noted that while
the Kasunduan patently lacks the written consent of Jorge,
the latter's acts reveal that he later on acquiesced and
accepted the same. In particular, the RTC observed that
Jorge did not s~asonably and ~xpressly repudiate
the Kasunduan but instead demanded from Dolores
compliance therewith and that he allowed Dolores to take
possession of the property. Further, the RTC noted that the
case for annulment of sale, reconveyance and recovery of
possession filed by Jorge. against Dolores had been
dismissed and said dismissal attained finality. As such, res
judicata set in preventing Jorge from further assailing
the Kasunduan. 17
Accordingly, the RTC declared the Kasunduan as a perfected
contract and Dolores as the rightful owner of the property. It
further ordered the cancellation of titles issued in the names
of the Spouses Leonardo and the Spouses Cortez and the
issuance of a new title in the name of Dolores. Finally, the
RTC ordered Dolores to pay the balance of PhP200,000 and
the Spouses Leonardo to pay moral damages, attorney's
fees, litigation expenses and costs of suit. 18
In disposal, the RTC pronounced:
WHEREFORE, judgment is hereby rendered in favor of
plaintiff Dolores Alejo and against defendants [S]pouses
Leonardo and Cortez, as follows:
1.) Declaring the "Kasunduan" dated March 29, 1996 a
perfected contract, legal, binding and subsisting having been
accepted by defendant Jorge Leonardo;
2.) Declaring the plaintiff the true, legal and rightful owner of
the subject property;
3.) Declaring TCT Nb. 18170 in the names of Spouses Jorge
Leonardo, Jacinta Leonardo cancelled and of no legal force
and effect;
4.) Declaring TCT No. 121491 in the names of Spouses
Ernesto Cortez and Priscilla San Pedro null and void and
therefore should be ordered cancelled and of no legal force
and effect;
5.) In lieu thereof, ordering the Register of Deeds of the
Province of Bulacan to issue a new title in the name of
plaintiff Dolores Alejo;
6.) Ordering plaintiff Dolores Alejo to pay defendants
Spouses Leonardo the sum of Php200,000.00 to complete
her obligation under the "Kasunduan";
7.) Ordering defendants Spouses Leonardo to pay plaintiff
the sum of Phpl00,000.00 as and by way of moral damages;
8.) Ordering defendants Spouses Leonardo to pay plaintiff
the sum of Php50,000.00, as and by way of attorney's fees
and litigation expenses;
9.) Ordering defendants Spouses Leonardo to pay the cost of
suit.
The claim of Php500,000.00 actual damages as well as Php
100,000.00 as exemplary damages are denied for lack of
legal as well as factual basis.· All other claims and
counterclaim are denied for lack of merit.
SO ORDERED. 19
The Spouses Leonardo and the Spouses Cortez seasonably
appealed.
The Ruling of the CA
The CA granted the appeal. 20 Contrary to the findings of the
R TC, the CA held that Jorge, by imposing a new period
within which Dolores was to pay the remaining balance and
by increasing the purchase price, only qualifiedly accepted
the Kasunduan. Being a qualified acceptance, the same
partakes of a counter-offer and is a rejection of the original
offer. Consequently, the CA declared the Kasunduan as void
absent Jorge's consent and acceptance. Nevertheless, the CA
found Dolores to be a possessor in good faith who is entitled
to reimbursement for the useful improvements introduced on
the land or to the increase in the value thereof, at the option
of the Spouses Leonardo.
The CA accordingly disposed:
WHEREFORE, the appeal is hereby GRANTED. The assailed
14 January 2010 Decision of the Regional Trial Court, Branch
19 of Malolos City, Bulacan is her.eby REVERSED and SET
ASIDE. The Kasunduan dated 29 March 1996 is hereby
declared VOID. TCT No. 121491 in the names of Spouses
Cortez and San Pedro is hereby declared VALID
and SUBSISTING. Appellants Spouses Leonardo are
ORDERED to reimburse Dolores Alejo the amount of
Php300,000.00 that the latter paid to Jacinta Leonardo, with
legal interest until fully paid. Appellants Spouses Leonardo
are likewise ORDERED, at their option, to indemnify Dolores
Alejo with her expenses for introducing useful improvements
on the subject land or pay the increase in value which it may
have acquired by reason of those improvements, with Alejo
entitled to the right of retention of the land until the
indemnity is made. Finally, the Regional Trial Court of
Malolos City, Bulacan from which this case originated is
DIRECTED to receive evidence and determine the amount of
indemnity to which appellee Dolores Alejo is entitled.
SO ORDERED.21
Dolores' motion for reconsideration was denied, hence the
instant petition.
The Issues
Dolores argues that the Spouses Leonardo's and Spouses
Cortez' appeals ought to have been outrightly dismissed for
failure to comply with the requirements of Section 13, Rule
44. On the substantive issue, Dolores · maintains that
the Kasunduan is a perfected and binding contract as it was
accepted by Jorge through his overt acts. She also argues
that the dismissal of Jorge's complaint for annulment of sale
constitutes res judicata thus preventing Jorge from further
questioning the validity of the Kasunduan. Finally, she
contends that the Spouses Cortez were not buyers in good
faith as they knew that the property was being occupied by
other persons.
The Ruling of this Court
The petition is denied.
Dismissal of Appeal Lies within the Sound Discretion of the
Appellate Court
Technically, the CA may dismiss the appeal for failure to
comply with the requirements under Sec. 13, Rule 44. Thus,
Section 1, Rule 50 provides that an appeal may be dismissed
by the Court of Appeals, on its own motion or on that of the
appellee upon the ground, among others, of absence of
specific assignment of errors in the appellant's brief, or of
page references to the record.
Nevertheless, it has been consistently held that such
provision confers a power, not a duty, on the appellate
court.22The dismissal is directory, not mandatory, and as
such, not a ministerial duty of the appellate court.23 In other
words, the CA enjoys ample discretion to dismiss or not to
dismiss the appeal. What is more, the exercise of such
discretion is presumed to have been sound and regular and it
is thus incumbent upon Dolores to offset such presumption.
Yet, the records before this Court do not satisfactorily show
that the CA has gravely abused its discretion in not
dismissing the Spouses Leonardo's and Spouses Cortez'
appeals.
On the contrary, We are of the view that the ends of justice
will be better served if the instant case is determined on the
merits, after full opportunity to ventilate their respective
claims and defenses is afforded to all parties. After all, it is
far better to decide a case on the merits, as the ultimate
end, rather on a technicality.
The key issue in this case is whether the Kasunduan for the
sale of a conjugal real property between Jacinta and Dolores
as a continuing offer has been converted to a perfected and
binding contract. For, if Jorge has not accepted or consented
to the said sale, the Kasunduan is considered void rendering
the other issues raised herein merely academic.
Sale by one Spouse of Conjugal Real Property is Void
Without the Written Consent of the other Spouse
Any alienation or encumbrance of conjugal property made
during the effectivity of the Family Code is governed by
Article 124 thereof which provides:
Article 124. The administration and enjoyment of the
conjugal partnership property shall belong to both spouses
jointly. In case of disagreement, the husband's decision shall
prevail, subject to recourse to the court by the wife for
proper remedy, which must be availed of within five years
from the date of the contract implementing such decision.
In the event that one spouse is incapacitated or otherwise
unable to participate in the administration of the conjugal
properties, the other spouse may assume sole powers of
administration. These powers do not include disposition or
encumbrance without authority of the court or the written
consent of the other spouse. In the absence of such
authority or consent, the disposition or encumbrance shall be
void. However, the transaction shall be construed as a
continuing offer on the part of the consenting spouse and the
third person, and may be perfected as a binding contract
upon the acceptance by the other spouse or authorization by
the court before the offer is withdrawn by either or both
offerors. (Emphasis supplied.)
The law is therefore unequivocal when it states that the
disposition of conjugal property of one spouse sans the
written consent of the other is void. Here, it is an established
fact that the Kasunduan was entered into solely by Jacinta
and signed by her alone. By plain terms of the law therefore,
the Kasunduan is void.
Nevertheless, We agree with the RTC and the CA when it
held that the void Kasunduan constitutes a continuing offer
from Jacinta and Dolores and that Jorge had the option of
either accepting or rejecting the offer before it was
withdrawn by either, or both, Jacinta and Dolores.
The point of contention is whether Jorge accepted such
continuing offer. If so, then the Kasunduan is perfected as a
binding contract; otherwise, the Kasunduan remains void .
The RTC opined that Jorge's failure to expressly repudiate
the Kasunduan and his demand that Dolores comply with her
undertakings therein show Jorge's acceptance of the sale of
the conjugal property. On the other hand, the CA noted that
in varying the terms of the Kasunduan, i.e., in the time of
payment and the purchase price, Jorge is deemed to have
only qualifiedly accepted the same.1âwphi1
We agree with the CA.
It is undisputed that after the execution of
the Kasunduan, Jorge sent two letters to Dolores: one, in
forming her that he did not consent to the sale; and the
other, demanding that' Dolores pay the balance of the
purchase price on or before October 5, 1996 and failing
which, the purchase price shall be increased to PhP700,000.
Clearly, Jorge's first letter was an outright and express
repudiation of the Kasunduan. The second letter, while
ostensibly a demand for compliance with Dolores' obligation
under the Kasunduan, varied its terms on material
points, i.e., the date of payment of the balance and the
purchase price. Consequently, such counter-offer cannot be
construed as evidencing Jorge's consent to or acceptance of
the Kasunduan for it is settled that where the other spouse's
putative consent to the sale of the conjugal property appears
in a separate document which does not contain the same
terms and conditions as in the first document signed by the
other spouse, a valid transaction could not have arisen.24
Neither can Jorge's subsequent letters to Dolores be treated
as a ratification of the Kasunduan for the basic reason that a
void contract is not susceptible to ratification. Nor can
Jorge's alleged participation in the negotiation for the sale of
the property or his acquiescence to Dolores' transfer to and
possession of the subject property be treated as converting·
such continuing offer into a binding contract as the law
distinctly requires nothing less than a written consent to the
sale for its validity. Suffice to say that participation in or
awareness of the negotiations is not consent. 25
As above intimated, a determination that the Kasunduan is
void renders the other issues raised by Dolores
academic, i.e., whether the doctrine of res judicata applies
and whether the Spouses Cortez are buyers in bad faith;
hence they merit no further discussion .
The CA Correctly Ruled that Dolores is a Possessor in Good
Faith
While the Kasunduan was void from the beginning, Dolores
is, in all fairness, entitled to recover from the Spouses
Leonardo the amount of PhP300,000 with legal Interest until
fully paid.
Moreover, the CA correctly appreciated Dolores' standing as
a possessor in good faith. It appears that Dolores acted in
good faith in entering the subject property and building
improvements on it. Ricardo represented that "Jacinta and
Jorge wanted to sell the subject property. Dolores had no
reason to believe that Ricardo and Jacinta were lying.
Indeed, upon her own brother's prodding, Dolores willingly
parted with her money and paid the down payment on the
selling price and later, a portion of the remaining balance.
The signatures of Jacinta and of Ricardo (as witness) as well
as her successful entry to the property appear to have
comforted Dolores that everything was in order. Article 526
of the Civil Code provides that she is deemed a possessor in
good faith, who is not aware that there exists in her title or
mode of acquisition any flaw that invalidates it.
WHEREFORE, the petition is DENIED. The Decision dated
October 3, 2012 and Resolution dated February 26, 2013 of
the Court of Appeals in CA G.R. CV No. 95432 which (1)
declared void the Kasunduan dated 29 March 1996; (2)
declared valid the title issued in the names of Spouses
Cortez and San Pedro; (3) ordered the reimbursement of
PhP300,000 with legal interest to Dolores Alejo; (3) ordered
the Spouses
Leonardo, at their option, to indemnify Dolores Alejo of her
expenses on the useful improvements or pay the increase in
value on the subject property, with retention rights until
indemnity is made; and (4) remanded the case to the RTC
for purposes of receiving evidence and determining the
amount of said indemnity are AFFIRMED in toto.
SO ORDERED

Likewise, as correctly held by the CA, Dolores, as possessor

in good faith, is under no obligation to pay for her stay on
the property prior to its legal interruption by a final
judgment. She is further entitled under Article 448 to
indemnity for the improvements introduced on the property
with a right of retention until reimbursement is made. The
Spouses Leonardo have the option under Article 546 of the
Civil Code of indemnifying Dolores for the cost of the
improvements or paying the increase in value which the
property may have acquired by reason of such
improvements. 26
 G.R. NO. 166496 : November 9, 2006]
JOSEFA BAUTISTA FERRER, Petitioner, v. SPS. MANUEL
M. FERRER & VIRGINIA FERRER and SPS. ISMAEL M.
FERRER and FLORA FERRER, Respondents.
DECISION
CHICO-NAZARIO, J.:
Before this Court is an Appeal by Certiorari which assails the
Decision1 of the Court of Appeals dated 16 August 2004 in
CA-G.R. SP No. 78525, reversing and setting aside the
Order2 dated 16 December 2002 of the Regional Trial Court
(RTC), Mandaluyong City, Branch 212 in Civil Case No.
MC02-1780. The Court of Appeals ordered the dismissal of
the Complaint3 filed by petitioner Josefa Bautista Ferrer
against respondents Sps. Manuel M. Ferrer and Virginia
Ferrer, and Sps. Ismael M. Ferrer and Flora Ferrer in the
aforesaid Civil Case No. MC02-1780.
In her Complaint for payment of conjugal improvements,
sum of money, and accounting with prayer for injunction and
damages, petitioner alleged that she is the widow of Alfredo
Ferrer (Alfredo), a half-brother of respondents Manuel M.
Ferrer (Manuel) and Ismael M. Ferrer (Ismael). Before her
marriage to Alfredo, the latter acquired a piece of lot,
covered by Transfer Certificate of Title (TCT) No. 67927.4 He
applied for a loan with the Social Security System (SSS) to
build improvements thereon, including a residential house
and a two-door apartment building. However, it was during
their marriage that payment of the loan was made using the
couple's conjugal funds. From their conjugal funds, petitioner
posited, they constructed a warehouse on the lot. Moreover,
petitioner averred that respondent Manuel occupied one door
of the apartment building, as well as the warehouse;
however, in September 1991, he stopped paying rentals
thereon, alleging that he had acquired ownership over the
property by virtue of a Deed of Sale executed by Alfredo in
favor of respondents, Manuel and Ismael and their spouses.
TCT No. 67927 was cancelled, and TCT. No. 2728 was issued
and registered in the names of respondents.
It is petitioner's contention that on 2 October 1989, when
her husband was already bedridden, respondents Ismael and
Flora Ferrer made him sign a document, purported to be his
last will and testament. The document, however, was a Deed
of Sale covering Alfredo's lot and the improvements thereon.
Learning of this development, Alfredo filed with the RTC of
Pasig, a Complaint for Annulment of the said sale against
respondents, docketed as Civil Case No. 61327.5 On 22 June
1993, the RTC dismissed the same.6 The RTC found that the
terms and conditions of the Deed of Sale are not contrary to
law, morals, good customs, and public policy, and should be
complied with by the parties in good faith, there being no
compelling reason
under the law to do otherwise. The dismissal was affirmed by
the Court of Appeals. Subsequently, on 7 November 1994,
this Court, in G.R. No. L-117067, finding no reversible error
committed by the appellate court in affirming the dismissal
of the RTC, affirmed the Decision of the Court of Appeals.7
Further, in support of her Complaint, petitioner alluded to a
portion of the Decision dated 22 June 1993 of the RTC in
Civil Case No. 61327, which stated, to wit:
In determining which property is the principal and which is
the accessory, the property of greater value shall be
considered the principal. In this case, the lot is the principal
and the improvements the accessories. Since Article 120 of
the Family Code provides the rule that the ownership of
accessory follows the ownership of the principal, then the
subject lot with all its improvements became an exclusive
and capital property of Alfredo with an obligation to
reimburse the conjugal partnership of the cost of
improvements at the time of liquidation of [the] conjugal
partnership. Clearly, Alfredo has all the rights to sell the
subject property by himself without need of Josefa's
consent.8
According to petitioner, the ruling of the RTC shows that,
when Alfredo died on 29 September 1999, or at the time of
the liquidation of the conjugal partnership, she had the right
to be reimbursed for the cost of the improvements on
Alfredo's lot. She alleged that the cost of the improvements
amounted to P500,000.00; hence, one-half thereof should be
reimbursed and paid by respondents as they are now the
registered owners of Alfredo's lot. She averred that
respondents cannot claim lack of knowledge about the fact
that the improvements were constructed using conjugal
funds as they had occupied one of the apartment buildings
on Alfredo's lot, and even paid rentals to petitioner. In
addition, petitioner prayed that respondents be ordered to
render an accounting from September, 1991, on the income
of the boarding house constructed thereon which they had
appropriated for themselves, and to remit one-half thereof as
her share. Finally, petitioner sought from respondents moral
and exemplary damages, litigation and incidental expenses.
For their part, respondents filed a Motion to
Dismiss,9 contending that petitioner had no cause of action
against them, and that the cause of action was barred by
prior judgment.
On 16 December 2002, the RTC rendered an
Order,10 denying the Motion to Dismiss. According to the
RTC, no pronouncement as to the improvements constructed
on Alfredo's lot has been made in Civil Case No. 61327, and
the payment of petitioner's share in the conjugal partnership
constitutes a separate cause of action. A subsequent
Order11dated 17 January 2003 was issued by the RTC,
denying respondents' Motion for Reconsideration.
Aggrieved, respondents elevated the case to the Court of
Appeals by way of a Petition for Certiorari, alleging grave
abuse of discretion amounting to lack or excess of
jurisdiction on the RTC in denying the dismissal.
On 16 August 2004, the Court of Appeals rendered a
Decision granting the Petition. It held that petitioner's
Complaint failed to state a cause of action. The appellate
court rationalized as follows:
[W]e believe that the instant complaint is not the proper
action for the respondent to enforce her right of
reimbursement of the cost of the improvement[s] on the
subject property. As correctly pointed out by the petitioners,
the same should be made and directed in the settlement of
estate of her deceased husband Alfredo Ferrer pursuant to
Article 12912of the Family Code. Such being the case, it
appears that the complaint herein fails to state a cause of
action against the petitioners, the latter not being the proper
parties against whom the subject action for reimbursement
must be directed to. A complaint states a cause of action
where it contains three essential elements of a cause of
action, namely: (1) the legal right of the plaintiff; (2) the
correlative obligation of the defendant, and (3) the act or
omission of the defendant in violation of said legal right. If
these elements are absent, the complaint becomes
vulnerable to a motion to dismiss on the ground of failure to
state a cause of action. Albeit the respondent herein has the
legal right to be reimbursed of the cost of the improvements
of the subject property, it is not the petitioners but the
estate of her deceased husband which has the obligation to
pay the same. The complaint herein is therefore dismissible
for failure to state a cause of action against the petitioners.
Needless to say, the respondent is not without any further
recourse as she may file her claim against the estate of her
deceased husband.
In light of the foregoing, we find that the public respondent
committed grave abuse of discretion in denying the
petitioners' motion to dismiss for failure to state a cause of
action.13
Aggrieved, petitioner filed a Motion for Reconsideration
thereon. However, on 17 December 2004, the Court of
Appeals rendered a Resolution14denying the motion.
Hence, the present recourse.
Petitioner submits the following grounds for the allowance of
the instant Petition, to wit:
A. THE HONORABLE COURT OF APPEALS ERRED IN RULING
THAT PETITIONER'S COMPLAINT FAILS TO STATE A CAUSE
OF ACTION AGAINST THE RESPONDENTS, THE LATTER NOT
BEING THE PROPER PARTIES AGAINST WHOM THE SUBJECT
ACTION FOR REIMBURSEMENT MUST BE DIRECTED TO.
B. THE HONORABLE COURT OF APPEALS ERRED IN RULING
THAT THE PUBLIC RESPONDENT, HON. RIZALINA T. CAPCO-
UMALI, COMMITTED GRAVE ABUSE OF DISCRETION IN
DENYING THE [RESPONDENTS'] MOTION TO DISMISS FOR
FAILURE TO STATE A CAUSE OF ACTION.15
Both arguments raise the sole issue of whether the Court of
Appeals erred in dismissing petitioner's Complaint for failure
to state a cause of action.
Section 1(g) Rule 1616 of the 1997 Rules of Civil Procedure
makes it clear that failure to make a sufficient allegation of a
cause of action in the complaint warrants the dismissal
thereof. Section 2, Rule 2 of the 1997 Rules of Civil
Procedure defines a cause of action as the act or omission by
which a party violates the right of another. It is the delict or
the wrongful act or omission committed by the defendant in
violation of the primary right of the plaintiff.17
A cause of action has the following essential elements, viz:
(1) A right in favor of the plaintiff by whatever means and
under whatever law it arises or is created;
(2) An obligation on the part of the named defendant to
respect or not to violate such right; andcralawlibrary
(3) Act or omission on the part of such defendant in violation
of the right of the plaintiff or constituting a breach of the
obligation of the defendant to the plaintiff for which the latter
may maintain an action for recovery of damages or other
appropriate relief.18
A complaint states a cause of action only when it has the
three indispensable elements.19
In the determination of the presence of these elements,
inquiry is confined to the four corners of the complaint. Only
the statements in the Complaint may be properly
considered.20 The absence of any of these elements makes a
complaint vulnerable to a Motion to Dismiss on the ground of
a failure to state a cause of action.21
After a reading of the allegations contained in petitioner's
Complaint, we are convinced that the same failed to state a
cause of action.
In the case at bar, petitioner asserts a legal right in her favor
by relying on the Decision of the RTC in Civil Case No.
61327. It can be recalled that the aforesaid case is an action
for Annulment filed by Alfredo and petitioner against the
respondents to seek annulment of the Deed of Sale,
executed by Alfredo in respondents' favor and covering the
herein subject premises. The Complaint was dismissed by
the RTC, and subsequently affirmed by the Court of Appeals
and by this Court in G.R. No. L-117067.
According to petitioner, while the RTC in Civil Case No.
61327 recognized that the improvements constructed on
Alfredo's lots were deemed as Alfredo's exclusive and capital
property, the court also held that petitioner, as Alfredo's
spouse, has the right to claim reimbursement from the
estate of Alfredo. It is argued by petitioner that her husband
had no other property, and his only property had been sold
to the respondents; hence, she has the legal right to claim
for reimbursement from the respondents who are now the
owners of the lot and the improvements thereon. In fine,
petitioner asseverates that the Complaint cannot be
dismissed on the ground of failure to state a cause of action
because the respondents have the correlative obligation to
pay the value of the improvements.
Petitioner was not able to show that there is an obligation on
the part of the respondents to respect or not to violate her
right. While we could concede that Civil Case No. 61327
made a reference to the right of the spouse as contemplated
in Article 12022 of the Family Code to be reimbursed for the
cost of the improvements, the obligation to reimburse rests
on the spouse upon whom ownership of the entire property
is vested. There is no obligation on the part of the purchaser
of the property, in case the property is sold by the owner-
spouse.
Indeed, Article 120 provides the solution in determining the
ownership of the improvements that are made on the
separate property of the spouses at the expense of the
partnership or through the acts or efforts of either or both
spouses. Thus, when the cost of the improvement and any
resulting increase in value are more than the value of the
property at the time of the improvement, the entire property
of one of the spouses shall belong to the conjugal
partnership, subject to reimbursement of the value of the
property of the owner-spouse at the time of the
improvement; otherwise, said property shall be retained in
ownership by the owner-spouse, likewise subject to
reimbursement of the cost of the improvement. The subject
property was precisely declared as the exclusive property of
Alfredo on the basis of Article 120 of the Family Code.
What is incontrovertible is that the respondents, despite the
allegations contained in the Complaint that they are the
buyers of the subject premises, are not petitioner's spouse
nor can they ever be deemed as the owner-spouse upon
whom the obligation to reimburse petitioner for her costs
rested. It is the owner-spouse who has the obligation to
reimburse the conjugal partnership or the spouse who
expended the acts or efforts, as the case may be. Otherwise
stated, respondents do not have the obligation to respect
petitioner's right to be reimbursed.

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

of respondents in violation of petitioner's rights. The right of
the respondents to acquire as buyers the subject premises
from Alfredo under the assailed Deed of Sale in Civil Case
No. 61327 had been laid to rest. This is because the validity
of the Deed of Sale had already been determined and upheld
with finality. The same had been similarly admitted by
petitioner in her Complaint. It can be said, thus, that
respondents' act of acquiring the subject property by sale
was not in violation of petitioner's rights. The same can also
be said of the respondents' objection to reimburse petitioner.
Simply, no correlative obligation exists on the part of the
respondents to reimburse the petitioner. Corollary thereto,
neither can it be said that their refusal to reimburse
constituted a violation of petitioner's rights. As has been
shown in the foregoing, no obligation by the respondents
under the law exists. Petitioner's Complaint failed to state a
cause of action against the respondents, and for this reason,
the Court of Appeals was not in error in dismissing the same.

WHEREFORE, the Petition is DENIED. The Decision dated 16

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

SO ORDERED.
G.R. No. 149615 August 29, 2006
IN RE: PETITION FOR SEPARATION OF PROPERTY
ELENA BUENAVENTURA MULLER, Petitioner,
vs.
HELMUT MULLER, Respondent.
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari 1 assails the February
26, 2001 Decision 2 of the Court of Appeals in CA-G.R. CV
No. 59321 affirming with modification the August 12, 1996
Decision 3 of the Regional Trial Court of Quezon City, Branch
86 in Civil Case No. Q-94-21862, which terminated the
regime of absolute community of property between petitioner
and respondent, as well as the Resolution 4 dated August 13,
2001 denying the motion for reconsideration.
The facts are as follows:
Petitioner Elena Buenaventura Muller and respondent Helmut
Muller were married in Hamburg, Germany on September
22, 1989. The couple resided in Germany at a house owned
by respondent’s parents but decided to move and reside
permanently in the Philippines in 1992. By this time,
respondent had inherited the house in Germany from his
parents which he sold and used the proceeds for the
purchase of a parcel of land in Antipolo, Rizal at the cost of
P528,000.00 and the construction of a house amounting to
P2,300,000.00. The Antipolo property was registered in the
name of petitioner under Transfer Certificate of Title No.
219438 5 of the Register of Deeds of Marikina, Metro Manila.
Due to incompatibilities and respondent’s alleged
womanizing, drinking, and maltreatment, the spouses
eventually separated. On September 26, 1994, respondent
filed a petition 6 for separation of properties before the
Regional Trial Court of Quezon City.
On August 12, 1996, the trial court rendered a decision
which terminated the regime of absolute community of
property between the petitioner and respondent. It also
decreed the separation of properties between them and
ordered the equal partition of personal properties located
within the country, excluding those acquired by gratuitous
title during the marriage. With regard to the Antipolo
property, the court held that it was acquired using
paraphernal funds of the respondent. However, it ruled that
respondent cannot recover his funds because the property
was purchased in violation of Section 7, Article XII of the
Constitution. Thus –
However, pursuant to Article 92 of the Family Code,
properties acquired by gratuitous title by either spouse
during the marriage shall be excluded from the community
property. The real property, therefore, inherited by petitioner
in Germany is excluded from the absolute community of
property of the herein spouses. Necessarily, the proceeds of
the sale of said real property as well as the personal
properties purchased thereby, belong exclusively to the
petitioner. However, the part of that inheritance used by the
petitioner for acquiring the house and lot in this country
cannot be recovered by the petitioner, its acquisition being a
violation of Section 7, Article XII of the Constitution which
provides that "save in cases of hereditary succession, no
private lands shall be transferred or conveyed except to
individuals, corporations or associations qualified to acquire
or hold lands of the public domain." The law will leave the
parties in the situation where they are in without prejudice to
a voluntary partition by the parties of the said real property.
xxx
xxxx
As regards the property covered by Transfer Certificate of
Title No. 219438 of the Registry of Deeds of Marikina, Metro
Manila, situated in Antipolo, Rizal and the improvements
thereon, the Court shall not make any pronouncement on
constitutional grounds. 7
Respondent appealed to the Court of Appeals which rendered
the assailed decision modifying the trial court’s Decision. It
held that respondent merely prayed for reimbursement for
the purchase of the Antipolo property, and not acquisition or
transfer of ownership to him. It also considered petitioner’s
ownership over the property in trust for the respondent. As
regards the house, the Court of Appeals ruled that there is
nothing in the Constitution which prohibits respondent from
acquiring the same. The dispositive portion of the assailed
decision reads:
WHEREFORE, in view of the foregoing, the Decision of the
lower court dated August 12, 1996 is hereby MODIFIED.
Respondent Elena Buenaventura Muller is hereby ordered to
REIMBURSE the petitioner the amount of P528,000.00 for
the acquisition of the land and the amount of P2,300,000.00
for the construction of the house situated in Atnipolo, Rizal,
deducting therefrom the amount respondent spent for the
preservation, maintenance and development of the aforesaid
real property including the depreciation cost of the house or
in the alternative to SELL the house and lot in the event
respondent does not have the means to reimburse the
petitioner out of her own money and from the proceeds
thereof, reimburse the petitioner of the cost of the land and
the house deducting the expenses for its maintenance and
preservation spent by the respondent. Should there be profit,
the same shall be divided in proportion to the equity each
has over the property. The case is REMANDED to the lower
court for reception of evidence as to the amount claimed by
the respondents for the preservation and maintenance of the
property.
SO ORDERED. 8
Hence, the instant petition for review raising the following
issues:
I
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
HOLDING THAT THE RESPONDENT HEREIN IS ENTITLED TO
REIMBURSEMENT OF THE AMOUNT USED TO PURCHASE THE
LAND AS WELL AS THE COSTS FOR THE CONSTRUCTION OF
THE HOUSE, FOR IN SO RULING, IT INDIRECTLY ALLOWED
AN ACT DONE WHICH OTHERWISE COULD NOT BE DIRECTLY
x x x DONE, WITHOUT DOING VIOLENCE TO THE
CONSTITUTIONAL PROSCRIPTION THAT AN ALIEN IS
PROHIBITED FROM ACQUIRING OWNERSHIP OF REAL
PROPERTIES LOCATED IN THE PHILIPPINES.
II
THE COURT OF APPEALS GRAVELY ERRED IN SUSTAINING
RESPONDENT’S CAUSE OF ACTION WHICH IS ACTUALLY A
DESPERATE ATTEMPT TO OBTAIN OWNERSHIP OVER THE
LOT IN QUESTION, CLOTHED UNDER THE GUISE OF
CLAIMING REIMBURSEMENT.
Petitioner contends that respondent, being an alien, is
disqualified to own private lands in the Philippines; that
respondent was aware of the constitutional prohibition but
circumvented the same; and that respondent’s purpose for
filing an action for separation of property is to obtain
exclusive possession, control and disposition of the Antipolo
property.
Respondent claims that he is not praying for transfer of
ownership of the Antipolo property but merely
reimbursement; that the funds paid by him for the said
property were in consideration of his marriage to petitioner;
that the funds were given to petitioner in trust; and that
equity demands that respondent should be reimbursed of his
personal funds.
The issue for resolution is whether respondent is entitled to
reimbursement of the funds used for the acquisition of the
Antipolo property.
The petition has merit.
Section 7, Article XII of the 1987 Constitution states:
Save in cases of hereditary succession, no private lands shall
be transferred or conveyed except to individuals,
corporations, or associations qualified to acquire or hold
lands of the public domain.
Aliens, whether individuals or corporations, are disqualified
from acquiring lands of the public domain. Hence, they are
also disqualified from acquiring private lands. 9 The primary
purpose of the constitutional provision is the conservation of
the national patrimony. In the case of Krivenko v. Register of
Deeds, 10 the Court held:
Under section 1 of Article XIII of the Constitution, "natural
resources, with the exception of public agricultural land, shall
not be alienated," and with respect to public agricultural
lands, their alienation is limited to Filipino citizens. But this
constitutional purpose conserving agricultural resources in
the hands of Filipino citizens may easily be defeated by the
Filipino citizens themselves who may alienate their
agricultural lands in favor of aliens. It is partly to prevent
this result that section 5 is included in Article XIII, and it
reads as follows:
"Sec. 5. Save in cases of hereditary succession, no private
agricultural land will be transferred or assigned except to
individuals, corporations, or associations qualified to acquire
or hold lands of the public domain in the Philippines."
This constitutional provision closes the only remaining
avenue through which agricultural resources may leak into
aliens’ hands. It would certainly be futile to prohibit the
alienation of public agricultural lands to aliens if, after all,
they may be freely so alienated upon their becoming private
agricultural lands in the hands of Filipino citizens. x x x
xxxx
If the term "private agricultural lands" is to be construed as
not including residential lots or lands not strictly agricultural,
the result would be that "aliens may freely acquire and
possess not only residential lots and houses for themselves
but entire subdivisions, and whole towns and cities," and that
"they may validly buy and hold in their names lands of any
area for building homes, factories, industrial plants, fisheries,
hatcheries, schools, health and vacation resorts, markets,
golf courses, playgrounds, airfields, and a host of other uses
and purposes that are not, in appellant’s words, strictly
agricultural." (Solicitor General’s Brief, p. 6.) That this is
obnoxious to the conservative spirit of the Constitution is
beyond question.
Respondent was aware of the constitutional prohibition and
expressly admitted his knowledge thereof to this Court.11 He
declared that he had the Antipolo property titled in the name
of petitioner because of the said prohibition. 12His attempt at
subsequently asserting or claiming a right on the said
property cannot be sustained.
The Court of Appeals erred in holding that an implied trust
was created and resulted by operation of law in view of
petitioner’s marriage to respondent. Save for the exception
provided in cases of hereditary succession, respondent’s
disqualification from owning lands in the Philippines is
absolute. Not even an ownership in trust is allowed. Besides,
where the purchase is made in violation of an existing
statute and in evasion of its express provision, no trust can
result in favor of the party who is guilty of the fraud. 13 To
hold otherwise would allow circumvention of the
constitutional prohibition.
Invoking the principle that a court is not only a court of law
but also a court of equity, is likewise misplaced. It has been
held that equity as a rule will follow the law and will not
permit that to be done indirectly which, because of public
policy, cannot be done directly. 14 He who seeks equity must
do equity, and he who comes into equity must come with
clean hands. The latter is a frequently stated maxim which is
also expressed in the principle that he who has done inequity
shall not have equity. It signifies that a litigant may be
denied relief by a court of equity on the ground that his
conduct has been inequitable, unfair and dishonest, or
fraudulent, or deceitful as to the controversy in issue. 15
Thus, in the instant case, respondent cannot seek
reimbursement on the ground of equity where it is clear that
he willingly and knowingly bought the property despite the
constitutional prohibition.
Further, the distinction made between transfer of ownership
as opposed to recovery of funds is a futile exercise on
respondent’s part. To allow reimbursement would in effect
permit respondent to enjoy the fruits of a property which he
is not allowed to own. Thus, it is likewise proscribed by law.
As expressly held in Cheesman v. Intermediate Appellate
Court: 16
Finally, the fundamental law prohibits the sale to aliens of
residential land. Section 14, Article XIV of the 1973
Constitution ordains that, "Save in cases of hereditary
succession, no private land shall be transferred or conveyed
except to individuals, corporations, or associations qualified
to acquire or hold lands of the public domain." Petitioner
Thomas Cheesman was, of course, charged with knowledge
of this prohibition. Thus, assuming that it was his intention
that the lot in question be purchased by him and his wife, he
acquired no right whatever over the property by virtue of
that purchase; and in attempting to acquire a right or
interest in land, vicariously and clandestinely, he knowingly
violated the Constitution; the sale as to him was null and
void. In any event, he had and has no capacity or personality
to question the subsequent sale of the same property by his
wife on the theory that in so doing he is merely exercising
the prerogative of a husband in respect of conjugal property.
To sustain such a theory would permit indirect controversion
of the constitutional prohibition. If the property were to be
declared conjugal, this would accord to the alien husband a
not insubstantial interest and right over land, as he would
then have a decisive vote as to its transfer or disposition.
This is a right that the Constitution does not permit him to
have.

As already observed, the finding that his wife had used her
own money to purchase the property cannot, and will not, at
this stage of the proceedings be reviewed and overturned.
But even if it were a fact that said wife had used conjugal
funds to make the acquisition, the considerations just set out
to militate, on high constitutional grounds, against his
recovering and holding the property so acquired, or any part
thereof. And whether in such an event, he may recover from
his wife any share of the money used for the purchase or
charge her with unauthorized disposition or expenditure of
conjugal funds is not now inquired into; that would be, in the
premises, a purely academic exercise. (Emphasis added)

WHEREFORE, in view of the foregoing, the instant petition is

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

SO ORDERED.
G.R. No. 157537 September 7, 2011
THE HEIRS OF PROTACIO GO, SR. and MARTA BAROLA,
namely: LEONOR, SIMPLICIO, PROTACIO, JR.,
ANTONIO, BEVERLY ANN LORRAINNE, TITA,
CONSOLACION, LEONORA and ASUNCION, all
surnamed GO, represented by LEONORA B.
GO, Petitioners,
vs.
ESTER L. SERVACIO and RITO B. GO, Respondents.
DECISION
BERSAMIN, J.:
The disposition by sale of a portion of the conjugal property
by the surviving spouse without the prior liquidation
mandated by Article 130 of the Family Code is not
necessarily void if said portion has not yet been allocated by
judicial or extrajudicial partition to another heir of the
deceased spouse. At any rate, the requirement of prior
liquidation does not prejudice vested rights.
Antecedents
On February 22, 1976, Jesus B. Gaviola sold two parcels of
land with a total area of 17,140 square meters situated in
Southern Leyte to Protacio B. Go, Jr. (Protacio, Jr.). Twenty
three years later, or on March 29, 1999, Protacio, Jr.
executed an Affidavit of Renunciation and Waiver,1 whereby
he affirmed under oath that it was his father, Protacio Go,
Sr. (Protacio, Sr.), not he, who had purchased the two
parcels of land (the property).
On November 25, 1987, Marta Barola Go died. She was the
wife of Protacio, Sr. and mother of the petitioners.2 On
December 28, 1999, Protacio, Sr. and his son Rito B. Go
(joined by Rito’s wife Dina B. Go) sold a portion of the
property with an area of 5,560 square meters to Ester L.
Servacio (Servacio) for ₱5,686,768.00.3 On March 2, 2001,
the petitioners demanded the return of the property,4 but
Servacio refused to heed their demand. After barangay
proceedings failed to resolve the dispute,5 they sued
Servacio and Rito in the Regional Trial Court in Maasin City,
Southern Leyte (RTC) for the annulment of the sale of the
property.
The petitioners averred that following Protacio, Jr.’s
renunciation, the property became conjugal property; and
that the sale of the property to Servacio without the prior
liquidation of the community property between Protacio, Sr.
and Marta was null and void.6
Servacio and Rito countered that Protacio, Sr. had
exclusively owned the property because he had purchased it
with his own money.7
On October 3, 2002,8 the RTC declared that the property was
the conjugal property of Protacio, Sr. and Marta, not the
exclusive property of Protacio, Sr., because there were three
vendors in the sale to Servacio (namely: Protacio, Sr., Rito,
and Dina); that the participation of Rito and Dina as vendors
had been by virtue of their being heirs of the late Marta; that
under Article 160 of the Civil Code, the law in effect when
the property was acquired, all property acquired by either
spouse during the marriage was conjugal unless there was
proof that the property thus acquired pertained exclusively to
the husband or to the wife; and that Protacio, Jr.’s
renunciation was grossly insufficient to rebut the legal
presumption.9
Nonetheless, the RTC affirmed the validity of the sale of the
property, holding that: "xxx As long as the portion sold,
alienated or encumbered will not be allotted to the other
heirs in the final partition of the property, or to state it
plainly, as long as the portion sold does not encroach upon
the legitimate (sic) of other heirs, it is valid."10 Quoting
Tolentino’s commentary on the matter as authority,11 the
RTC opined:
In his comment on Article 175 of the New Civil Code
regarding the dissolution of the conjugal partnership,
Senator Arturo Tolentino, says" [sic]
"Alienation by the survivor. — After the death of one of the
spouses, in case it is necessary to sell any portion of the
community property in order to pay outstanding obligation of
the partnership, such sale must be made in the manner and
with the formalities established by the Rules of Court for the
sale of the property of the deceased persons. Any sale,
transfer, alienation or disposition of said property affected
without said formalities shall be null and void, except as
regards the portion that belongs to the vendor as determined
in the liquidation and partition. Pending the liquidation, the
disposition must be considered as limited only to the
contingent share or interest of the vendor in the particular
property involved, but not to the corpus of the property.
This rule applies not only to sale but also to mortgages. The
alienation, mortgage or disposal of the conjugal property
without the required formality, is not however, null ab initio,
for the law recognizes their validity so long as they do not
exceed the portion which, after liquidation and partition,
should pertain to the surviving spouse who made the
contract." [underlining supplied]
It seems clear from these comments of Senator Arturo
Tolentino on the provisions of the New Civil Code and the
Family Code on the alienation by the surviving spouse of the
community property that jurisprudence remains the same -
that the alienation made by the surviving spouse of a portion
of the community property is not wholly void ab initio despite
Article 103 of the Family Code, and shall be valid to the
extent of what will be allotted, in the final partition, to the
vendor. And rightly so, because why invalidate the sale by
the surviving spouse of a portion of the community property
that will eventually be his/her share in the final partition?
Practically there is no reason for that view and it would be
absurd.
Now here, in the instant case, the 5,560 square meter
portion of the 17,140 square-meter conjugal lot is certainly
mush (sic) less than what vendors Protacio Go and his son
Rito B. Go will eventually get as their share in the final
partition of the property. So the sale is still valid.
WHEREFORE, premises considered, complaint is hereby
DISMISSED without pronouncement as to cost and damages.
SO ORDERED.12
The RTC’s denial of their motion for
reconsideration13 prompted the petitioners to appeal directly
to the Court on a pure question of law.
Issue
The petitioners claim that Article 130 of the Family Code is
the applicable law; and that the sale by Protacio, Sr., et al.
to Servacio was void for being made without prior
liquidation.
In contrast, although they have filed separate comments,
Servacio and Rito both argue that Article 130 of the Family
Code was inapplicable; that the want of the liquidation prior
to the sale did not render the sale invalid, because the sale
was valid to the extent of the portion that was finally allotted
to the vendors as his share; and that the sale did not also
prejudice any rights of the petitioners as heirs, considering
that what the sale disposed of was within the aliquot portion
of the property that the vendors were entitled to as heirs.14
Ruling
The appeal lacks merit.
Article 130 of the Family Code reads:
Article 130. Upon the termination of the marriage by death,
the conjugal partnership property shall be liquidated in the
same proceeding for the settlement of the estate of the
deceased.
If no judicial settlement proceeding is instituted, the
surviving spouse shall liquidate the conjugal partnership
property either judicially or extra-judicially within one year
from the death of the deceased spouse. If upon the lapse of
the six month period no liquidation is made, any disposition
or encumbrance involving the conjugal partnership property
of the terminated marriage shall be void.
Should the surviving spouse contract a subsequent marriage
without compliance with the foregoing requirements, a
mandatory regime of complete separation of property shall
govern the property relations of the subsequent marriage.
Article 130 is to be read in consonance with Article 105 of
the Family Code, viz:
Article 105. In case the future spouses agree in the marriage
settlements that the regime of conjugal partnership of gains
shall govern their property relations during marriage, the
provisions in this Chapter shall be of supplementary
application.
The provisions of this Chapter shall also apply to conjugal
partnerships of gains already established between spouses
before the effectivity of this Code, without prejudice to
vested rights already acquired in accordance with the Civil
Code or other laws, as provided in Article 256. (n) [emphasis
supplied]
It is clear that conjugal partnership of gains established
before and after the effectivity of the Family Code are
governed by the rules found in Chapter 4 (Conjugal
Partnership of Gains) of Title IV (Property Relations Between
Husband And Wife) of the Family Code. Hence, any
disposition of the conjugal property after the dissolution of
the conjugal partnership must be made only after the
liquidation; otherwise, the disposition is void.
Before applying such rules, however, the conjugal
partnership of gains must be subsisting at the time of the
effectivity of the Family Code. There being no dispute that
Protacio, Sr. and Marta were married prior to the effectivity
of the Family Code on August 3, 1988, their property relation
was properly characterized as one of conjugal partnership
governed by the Civil Code. Upon Marta’s death in 1987, the
conjugal partnership was dissolved, pursuant to Article 175
(1) of the Civil Code,15 and an implied ordinary co-ownership
ensued among Protacio, Sr. and the other heirs of Marta with
respect to her share in the assets of the conjugal partnership
pending a liquidation following its liquidation.16 The ensuing
implied ordinary co-ownership was governed by Article 493
of the Civil Code,17 to wit:
Article 493. Each co-owner shall have the full ownership of
his part and of the fruits and benefits pertaining thereto, and
he may therefore alienate, assign or mortgage it, and even
substitute another person in its enjoyment, except when
personal rights are involved. But the effect of the alienation
or the mortgage, with respect to the co-owners, shall be
limited to the portion which may be allotted to him in the
division upon the termination of the co-ownership. (399)
Protacio, Sr., although becoming a co-owner with his children
in respect of Marta’s share in the conjugal partnership, could
not yet assert or claim title to any specific portion of Marta’s
share without an actual partition of the property being first
done either by agreement or by judicial decree. Until then,
all that he had was an ideal or abstract quota in Marta’s
share.18 Nonetheless, a co-owner could sell his undivided
share; hence, Protacio, Sr. had the right to freely sell and
dispose of his undivided interest, but not the interest of his
co-owners.19 Consequently, the sale by Protacio, Sr. and Rito
as co-owners without the consent of the other co-owners
was not necessarily void, for the rights of the selling co-
owners were thereby effectively transferred, making the
buyer (Servacio) a co-owner of Marta’s share.20 This result
conforms to the well-established principle that the binding
force of a contract must be recognized as far as it is legally
possible to do so (quando res non valet ut ago, valeat
quantum valere potest).21
Article 105 of the Family Code, supra, expressly provides
that the applicability of the rules on dissolution of the
conjugal partnership is "without prejudice to vested rights
already acquired in accordance with the Civil Code or other
laws." This provision gives another reason not to declare the
sale as entirely void. Indeed, such a declaration prejudices
the rights of Servacio who had already acquired the shares of
Protacio, Sr. and Rito in the property subject of the sale.
In their separate comments,22 the respondents aver that
each of the heirs had already received "a certain allotted
portion" at the time of the sale, and that Protacio, Sr. and
Rito sold only the portions adjudicated to and owned by
them. However, they did not present any public document on
the allocation among her heirs, including themselves, of
specific shares in Marta’s estate. Neither did they aver that
the conjugal properties had already been liquidated and
partitioned. Accordingly, pending a partition among the heirs
of Marta, the efficacy of the sale, and whether the extent of
the property sold adversely affected the interests of the
petitioners might not yet be properly decided with finality.
The appropriate recourse to bring that about is to commence
an action for judicial partition, as instructed in Bailon-Casilao
v. Court of Appeals,23 to wit:
From the foregoing, it may be deduced that since a co-owner
is entitled to sell his undivided share, a sale of the entire
property by one
co-owner without the consent of the other co-owners is not
null and void. However, only the rights of the co-owner-seller
are transferred, thereby making the buyer a co-owner of the
property.
The proper action in cases like this is not for the nullification
of the sale or for the recovery of possession of the thing
owned in common from the third person who substituted the
co-owner or co-owners who alienated their shares, but the
DIVISION of the common property as if it continued to
remain in the possession of the co-owners who possessed
and administered it [Mainit v. Bandoy, supra].1avvphi1
void ab initio. Thus, it has been held that the sale of conjugal
properties cannot be made by the surviving spouse without
the legal requirements. The sale is void as to the share of
the deceased spouse (except of course as to that portion of
the husband’s share inherited by her as the surviving
spouse). The buyers of the property that could not be validly
sold become trustees of said portion for the benefit of the
husband’s other heirs, the cestui que trust ent. Said heirs
shall not be barred by prescription or by laches (See Cuison,
et al. v. Fernandez, et al.,L-11764, Jan.31, 1959.)25

Thus, it is now settled that the appropriate recourse of co-
owners in cases where their consent were not secured in a
sale of the entire property as well as in a sale merely of the
undivided shares of some of the co-owners is an action for
PARTITION under Rule 69 of the Revised Rules of Court.
xxx24
WHEREFORE, we DENY the petition for review on certiorari;
and AFFIRM the decision of the Regional Trial Court.
The petitioners shall pay the costs of suit.
SO ORDERED.

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

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

xxx [I]f it turns out that the property alienated or mortgaged

really would pertain to the share of the surviving spouse,
then said transaction is valid. If it turns out that there really
would be, after liquidation, no more conjugal assets then the
whole transaction is null and void.1âwphi1 But if it turns out
that half of the property thus alienated or mortgaged belongs
to the husband as his share in the conjugal partnership, and
half should go to the estate of the wife, then that
corresponding to the husband is valid, and that
corresponding to the other is not. Since all these can be
determined only at the time the liquidation is over, it follows
logically that a disposal made by the surviving spouse is not
G.R. No. 200274
MELECIO DOMINGO, Petitioner,
vs.
SPOUSES GENARO MOLINA and ELENA B. MOLINA,
substituted by ESTER MOLINA, Respondents.
DECISION
BRION, J.:
We resolve the petition for review on certiorari1 filed by the
petitioner Melecio Domingo (Melecio) assailing the August 9,
2011 decision2 and January 10, 2012 resolution3 of the Court
of Appeals (CA) in CA-G.R. CV No. 94160.
THE FACTS
In June 15, 1951, the spouses Anastacio and Flora Domingo
bought a property in Camiling, Tarlac, consisting of a one-
half undivided portion over an 18, 164 square meter parcel
of land. The sale was annotated on the Original Certificate of
Title (OCT) No. 16354 covering the subject property.
During his lifetime, Anastacio borrowed money from the
respondent spouses Genaro and Elena Molina (spouses
Molina). On September 10, 1978 or 10 years after Flora’s
death4, Anastacio sold his interest over the land to the
spouses Molina to answer for his debts. The sale to the
spouses Molina was annotated at the OCT of the subject
property.5 In 1986, Anastacio died.6
In May 19, 1995, the sale of Anastacio’s interest was
registered under Transfer Certificate of Title (TCT) No.
272967[[7 ]]and transferred the entire one-half undivided
portion of the land to the spouses Molina.
Melecio, one of the children of Anastacio and Flora, learned
of the transfer and filed a Complaint for Annulment of Title
and Recovery of Ownership (Complaint) against the spouses
Molina on May 17, 1999.8
Melecio claims that Anastacio gave the subject property to
the spouses Molina to serve as collateral for the money that
Anastacio borrowed. Anastacio could not have validly sold
the interest over the subject property without Flora’s
consent, as Flora was already dead at the time of the sale.
Melecio also claims that Genaro Molina must have falsified
the document transferring Anastacio and Flora’s one-half
undivided interest over the land. Finally, Melecio asserts that
he occupied the subject property from the time of
Anastacio’s death up to the time he filed the Complaint.9
Melecio presented the testimonies of the Records Officer of
the Register of Deeds of Tarlac, and of Melecio’s nephew,
George Domingo (George).10
The Records Officer testified that he could not locate the
instrument that documents the transfer of the subject
property ownership from Anastacio to the spouses Molina.
The Records Officer also testified that the alleged sale was
annotated at the time when Genaro Molina’s brother was the
Register of Deeds for Camiling, Tarlac.11
George, on the other hand, testified that he has been living
on the subject property owned by Anastacio since 1986.
George testified, however, that aside from himself, there
were also four other occupants on the subject property,
namely Jaime Garlitos, Linda Sicangco, Serafio Sicangco and
Manuel Ramos.12
The spouses Molina asserted that Anastacio surrendered the
title to the subject property to answer for his debts and told
the spouses Molina that they already own half of the land.
The spouses Molina have been in possession of the subject
property before the title was registered under their names
and have religiously paid the property’s real estate taxes.
The spouses Molina also asserted that Melecio knew of the
disputed sale since he accompanied Anastacio several times
to borrow money. The last loan was even used to pay for
Melecio’s wedding. Finally, the spouses Molina asserted that
Melecio built his nipa hut on the subject property only in
1999, without their knowledge and consent.13
The spouses Molina presented Jaime Garlitos (Jaime) as their
sole witness and who is one of the occupants of the subject
lot.
Jaime testified that Elena Molina permitted him to build a
house on the subject property in 1993. Jaime, together with
the other tenants, planted fruit bearing trees on the subject
property and gave portions of their harvest to Elena Molina
without any complaint from Melecio. Jaime further testified
that Melecio never lived on the subject property and that
only George Domingo, as the caretaker of the spouses
Molina, has a hut on the property.
Meanwhile, the spouses Molina died during the pendency of
the case and were substituted by their adopted son, Cornelio
Molina.14
THE RTC RULING
The Regional Trial Court (RTC) dismissed15 the case because
Melecio failed to establish his claim that Anastacio did not
sell the property to the spouses Molina.
The RTC also held that Anastacio could dispose of conjugal
property without Flora’s consent since the sale was
necessary to answer for conjugal liabilities.
The RTC denied Melecio’s motion for reconsideration of the
RTC ruling. From this ruling, Melecio proceeded with his
appeal to the CA.
THE CA RULING
In a decision dated August 9, 2011, the CA affirmed the RTC
ruling in toto.
The CA held that Melecio failed to prove by preponderant
evidence that there was fraud in the conveyance of the
property to the spouses Molina. The CA gave credence to the
OCT annotation of the disputed property sale.
The CA also held that Flora’s death is immaterial because
Anastacio only sold his rights, excluding Flora’s interest, over
the lot to the spouses Molina.1âwphi1 The CA explained that
"[t]here is no prohibition against the sale by the widower of
real property formerly belonging to the conjugal partnership
of gains"16.
Finally, the CA held that Melecio’s action has prescribed.
According to the CA, Melecio failed to file the action within
one year after entry of the decree of registration.
Melecio filed a motion for reconsideration of the CA Decision.
The CA denied Melecio’s motion for reconsideration for lack
of merit.17
THE PETITION
Melecio filed the present petition for review on certiorari to
challenge the CA ruling.
Melecio principally argues that the sale of land belonging to
the conjugal partnership without the wife’s consent is invalid.
Melecio also claims that fraud attended the conveyance of
the subject property and the absence of any document
evidencing the alleged sale made the transfer null and void.
Finally, Melecio claims that the action has not yet prescribed.
The respondents, on the other hand, submitted and adopted
their arguments in their Appeal Brief18.
First, Melecio’s counsel admitted that Anastacio had given
the lot title in payment of the debt amounting to
Php30,000.00. The delivery of the title is constructive
delivery of the lot itself based on Article 1498, paragraph 2
of
the Civil Code.
Second, the constructive delivery of the title coupled with the
spouses Molina’s exercise of attributes of ownership over the
subject property, perfected the sale and completed the
transfer of ownership.
THE ISSUES
The core issues of the petition are as follows: (1) whether
the sale of a conjugal property to the spouses Molina without
Flora’s consent is valid and legal; and (2) whether fraud
attended the transfer of the subject property to the spouses
Molina.
OUR RULING
We deny the petition.
It is well settled that when the trial court’s factual findings
have been affirmed by the CA, the findings are generally
conclusive and binding upon the Court and may no longer be
reviewed on Rule 45 petitions.19 While there are
exceptions20 to this rule, the Court finds no applicable
exception with respect to the lower courts’ finding that the
subject property was Anastacio and Flora’s conjugal
property. Records before the Court show that the parties did
not dispute the conjugal nature of the property.
Melecio argues that the sale of the disputed property to the
spouses Molina is void without Flora’s consent.
We do not find Melecio’s argument meritorious.
Anastacio and Flora’s
conjugal partnership was
dissolved upon Flora’s death.
There is no dispute that Anastacio and Flora Domingo
married before the Family Code’s effectivity on August 3,
1988 and their property relation is a conjugal partnership.21
Conjugal partnership of gains established before and after
the effectivity of the Family Code are governed by the rules
found in Chapter 4 (Conjugal Partnership of Gains) of Title IV
(Property Relations Between Husband and Wife) of the
Family Code. This is clear from Article 105 of the Family
Code which states:
x x x The provisions of this Chapter shall also apply to
conjugal partnerships of gains already established between
spouses before the effectivity of this Code, without prejudice
to vested rights already acquired in accordance with the Civil
Code or other laws, as provided in Article 256.
The conjugal partnership of Anastacio and Flora was
dissolved when Flora died in 1968, pursuant to Article
175 (1) of the Civil Code22 (now Article 126 (1) of the Family
Code).
Article 130 of the Family Code requires the liquidation of the
conjugal partnership upon death of a spouse and prohibits
any disposition or encumbrance of the conjugal property
prior to the conjugal partnership liquidation, to quote:
Article 130. Upon the termination of the marriage by
death, the conjugal partnership property shall be
liquidated in the same proceeding for the settlement of
the estate of the deceased.
If no judicial settlement proceeding is instituted, the
surviving spouse shall liquidate the conjugal partnership
property either judicially or extrajudicially within one year
from the death of the deceased spouse. If upon the lapse
of the six month period no liquidation is made, any
disposition or encumbrance involving the conjugal
partnership property of the terminated marriage shall
be void. x x x (emphases supplied)
While Article 130 of the Family Code provides that any
disposition involving the conjugal property without prior
liquidation of the partnership shall be void, this rule does not
apply since the provisions of the Family Code shall be
"without prejudice to vested rights already acquired in
accordance with the Civil Code or other laws."23
An implied co-ownership
among Flora’s heirs governed
the conjugal properties
pending liquidation and
partition.
In the case of Taningco v. Register of Deeds of Laguna,24 we
held that the properties of a dissolved conjugal partnership
fall under the regime of co-ownership among the surviving
spouse and the heirs of the deceased
spouse until final liquidation and partition. The surviving
spouse, however, has an actual and vested one-half
undivided share of the properties, which does not consist of
determinate and segregated properties until liquidation
and partition of the conjugal partnership.
An implied ordinary co-ownership ensued among Flora’s
surviving heirs, including Anastacio, with respect to Flora’s
share of the conjugal partnership until final liquidation and
partition; Anastacio, on the other hand, owns one-half of the
original conjugal partnership properties as his share, but this
is an undivided interest.
Article 493 of the Civil Code on co-ownership provides:
Article 493. Each co-owner shall have the full ownership of
his part and of the fruits and benefits pertaining thereto, and
he may therefore alienate, assign or mortgage it, and even
substitute another person in its enjoyment, except when
personal rights are involved. But the effect of the
alienation or the mortgage, with respect to the co-
owners, shall be limited to the portion which may be
allotted to him in the division upon the termination of
the co-ownership. (399) (emphases supplied)
Thus, Anastacio, as co-owner, cannot claim title to any
specific portion of the conjugal properties without an actual
partition being first done either by agreement or by judicial
decree. Nonetheless, Anastacio had the right to freely sell
and dispose of his undivided interest in the subject property.
The spouses Molina became
co-owners of the subject
property to the extent of
Anastacio’s interest.
The OCT annotation of the sale to the spouses Molina reads
that "[o]nly the rights, interests and participation of
Anastacio Domingo, married to Flora Dela Cruz, is hereby
sold, transferred, and conveyed unto the said vendees for
the sum of ONE THOUSAND PESOS (P1,000.00)
which pertains to an undivided one-half (1/2)
portion and subject to all other conditions specified in the
document x x x"25 (emphases supplied). At the time of the
sale, Anastacio’s undivided interest in the conjugal properties
consisted of: (1) one-half of the entire conjugal properties;
and (2) his share as Flora’s heir on the conjugal properties.
Anastacio, as a co-owner, had the right to freely sell and
dispose of his undivided interest, but not the interest of his
co-owners. Consequently, Anastactio’s sale to the spouses
Molina without the consent of the other co-owners was not
totally void, for Anastacio’s rights or a portion thereof were
thereby effectively transferred, making the spouses Molina a
co-owner of the subject property to the extent of Anastacio’s
interest. This result conforms with the well-established
principle that the binding force of a contract must be
recognized as far as it is legally possible to do so (quando res
non valet ut ago, valeat quantum valere potest).26
The spouses Molina would be a trustee for the benefit of the
co-heirs of Anastacio in respect of any portion that might
belong to the co-heirs after liquidation and partition. The
observations of Justice Paras cited in the case of Heirs of
Protacio Go, Sr. V. Servacio27 are instructive:
x x x [I]f it turns out that the property alienated or
mortgaged really would pertain to the share of the surviving
spouse, then said transaction is valid. If it turns out that
there really would be, after liquidation, no more conjugal
assets then the whole transaction is null and void. But if it
turns out that half of the property thus alienated or
mortgaged belongs to the husband as his share in the
conjugal partnership, and half should go to the estate of the
wife, then that corresponding to the husband is valid, and
that corresponding to the other is not. Since all these can be
determined only at the time the liquidation is over, it follows
logically that a disposal made by the surviving spouse is not
void ab initio. Thus, it has been held that the sale of conjugal
properties cannot be made by the surviving spouse without
the legal requirements. The sale is void as to the share of
the deceased spouse (except of course as to that portion of
the husband’s share inherited by her as the surviving
spouse). The buyers of the property that could not be validly
sold become trustees of said portion for the benefit of the
husband’s other heirs, the cestui que trust ent. Said heirs
shall not be barred by prescription or by laches.
Melecio’s recourse as a co-owner of the conjugal properties,
including the subject property, is an action for partition
under Rule 69 of the Revised Rules of Court. As held in the
case of Heirs of Protacio Go, Sr., "it is now settled that the
appropriate recourse of co-owners in cases where their
consent were not secured in a sale of the entire property as
well as in a sale merely of the undivided shares of some of
the co-owners is an action for PARTITION under Rule 69 of
the Revised Rules of Court."28
deed of conveyance executed between Anastacio and the
spouses Molina, as annotated on the OCT of the disputed
property.
Furthermore, Melecio's belief that Anastacio could not have
sold the property without his knowledge cannot be
considered as proof of fraud to invalidate the spouses
Molina's registered title over the subject property.30
Prevailing jurisprudence uniformly holds that findings of facts
of the trial court, particularly when affirmed by the Court of
Appeals, are binding upon t his court. 31

The sale of the subject Considering these findings, we find no need to discuss the
property to the spouses Molina other issues raised by Melecio.
was not attended with fraud.
WHEREFORE, we hereby DENY the petition for review
On the issue of fraud, the lower courts found that there was on certiorari. The decision dated August 9, 2011 of the Court
no fraud in the sale of the disputed property to the spouses of Appeals in CA-G.R. CV No. 94160 is AFFIRMED.
Molina.
SO ORDERED.
The issue of fraud would require the Court to inquire into the
weight of evidentiary matters to determine the merits of the
petition and is essentially factual in nature. It is basic that
factual questions cannot be cannot be entertained in a Rule
45 petition, unless it falls under any of the recognized
exceptions29 found in jurisprudence. The present petition
does not show that it falls under any of the exceptions
allowing factual review.

The CA and RTC conclusion that there is no fraud in the sale

is supported by the evidence on record.

Melecio' s argument that no document was executed for the

sale is negated by the CA finding that there was a notarized
 G.R. No. 200612, April 05, 2017
RAFAEL C. UY (CABANGBANG
STORE), Petitioner, v. ESTATE OF VIPA
FERNANDEZ, Respondents.
DECISION
REYES, J.:
This is a Petition for Review on Certiorari1 under Rule 45 of
the Rules of Court seeking to annul and set aside the
Decision2 dated November 26, 2010 and Resolution3 dated
January 24, 2012 issued by the Court of Appeals (CA) in CA-
G.R. SP No. 04481.
Facts
Vipa Fernandez Lahaylahay (Vipa) is the registered owner of
a parcel of land situated in Lopez Jaena Street, Jaro, Iloilo
City covered by Transfer Certificate of Title No. T-26576
(subject property).4 Vipa and her husband, Levi Lahaylahay
(Levi), have two children – Grace Joy Somosierra (Grace Joy)
and Jill Frances Lahaylahay (Jill Frances).5
Sometime in 1990, a contract of lease was executed between
Vipa and Rafael Uy (Rafael) over the subject property and
the improvements thereon, pursuant to which, Rafael bound
himself to pay Vipa, as consideration for the lease of the
property, the amount of P3,000.00 per month, with a
provision for a 10% increase every year thereafter.6
On March 5, 1994, Vipa died leaving no will or testament
whatsoever. Grace Joy became the de facto administrator of
the estate of Vipa. After Vipa's death, Levi lived in Aklan.7
In June 1998, Rafael stopped paying the monthly
rents.8 Consequently, on June 12, 2003, the Estate of Vipa,
through Grace Joy, filed a complaint9 for unlawful detainer
with the Municipal Trial Court in Cities (MTCC) of Iloilo City
against Rafael. It was alleged therein that, as of June 1998,
Rafael was already bound to pay rent at the amount of
P3,300.00 per month and that his last payment was made in
May 1998. Accordingly, at the time of the filing of the
Complaint, Rafael's unpaid rents amounted to
P271,150.00.10 The Estate of Vipa claimed that despite
repeated demands, Rafael refused to pay the rents due.11
In his Answer,12 Rafael denied that he refused to pay the
rent for the lease of the subject property. He claimed that
sometime in June 1998 Patria Fernandez-Cuenca (Patria),
Vipa's sister, demanded for the payment of the rents,
claiming that she is the rightful heir of Vipa.13 Since he had
no idea on who is entitled to receive the rent for the subject
property, he deposited the amount of P10,000.00 with the
Office of the Clerk of Court of the Regional Trial Court (RTC)
of Iloilo City on November 20, 1998 and that Grace Joy was
informed of such consignation.14 He claimed that a case for
the settlement of the Estate of Vipa was instituted by Patria
with the RTC, which was docketed as Special Proceeding No.
6910. He averred that he is willing to pay the rent on the
leased property to the rightful heirs of Vipa and that he made
another consignation with the RTC in the amount of
P6,000.00.15
On June 12, 2008, the MTCC rendered a Decision,16 the
decretal portion of which reads:
WHEREFORE, in the light of the foregoing ratiocination,
judgment is hereby rendered in favor of the [Estate of Vipa]
and against [Rafael], ordering the latter, to wit:
 1. to vacate the premises subject of this case and
covered by TCT No. T-26576 and to peacefully
turn over the possession of the same to the
[Estate of Vipa];
2. to pay the [Estate of Vipa] the amount of
Php271,150.00 as payment for the unpaid
rentals with 12% interest per annum from the
last demand on May 3, 2003 until the whole
amount is paid;
3. to pay the [Estate of Vipa] the amount of
Php3,000.00 per month with 12% interest per
annum for the use and occupancy of the
premises computed from the date of the filing of
this case on June 12, 2003 until fully paid;
4. to pay the [Estate of Vipa] attorney's fees in the
amount of Php20,000.00; [and]
5. to pay the costs of suit.
SO ORDERED.17
The MTCC found that after Vipa's death in 1994 until 1998,
Rafael was paying the rent for the lease of the subject
property to Grace Joy.18 That the real reason why Patria
claimed to be the heir of Vipa is because she owed Rafael
money which she could not pay. Patria then charged the debt
she owes to Rafael from the monthly rent of the subject
property, an arrangement that Rafael took advantage to
avoid paying Grace Joy the monthly rents. The MTCC further
opined that the consignations made by Rafael in the total
amount of P16,000.00 are not valid since there was no prior
tender of payment.19
On appeal, the RTC, in its Decision20 dated April 15, 2009,
reversed the MTCC's Decision dated June 12, 2008 and,
thus, dismissed the complaint for unlawful detainer filed by
the Estate of Vipa. Thus:
WHEREFORE, premises considered, the Decision appealed
from is REVERSED and SET ASIDE; and the herein complaint
is hereby DISMISSED for lack of merit; and further
DISMISSING [Rafael's] counterclaim for failure to
substantiate the same.
SO ORDERED.21
The RTC opined that Grace Joy was actually the plaintiff in
the case and not the Estate of Vipa. It then pointed out that
Grace Joy failed to bring the dispute to the barangay for
conciliation prior to filing the complaint for unlawful
detainer.22
The RTC further held that the MTCC erred in including the
entire subject property as part of the Estate of Vipa. The RTC
explained that the subject property was acquired by Vipa
during the subsistence of her marriage with Levi and, as
such, is part of their conjugal properties. That after Vipa's
death, the conjugal partnership was terminated, entitling
Levi to one-half of the property.23 The RTC then pointed out
that Levi sold his share in the subject property to Rafael, as
evidenced by a Deed of Sale24 dated December 29,
2005.25 Accordingly, the RTC ruled that Rafael, as co-owner
of the subject property, having bought Levi's one-half share
thereof, had the right to possess the same.26
The Estate of Vipa sought a reconsideration27 of the Decision
dated April 15, 2009, but it was denied by the RTC in its
Order dated July 28; 2009.28
The Estate of Vipa then filed a Petition for Review29 with the
CA. On November 26, 2010, the CA rendered a
Decision,30 which declared:
WHEREFORE, in view of all the foregoing, the instant
petition for review is GRANTED and the April 15, 2009
Decision of the court a quo in Civil Case No. 08-29842 is
hereby REVERSED and SET ASIDE. Accordingly, the June 12,
2008 Decision of the Municipal Trial Court, Branch 4, Iloilo
City, in Civil Case No. 03-208 is hereby REINSTATED.
SO ORDERED.31
The CA held that there was no necessity to bring the dispute
before the barangay for conciliation since the Estate of Vipa,
being a juridical person, cannot be impleaded to a barangay
conciliation proceeding. The CA likewise pointed out that any
allegations against Grace Joy's authority to represent the
Estate of Vipa had been laid to rest when she was appointed
as administrator of the Estate of Vipa in Special Proceedings
No. 6910 pending before the RTC.32
Further, the CA held that Rafael raised the issue of
ownership of the subject property, i.e., Levi's sale of his one-
half share in the subject property to Rafael, only for the first
time in his appeal with the RTC. Accordingly, it was error on
the part of the RTC to have resolved the issue of ownership
of the subject property.33 Furthermore, the CA agreed with
the MTCC that Rafael's consignation of the rent to the RTC is
ineffective. It ruled that Rafael made the consignation only
twice and the amount consigned was patently insignificant
compared to the amount of rent due.34
Rafael's motion for reconsideration35 was denied by the CA in
its Resolution36 dated January 24, 2012.
Hence, the instant petition.
Rafael maintains that Grace Joy has no authority to
represent the Estate of Vipa and, when she filed the
complaint for unlawful detainer with the MTCC, she did so in
her personal capacity. Thus, Rafael claims that the dispute
should have been brought to the barangay for conciliation
before the complaint was filed in the MTCC.37 He further
claims that the CA erred in . reversing the RTC's ruling on
the issue of ownership of the subject property. He insists
that he already purchased Levi's one-half share in the
subject property.38
On the other hand, the Estate of Vipa, in its
Comment,39 avers that the supposed lack of authority of
Grace Joy to file the complaint for unlawful detainer and the
ownership of the subject property were never raised in the
proceedings before the MTCC and, hence, could not be
passed upon by the RTC in the appellate proceedings. In any
case, it pointed out that the RTC's Decision40 dated October
28, 2005 in Special Proceedings No. 6910, which appointed
Grace Joy as the administrator of the intestate estate of
Vipa, recognized that the latter and Jill Frances are
legitimate children of Vipa and Levi.
Issue
Essentially, the issue set forth for the Court's resolution is
whether the CA erred in reversing the RTC's Decision dated
April 15, 2009.
Ruling of the Court
The petition is partly meritorious.
Rafael's claim that the complaint below should have been
dismissed since Grace Joy has no authority to represent the
Estate of Vipa and that there was lack of prior barangay
conciliation is untenable. Unlawful detainer cases are covered
by the Rules on Summary Procedure.41 Section 5 of the 1991
Revised Rules on Summary Procedure provides that
affirmative and negative defenses not pleaded in the answer
shall be deemed waived, except lack of jurisdiction over the
subject matter.
Rafael failed to plead in the answer he filed with the MTCC
that Grace Joy has no authority to represent the Estate of
Vipa. Neither did he raise therein the lack of barangay
conciliation between the parties herein prior to the filing of
the complaint for unlawful detainer. Accordingly, the
foregoing defenses are already deemed waived.
In any case, the issue of the supposed lack of authority of
Grace Joy to represent the Estate of Vipa had already been
rendered moot with the RTC's appointment of Grace Joy as
the administrator of the Estate of Vipa in Special Proceedings
No. 6910.
Also, there was no need to refer the dispute between the
parties herein to the barangay for conciliation pursuant to
the Katarungang Pambarangay Law.42 It bears stressing that
only individuals may be parties to barangay conciliation
proceedings either as complainants or respondents.
Complaints by or against corporations, partnerships or other
juridical entities may not be filed with, received or acted
upon by the barangay for conciliation.43 The Estate of Vipa,
which is the complainant below, is a juridical entity that has
a personality, which is separate and distinct from that of
Grace Joy.44 Thus, there is no necessity to bring the dispute
to the barangay for conciliation prior to filing of the
complaint for unlawful detainer with the MTCC.
The CA, nevertheless, erred in hastily dismissing Rafael's
allegation as regards the ownership of the subject property.
In disregarding Rafael's claim that he owns Levi's one-half
undivided share in the subject property, the CA ruled that
the said issue was raised for the first time on appeal and
should thus not have been considered by the RTC, viz.:
On the second issue, the records show that [Rafael] raised
the issue of ownership only for the first time on appeal;
hence, the [RTC] erred in deciding the appeal before it on
the findings that part of the subject premises is owned by
petitioners, allegedly having bought the same from [Levi],
the husband of [Vipa].
The Court is not unmindful that in forcible entry and unlawful
detainer cases, the MTC may rule on the issue [of] ownership
in order to determine the issue of possession. However, the
issue of ownership must be raised by the defendant on the
earliest opportunity; otherwise, it is already deemed waived.
Moreover, the instant case was covered by the Rules on
Summary Procedure, which expressly provide that
affirmative and negative defenses not pleaded therein shall
be deemed waived, except for lack of jurisdiction over the
subject matter. Thus, the [RTC] erred in resolving the issue
of ownership for the first time on appeal.45 (Citations
omitted)
It is true that fair play, justice, and due process dictate that
parties should not raise for the first time on appeal issues
that they could have raised but never did during trial.
However, before a party may be barred from raising an issue
for the first time on appeal, it is imperative that the issue
could have been raised during the trial.46 What escaped the
appellate court's attention is that the sale of the one-half
undivided share in the subject property to Rafael was
consummated only on December 29, 2005, more than two
years after Rafael filed with the MTCC his answer to the
complaint for unlawful detainer on July 18,
2003.47 Obviously, Rafael could not have raised his
acquisition of Levi's share in the subject property as an
affirmative defense in the answer he filed with the MTCC.
Moreover, Rafael's ownership of the one-half undivided share
in the subject property would necessarily affect the property
relations between the parties herein. Thus, the CA should
have exerted efforts to resolve the said issue instead of
dismissing the same on the flimsy ground that it was not
raised during the proceedings before the MTCC.
Levi and Vipa were married on March 24, 196148 and, in the
absence of a marriage settlement, the system of conjugal
partnership of gains governs their property relations.49 It is
presumed that the subject property is part of the conjugal
properties of Vipa and Levi considering that the same was
acquired during the subsistence of their marriage and there
being no proof to the contrary.50
When Vipa died on March 5, 1994, the conjugal partnership
was automatically terminated.51 Under Article 130 of the
Family Code, the conjugal partnership property, upon its
dissolution due to the death of either spouse, should be
liquidated either in the same proceeding for the settlement of
the estate of the deceased or, in the absence thereof, by the
surviving spouse within one year from the death of the
deceased spouse. That absent any liquidation, any
disposition or encumbrance of the conjugal partnership
property is void. Thus:
Article 130. Upon the termination of the marriage by death,
the conjugal partnership property shall be liquidated in the
same proceeding for the settlement of the estate of the
deceased.
If no judicial settlement proceeding is instituted, the
surviving spouse shall liquidate the conjugal
partnership property either judicially or extra-
judicially within six months from the death of the
deceased spouse. If upon the lapse of the six-month
period no liquidation is made, any disposition or
encumbrance involving the conjugal partnership
property of the terminated marriage shall be void.
Should the surviving spouse contract a subsequent marriage
without compliance with the foregoing requirements, a
mandatory regime of complete separation of property shall
govern the property relations of the subsequent marriage.
(Emphasis ours)
Article 130 of the Family Code is applicable to conjugal
partnership of gains already established between the spouses
prior to the effectivity of the Family Code pursuant to Article
105 thereof, viz.:
Article 105. In case the future spouses agree in the marriage
settlements that the regime of conjugal partnership of gains
shall govern their property relations during marriage, the
provisions in this Chapter shall be of supplementary
application.
The provisions of this Chapter shall also apply to
conjugal partnerships of gains already established
between spouses before the effectivity of this Code,
without prejudice to vested rights already acquired in
accordance with the Civil Code or other laws as provided in
Article 256. (Emphasis ours)
Rafael bought Levi's one-half share in the subject property in
consideration of P500,000.00 as evidenced by the Deed of
Sale52 dated December 29, 2005. At that time, the conjugal
partnership properties of Levi and Vipa were not yet
liquidated. However, such disposition, notwithstanding the
absence of liquidation of the conjugal partnership properties,
is not necessarily void.
It bears stressing that under the regime of conjugal
partnership of gains, the husband and wife are co-owners of
all the property of the conjugal partnership.53 Thus, upon the
termination of the conjugal partnership of gains due to the
death of either spouse, the surviving spouse has an actual
and vested one-half undivided share of the properties, which
does not consist of determinate and segregated properties
until liquidation and partition of the conjugal
partnership.54 With respect, however, to the deceased
spouse's share in the conjugal partnership properties, an
implied ordinary co-ownership ensues among the surviving
spouse and the other heirs of the deceased.55
Thus, upon Vipa's death, one half of the subject property
was automatically reserved in favor of the surviving spouse,
Levi, as his share in the conjugal partnership. The other half,
which is Vipa's share, was transmitted to Vipa's heirs – Grace
Joy, Jill Frances, and her husband Levi, who is entitled to the
same share as that of a legitimate child. The ensuing implied
co-ownership is governed by Article 493 of the Civil Code,
which provides:
Article 493. Each co-owner shall have the full ownership of
his part and of the fruits and benefits pertaining thereto,
and he may therefore alienate, assign or mortgage it,
and even substitute another person in its enjoyment, except
when personal rights are involved. But the effect of the
alienation or the mortgage, with respect to the co-
owners, shall be limited to the portion which may be
allotted to him in the division upon the termination of
the co-ownership. (Emphasis ours)
Although Levi became a co-owner of the conjugal partnership
properties with Grace Joy and Jill Frances, he could not yet
assert or claim title to any specific portion thereof without an
actual partition of the property being first done either by
agreement or by judicial decree. Before the partition of a
land or thing held in common, no individual or co-owner can
claim title to any definite portion thereof. All that the co-
owner has is an ideal or abstract quota or proportionate
share in the entire land or thing.56
Nevertheless, a co-owner could sell his undivided share;
hence, Levi had the right to freely sell and dispose of his
undivided interest. Thus, the sale by Levi of his one-half
undivided share in the subject property was not necessarily
void, for his right as a co-owner thereof was effectively
transferred, making the buyer, Rafael, a co-owner of the
subject property. It must be stressed that the binding force
of a contract must be recognized as far as it is legally
possible to do so (quando res non valet ut ago, valeat
quantum valere potest).57
However, Rafael became a co-owner of the subject property
only on December 29, 2005 – the time when Levi sold his
one-half undivided share over the subject property to the
former. Thus, from December 29, 2005 Rafael, as a co-
owner, has the right to possess the subject property as an
incident of ownership. Otherwise stated, prior to his
acquisition of Levi's one-half undivided share, Rafael was a
mere lessee of the subject property and is thus obliged to
pay the rent for his possession thereof.
Accordingly, Rafael could no longer be directed to vacate the
subject property since he is already a co-owner thereof.
Nevertheless, Rafael is still bound to pay the unpaid rentals
from June 1998 until April 2003 in the amount of
P271,150.00. In Nacar v. Gallery Frames, et al.,58 the Court
pointed out that pursuant to Resolution No. 796 of the
Bangko Sentral ng Pilipinas Monetary Board, the interest rate
of loans or forbearance of money, in the absence of
stipulation shall be six percent (6%) effective only from July
1, 2013. Thus, prior to July 1, 2013, the rate of interest on
loans or forbearance of money, in the absence of stipulation,
is still 12%. Accordingly, the amount of P271,150.00,
representing the unpaid rentals shall earn interest at the
rates of 12% per annum from the date of the last demand on
May 3, 2003 until June 30, 2013 and 6% per annum from
July 1, 2013 until fully paid.
Further, Rafael is likewise bound to pay reasonable rent for
the use and occupancy of the subject property from May
2003 until December 28, 2005 at the rate of P3,000.00 per
month with interest at the rate of 12% per annum from the
date of the last demand, i.e., the filing of the complaint with
the MTCC on June 12, 2003, until June 30, 2013 and 6% per
annum from July 1, 2013 until fully paid.
The award of attorney's fees of P20,000.00 is likewise
proper. Attorney's fees can be awarded in the cases
enumerated in Article 2208 of the Civil Code, specifically:
Article 2208. x x x
xxxx
(2) Where the defendant's act or omission has compelled the
plaintiff to litigate with third persons or to incur expenses to
protect his interest[.]
Certainly, because of Rafael's unjustified refusal to pay the
rents due on the lease of the subject prope1iy, the Estate of
Vipa was put to unnecessary expense and trouble to protect
its interest under paragraph (2), Article 2208 of the Civil
Code. In unlawful detainer cases, where attorney's fees are
awarded, the same shall not exceed P20,000.00.59
WHEREFORE, in view of the foregoing disquisitions, the
petition for review on certiorari is PARTIALLY GRANTED.
The Decision dated November 26, 2010 and Resolution dated
January 24, 2012 issued by the Court of Appeals in CA-G.R.
SP No. 04481 are hereby REVERSED and SET ASIDE.
Petitioner Rafael C. Uy is hereby directed to pay the Estate of
Vipa Fernandez the following:
1. The amount of P271,150.00, representing the unpaid
rentals, with interest at the rates of twelve percent
(12%) per annum from the date of the last demand on
May 3, 2003 until June 30, 2013, and six percent
(6%) per annum from July 1, 2013 until fully paid;
2. Reasonable rent for the use and occupancy of the
subject property from May 2003 until December 28,
2005 at the rate of P3,000.00 per month with interest
at the rates of twelve percent (12%) per annum from
the date of the last demand, i.e., the filing of the
complaint for unlawful detainer on June 12, 2003, until
June 30, 2013, and six percent (6%) per annum from
July 1, 2013 until fully paid; and
3. The amount of P20,000.00 as attorney's fees.
SO ORDERED.
G.R. No. 234533
SPOUSES JULIETA B. CARLOS and FERNANDO P.
CARLOS, Petitioners
vs.
JUAN CRUZ TOLENTINO, Respondent
DECISION
VELASCO, JR., J.:
Nature of the Case
Before this Court is a petition for review on certiorari under
Rule 45 of the Rules of Court assailing the April 5, 2017
Decision1 and the September 27, 2017 Resolution2 of the
Court of Appeals (CA) in CA-G.R. CV No. 106430. The
challenged rulings reversed and set aside the October 16,
2015 Decision3 and the December 9, 2015 Order4 of the
Regional Trial Court (RTC) of Quezon City, Branch 87 which
dismissed respondent's complaint for annulment of title
against the petitioners.
The Facts
The instant case arose from a complaint for annulment of
title with damages filed by respondent Juan Cruz Tolentino
(Juan) against his wife, Mercedes Tolentino (Mercedes), his
grandson, Kristoff M. Tolentino (Kristoff), herein petitioners
Spouses Julieta B. Carlos (Julieta) and Fernando P. Carlos
(Spouses Carlos), and the Register of Deeds of Quezon City.
The subject matter of the action is a parcel of land with an
area of 1,000 square meters and all the improvements
thereon located in Novaliches,5 Quezon City, covered by
Transfer Certificate of Title (TCT) No. RT-90746 (116229)
issued on March 17, 1967 and registered in the name of Juan
C. Tolentino, married to Mercedes Tolentino (the subject
property). 6
Without Juan's knowledge and consent, Mercedes and
Kristoff, who were then residing in the subject property,
allegedly forged a Deed of Donation 7 dated February 15,
2011, thereby making it appear that Juan and Mercedes
donated the subject property to Kristoff. Thus, by virtue of
the alleged forged Deed of Donation, Kristoff caused the
cancellation of TCT No. RT-90764 (116229), and in lieu
thereof, TCT No. 004-20110033208 was issued in his name
on March 9, 2011. 9
In April 2011, Kristoff offered the sale of the subject property
to Julieta's brother, Felix Bacal (Felix), who is also the
administrator of the lot owned by Julieta which is adjacent to
the subject property. When Felix informed Julieta of the
availability of the subject property, Spouses Carlos then
asked him to negotiate for its purchase with Kristoff. Kristoff
and Felix then arranged for the ocular inspection of the
subject property. Thereafter, Kristoff surrendered to Felix
copies of the title and tax declaration covering the said
property. 10
After a series of negotiations, Kristoff and Julieta executed a
Memorandum of Agreement11 (MOA) dated April 12, 2011
stating that Kristoff is selling the subject property to Julieta
in the amount of Two Million Three Hundred Thousand Pesos
(P2,300,000.00), payable in two (2) installments. On May
28, 2011, Julieta made the first payment in the amount of
Two Million Pesos (₱2,000,000.00) 12 while the second
payment in the amount of Three Hundred Thousand Pesos
(P300,000.00) was made on June 30, 2011. 13 On the same
day, a Deed of Absolute Sale 14
was executed between
Kristoff and Julieta.
Upon learning of the foregoing events, Juan executed an
Affidavit of Adverse Claim which was annotated on TCT No.
004-2011003320 on July 15, 2011, to wit:
NOTICE OF ADVERSE CLAIM : EXECUTED UNDER OATH BY
JUAN C. TOLENTINO, CLAIMING FOR THE RIGHTS, INTEREST
AND PARTICIPATION OVER THE PROPERTY, STATING
AMONG OTHERS THAT HE DISCOVERED ON JULY 14, 2011
THAT SAID PARCEL OF LAND HAS BEEN DONATED TO
KRISTOFF M. TOLENTINO BY VIRTUE OF A DEED OF
DONATION PU[R]PORTEDL Y EXECUTED BY JUAN C.
TOLENTINO & MERCEDES SERRANO ONFEB. 15, 2011. THAT
AS A RESULT OF THE FORGED DEED OF DONATION, HIS
TITLE WAS CANCELLED. THAT HE DECLARE THAT HE HA VE
NOT SIGNED ANY DEED OF DONATION IN FAVOR OF SAID
KRISTOFF M. TOLENTINO. NEITHER DID HE SELL, TRANSFER
NOR WAIVE ms RIGHTS OF OWNERSHIP OVER THE SAID
PROPERTY. OTHER CONDITIONS SET FORTH IN DOC. NO.
253, PAGE NO. 52, BOOK NO. V, SERIES OF 2011 OF
NOTARY PUBLIC OF QC, MANNY GRAGASIN. DATE
INSTRUMENT- JUNE 15, 2011 15
Juan also filed a criminal complaint for Falsification of Public
Document before the Office of the City Prosecutor of Quezon
City against Kristoff. 16 A Resolution for the filing of
Information for Falsification of Public Document against
Kristoff was then issued on January 10, 2012. Accordingly,
an Information dated February 15, 2012 was filed against
him. 17
Meanwhile, Kristoff and Julieta executed another Deed of
Absolute Sale18 dated September 12, 2011 over the subject
property and, by virtue thereof, the Register of Deeds of
Quezon City cancelled TCT No. 004- 2011003320 and issued
TCT No. 004-201101350219 on December 5, 2011 in favor of
Spouses Carlos. The affidavit of adverse claim executed by
Juan was duly carried over to the title of Spouses Carlos.
On February 23, 2012, Juan filed a complaint for annulment
of title with damages against Mercedes, Kristoff, Spouses
Carlos, and the Register of Deeds of Quezon City before the
R TC of Quezon City. The case was raffled to Branch 87 and
docketed as Civil Case No. Q-12-70832.
RTC Ruling
In its October 16, 2015 Decision, the RTC found that Juan's
signature in the Deed of Donation dated Februaru 15, 2011
was a forgery. 20 Despite such finding, however, it dismissed
Juan's complaint.
The R TC found that at the time Spouses Carlos fully paid the
agreed price in the MOA on June 30, 2011, which culminated
in the execution of the Deed of Absolute Sale on even date,
Kristoff was the registered owner of the subject property
covered by TCT No. 004-2011003320. Further, when the
MOA and the Deed of Absolute Sale dated June 30, 2011
were executed, nothing was annotated on the said title to
indicate the adverse claim of Juan or any other person. It
was only on July 15, 2011 when Juan's adverse claim was
annotated on Kristoff's title.21
The fact that a second Deed of Absolute Sale dated
September 12, 2011 was executed is immaterial since the
actual sale of the subject property took place on June 30,
2011 when Spouses Carlos fully paid the purchase price.
Thus, relying on the face of Kristoff s title without any
knowledge of irregularity in the issuance thereof and having
paid a fair and full price of the subject property before they
could be charged with knowledge of Juan's adverse claim,
the RTC upheld Spouses Carlos' right over the subject
property. The dispositive portion of the October 16, 2015
Decision states:
WHEREFORE, viewed in the light of the foregoing, the instant
complaint for Annulment of Title and Damages against the
defendant spouses Fernando and Julieta Carlos is hereby
DISMISSED for failure of the plaintiff to prove his cause of
action. This is without prejudice, however to any appropriate
remedy the plaintiff may take against Kristoff Tolentino and
Mercedes Tolentino.
The defendant spouses' counterclaim is DISMISSED for lack
of merit.
SO ORDERED.22
Juan moved for reconsideration of the said decision but was
denied by the R TC in its December 9, 2015 Order. Thus, he
interposed an appeal before the CA.
CA Ruling
On appeal, the CA found that Spouses Carlos were negligent
in not taking the necessary steps to determine the status of
the subject property prior to their purchase thereof. It
stressed that Julieta failed to examine Kristoff s title and
other documents before the sale as she merely relied on her
brother, Felix.23 Accordingly, the CA ruled that Juan has a
better right over the subject property. The fallo of the April
5, 2017 Decision reads:
WHEREFORE, the appeal is GRANTED. The appealed
Decision of the RTC of Quezon City dated October 16, 2015
is hereby REVERSED and SET ASIDE. Accordingly, plaintiff-
appellant Juan Cruz Tolentino is recognized to have a better
right over the subject property. The Register of Deeds of
Quezon City is ORDERED to reinstate TCT No. RT-90746
(116229) in the name of Juan Cruz Tolentino and to cancel
TCT No. 004-2011013502 in the names of Spouses Julieta
and Fernando Carlos, and the latter to surrender possession
of the subject property to Juan Cruz Tolentino.
SO ORDERED.24
Spouses Carlos then filed a motion for reconsideration but
the same was denied by the CA in its September 27, 2017
Resolution.
Hence, the instant petition.
The Issue
Spouses Carlos anchor their plea for the reversal of the
assailed Decision on the following grounds: 25
The Court of Appeals acted injudiciously, and with grievous
abuse of discretion in the appreciation of facts and in
disregard of jurisprudence, when it granted respondent's
appeal, and thereby arbitrarily and despotically ratiocinated
that -
I. Petitioners are not buyers in good faith of the litigated real
property, but who are otherwise devoid of notice let alone
knowledge of any flaw or infirmity in the title of the person
selling the property at the time of purchase.
II. Petitioners are not purchasers in good faith, on the basis
of the Memorandum of Agreement dated April 12, 2011 and
the Deed of Absolute Sale dated June 30, 2011.
III. Respondent Juan Cruz Tolentino was the previous
registered owner of the land in dispute, thereby acting on
oblivion to the fact that the real property is essentially
conjugal in nature.
IV. In failing to rule and rationalize that at least one-half of
the subject real property should belong to petitioners.
V. The litigated property must be awarded and returned m
favour of respondent Juan Cruz Tolentino in its entirety.
At bottom, the crux of the controversy is who, between Juan
and Spouses Carlos, has the better to right to claim
ownership over the subject property.
The Court's Ruling
The present controversy necessitates an inquiry into the
facts. While, as a general rule, factual issues are not within
the province of this Court, nonetheless, in light of the
conflicting factual findings of the two courts below, an
examination of the facts obtaining in this case is in order. 26
Juan and Mercedes appear to have been married before the
effectivity of the Family Code on August 3, 1988. There
being no indication that they have adopted a different
property regime, the presumption is that their property
relations is governed by the regime of conjugal partnership
of gains.27 Article 119 of the Civil Code thus provides:
Article 119. The future spouses may in the marriage
settlements agree upon absolute or relative community of
property, or upon complete separation of property, or upon
any other regime. In the absence of marriage settlements, or
when the same are void, the system of relative community
or conjugal partnership of gains as established in this Code,
shall govern the property relations between husband and
wife.
Likewise, the Family Code contains terms governing conjugal
partnership of gains that supersede the terms of the conjugal
partnership of gains under the Civil Code. Article 105 of the
Family Code states:
Article 105. In case the future spouses agree in the marriage
settlements that the regime of conjugal partnership of gains
shall govern their property relations during marriage, the
provisions in this Chapter shall be of supplementary
application.
The provisions of this Chapter shall also apply to conjugal
partnerships of gains already established between spouses
before the effectivity of this Code, without prejudice to
vested rights already acquired in accordance with the Civil
Code or other laws, as provided in Article 256.
Since the subject property was acquired on March 17,
196728 during the marriage of Juan and Mercedes, it formed
part of their conjugal partnership. 29 It follows then that Juan
and Mercedes are the absolute owners of their undivided
one-half interest, respectively, over the subject property.
Meanwhile, as in any other property relations between
husband and wife, the conjugal partnership is terminated
upon the death of either of the spouses.30 In respondent
Juan's Comment filed before the Court, the Verification which
he executed on February 9, 2018 states that he is already a
widower. Hence, the Court takes due notice of the fact of
Mercedes' death which inevitably results in the dissolution of
the conjugal partnership.
In retrospect, as absolute owners of the subject property
then covered by TCT No. RT-90746 (116229), Juan and
Mercedes may validly exercise rights of ownership by
executing deeds which transfer title thereto such as, in this
case, the Deed of Donation dated February 15, 2011 in favor
of their grandson, Kristoff.
With regard to Juan's consent to the afore-stated donation,
the RTC, however, found that such was lacking since his
signature therein was forged. Notably, the CA did not
overturn such finding, and in fact, no longer touched upon
the issue of forgery. On the other hand, it must be pointed
out that the signature of Mercedes in the Deed of Donation
was never contested and is, therefore, deemed admitted.
In Arrogante v. Deliarte,31 We ruled that a deed of sale of the
subject lot therein executed by the Deliarte siblings in favor
of their brother, respondent Beethoven Deliarte (Beethoven),
was void for being a conveyance of future inheritance.
Nonetheless, the provisions in the written agreement and the
Deliarte siblings' signature thereon are equivalent to an
express waiver of all their rights and interests. Thus, the
Court upheld the quieting of title in favor of respondent
Beethoven after finding that the deed of sale, albeit void,
evidenced the consent and acquiescence of each Deliarte
sibling to said transaction.
In the present case, while it has been settled that the
congruence of the wills of the spouses is essential for the
valid disposition of conjugal property, 32 it cannot be ignored
that Mercedes' consent to the disposition of her one-half
interest in the subject property remained undisputed. It is
apparent that Mercedes, during her lifetime, relinquished all
her rights thereon in favor of her grandson, Kristoff.
Furthermore, Mercedes' knowledge of and acquiescence to
the subsequent sale of the subject property to Spouses
Carlos is evidenced by her signature appearing in the
MOA33 dated April 12, 2011 and the Deed of Absolute
Sale34dated September 12, 2011. We are also mindful of the
fact that Spouses Carlos had already paid a valuable
consideration in the amount of Two Million Three Hundred
Thousand Pesos (P2,300,000.00) for the subject property
before Juan's adverse claim was annotated on Kristoff s title.
The said purchase and acquisition for valuable consideration
deserves a certain degree of legal protection.
Given the foregoing, the Court is disinclined to rule that the
Deed of Donation is wholly void ab initio and that the
Spouses Carlos should be totally stripped of their right over
the subject property. In consonance with justice and equity,
We deem it proper to uphold the validity of the Deed of
Donation dated February 15, 2011 but only to the extent of
Mercedes' one half share in the subject property. And rightly
so, because why invalidate Mercedes' disposition of her one-
half portion of the conjugal property that will eventually be
her share after the termination of the conjugal partnership?
It will practically be absurd, especially in the instant case,
since the conjugal partnership had already been terminated
upon Mercedes' death.
Accordingly, the right of Kristoff, as donee, is limited only to
the one-half undivided portion that Mercedes
owned.1âwphi1The Deed of Donation insofar as it covered
the remaining one-half undivided portion of the subject to Fernando P. Carlos, and Juan Cruz Tolentino on a 50-50
property is null and void, Juan not having consented to the undivided interest in the lot.
donation of his undivided half.
We order Kristoff M. Tolentino to pay Spouses Carlos the
Upon the foregoing perspective, Spouses Carlos' right, as amount of One Million One Hundred Fifty Thousand Pesos
vendees in the subsequent sale of the subject property, is (P1,150,000.00) corresponding to one-half of the amount
confined only to the one-half undivided portion thereof. The paid by Spouses Carlos for the subject property, with legal
other undivided half still belongs to Juan. As owners pro interest at the rate of 6% computed from the finality of this
indiviso of a portion of the lot in question, either Spouses Decision.
Carlos or Juan may ask for the partition of the lot and their
property rights shall be limited to the portion which may be SO ORDERED.
allotted to them in the division upon the termination of the
co-ownership.35 This disposition is in line with the well
established principle that the binding force of a contract must
be recognized as far as it is legally possible to do so-quando
res non valet ut ago, valeat quantum vale re potest. 36

Lastly, as a matter of fairness and in line with the principle

that no person should unjustly enrich himself at the expense
of another, 37 Kristoff should be liable to reimburse Spouses
Carlos of the amount corresponding to one-half of the
purchase price of the subject property.

WHEREFORE, in view of the foregoing, the petition

is PARTIALLY GRANTED. The donation and subsequent
sale of the subject property is declared NULL and VOID with
respect to the undivided 1/2 portion owned by Juan Cruz
Tolentino, but VALID with respect to the other undivided 1/2
portion belonging to Mercedes Tolentino. Accordingly,
petitioners Spouses Carlos and respondent Juan Cruz
Tolentino are hereby declared as co-owners of the subject
property. The Register of Deeds of Quezon City is ordered to
cancel TCT No. 004-2011013502 and to issue a new transfer
certificate of title in the names of Julieta B. Carlos, married