1.Arcaba vs. Tabancura Vda De Batocael, GR No.146683, 22 November 2001, 370 SCRA 414 2.Ayala Investment vs.

CA, GR No.1183305, 12 February 1998 3.Wong vs. IAC, GR No.70082, 19 August 1991 4.Carlos vs. Abelardo, GR No.146504, 9 April 2002 5.Sps. Roberto and Venus Buado vs. CA, G.R. No.145222, 24 April 2009. 6.Go vs. Yamane, G.R.No.160762, 3 May 2006. 7.Sabalones vs. CA, 230 SCRA 79 8. Giuang vs. CA, GR No.125172, 26 June 1998 9. Jader-Manalo vs. Camaisa, GR No.147978, 28 January 2002 10.Sps. Lita De Leon & Felic Rio Tarrosa vs. Anita de Leon, et al., G.R. No.185063, 23 July 2009

SECOND DIVISION

[G.R. No. 146683. November 22, 2001]

CIRILA ARCABA, petitioner, vs. ERLINDA TABANCURA VDA. DE BATOCAEL, SEIGFREDO C. TABANCURA, DORIS C. TABANCURA, LUZELLI C. TABANCURA, BELEN C. TABANCURA, RAUL A. COMILLE, BERNADETTE A. COMILLE, and ABNER A. COMILLE, respondents. DECISION MENDOZA, J.: Petitioner Cirila Arcaba seeks review on certiorari of the decision[1] of the Court of Appeals, which affirmed with modification the decision[2] of the Regional Trial Court, Branch 10, Dipolog City, Zamboanga del Norte in Civil Case No. 4593, declaring as void a deed of donation inter vivos executed by the late Francisco T. Comille in her favor and its subsequent resolution[3] denying reconsideration. The facts are as follows: On January 16, 1956, Francisco Comille and his wife Zosima Montallana became the registered owners of Lot No. 437-A located at the corner of Calle Santa Rosa (now Balintawak Street) and Calle Rosario (now Rizal Avenue) in Dipolog City, Zamboanga del Norte. The total area of the lot was 418 square meters.[4] After the death of Zosima on October 3, 1980, Francisco and his mother-in-law, Juliana Bustalino Montallana, executed a deed of extrajudicial partition with waiver of rights, in which the latter waived her share consisting of one-fourth (1/4) of the property to Francisco.[5] On June 27, 1916, Francisco registered the lot in his name with the Registry of Deeds.[6] Having no children to take care of him after his retirement, Francisco asked his niece Leticia Bellosillo,[7] the latters cousin, Luzviminda Paghacian,[8] and petitioner Cirila Arcaba, then a widow, to take care of his house, as well as the store inside.[9] Conflicting testimonies were offered as to the nature of the relationship between Cirila and Francisco. Leticia Bellosillo said Francisco and Cirila were lovers since they slept in the same room, [10] while Erlinda Tabancura,[11] another niece of Francisco, claimed that the latter had told her that Cirila was his mistress.[12] On the other hand, Cirila said she was a mere helper who could enter the masters bedroom only when the old man asked her to and that Francisco in any case was too old for her. She denied they ever had sexual intercourse.[13] It appears that when Leticia and Luzviminda were married, only Cirila was left to take care of Francisco.[14] Cirila testified that she was a 34-year old widow while Francisco was a 75-year old widower when she began working for the latter; that he could still walk with her assistance at that time;[15] and that his health eventually deteriorated and he became bedridden.[16] Erlinda Tabancura testified that Franciscos sole source of income consisted of rentals from his lot near the public streets. [17] He did not pay Cirila a regular cash wage as a househelper, though he provided her family with food and lodging.[18] On January 24, 1991, a few months before his death, Francisco executed an instrument denominated Deed of Donation Inter Vivos, in which he ceded a portion of Lot 437-A, consisting of 150 square meters, together with his house, to Cirila, who accepted the donation in the same instrument. Francisco left the larger portion of 268 square meters in his name. The deed stated that the donation was being made in consideration of the faithful services [Cirila Arcaba] had rendered over the past ten (10) years. The deed was notarized by Atty. Vic T. Lacaya, Sr. [19] and later registered by Cirila as its absolute owner.[20]

On October 4, 1991, Francisco died without any children. In 1993, the lot which Cirila received from Francisco had a market value of P57,105.00 and an assessed value of P28,550.00.[21] On February 18, 1993, respondents filed a complaint against petitioner for declaration of nullity of a deed of donation inter vivos, recovery of possession, and damages. Respondents, who are the decedents nephews and nieces and his heirs by intestate succession, alleged that Cirila was the common-law wife of Francisco and the donation inter vivos made by Francisco in her favor is void under Article 87 of the Family Code, which provides: Every donation or grant of gratuitous advantage, direct or indirect, between the spouses during the marriage shall be void, except moderate gifts which the spouses may give each other on the occasion of any family rejoicing. The prohibition shall also apply to persons living together as husband and wife without a valid marriage. On February 25, 1999, the trial court rendered judgment in favor of respondents, holding the donation void under this provision of the Family Code. The trial court reached this conclusion based on the testimony of Erlinda Tabancura and certain documents bearing the signature of one Cirila Comille. The documents were (1) an application for a business permit to operate as real estate lessor, dated January 8, 1991, with a carbon copy of the signature Cirila Comille; [22] (2) a sanitary permit to operate as real estate lessor with a health certificate showing the signature Cirila Comille in black ink;[23] and (3) the death certificate of the decedent with the signature Cirila A. Comille written in black ink.[24] The dispositive portion of the trial courts decision states: WHEREFORE, in view of the foregoing, judgment is rendered: 1. Declaring the Deed of Donation Inter Vivos executed by the late Francisco Comille recorded as Doc. No. 7; Page No. 3; Book No. V; Series of 1991 in the Notarial Register of Notary Public Vic T. Lacaya (Annex A to the Complaint) null and void; 2. Ordering the defendant to deliver possession of the house and lot subject of the deed unto the plaintiffs within thirty (30) days after finality of this decision; and finally 3. Ordering the defendant to pay attorneys fees in the sum of P10,000.00. SO ORDERED.[25] Petitioner appealed to the Court of Appeals, which rendered on June 19, 2000 the decision subject of this appeal. As already stated, the appeals court denied reconsideration. Its conclusion was based on (1) the testimonies of Leticia, Erlinda, and Cirila; (2) the copies of documents purportedly showing Cirilas use of Franciscos surname; (3) a pleading in another civil case mentioning payment of rentals to Cirila as Franciscos common-law wife; and (4) the fact that Cirila did not receive a regular cash wage. Petitioner assigns the following errors as having been committed by the Court of Appeals: (a) The judgment of the Court of Appeals that petitioner was the common-law wife of the late Francisco Comille is not correct and is a reversible error because it is based on a misapprehension of facts, and unduly breaks the chain of circumstances detailed by the totality of the evidence, its findings being predicated on totally incompetent or hearsay evidence, and grounded on mere speculation, conjecture or possibility. (Salazar v. Gutierrez, 33 SCRA 243 and other cases; cited in Quiason, Philippine Courts and their Jurisdictions, 1993 ed., p. 604) (b) The Court of Appeals erred in shifting the burden of evidence from the plaintiff to defendant. (Bunyi v. Reyes, 39 SCRA 504; Quiason, id.)

(c) The Court of Appeals decided the case in a way probably not in accord with law or with the applicable jurisprudence in Rodriguez v. Rodriguez, 20 SCRA 908, and Liguez v. CA, 102 Phil. 577, 584.[26] The issue in this case is whether the Court of Appeals correctly applied Art. 87 of the Family Code to the circumstances of this case. After a review of the records, we rule in the affirmative. The general rule is that only questions of law may be raised in a petition for review under Rule 45 of the Rules of Court, subject only to certain exceptions: (a) when the conclusion is a finding grounded entirely on speculations, surmises, or conjectures; (b) when the inference made is manifestly mistaken, absurd, or impossible; (c) where there is grave abuse of discretion; (d) when the judgment is based on a misapprehension of facts; (e) when the findings of fact are conflicting; (f) when the Court of Appeals, in making its findings, went beyond the issues of the case and the same are contrary to the admissions of both appellant and appellee; (g) when the findings of the Court of Appeals are contrary to those of the trial court; (h) when the findings of fact are conclusions without citation of specific evidence on which they are based; (i) when the finding of fact of the Court of Appeals is premised on the supposed absence of evidence but is contradicted by the evidence on record; and (j) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties and which, if properly considered, would justify a different conclusion.[27] It appearing that the Court of Appeals based its findings on evidence presented by both parties, the general rule should apply. In Bitangcor v. Tan,[28] we held that the term cohabitation or living together as husband and wife means not only residing under one roof, but also having repeated sexual intercourse. Cohabitation, of course, means more than sexual intercourse, especially when one of the parties is already old and may no longer be interested in sex. At the very least, cohabitation is the public assumption by a man and a woman of the marital relation, and dwelling together as man and wife, thereby holding themselves out to the public as such. Secret meetings or nights clandestinely spent together, even if often repeated, do not constitute such kind of cohabitation; they are merely meretricious.[29] In this jurisdiction, this Court has considered as sufficient proof of common-law relationship the stipulations between the parties,[30] a conviction of concubinage,[31] or the existence of illegitimate children.[32] Was Cirila Franciscos employee or his common-law wife? Cirila admitted that she and Francisco resided under one roof for a long time. It is very possible that the two consummated their relationship, since Cirila gave Francisco therapeutic massage and Leticia said they slept in the same bedroom. At the very least, their public conduct indicated that theirs was not just a relationship of caregiver and patient, but that of exclusive partners akin to husband and wife. Aside from Erlinda Tabancuras testimony that her uncle told her that Cirila was his mistress, there are other indications that Cirila and Francisco were common-law spouses. Seigfredo Tabancura presented documents apparently signed by Cirila using the surname Comille. As previously stated, these are an application for a business permit to operate as a real estate lessor, [33] a sanitary permit to operate as real estate lessor with a health certificate,[34] and the death certificate of Francisco.[35] These documents show that Cirila saw herself as Franciscos common-law wife, otherwise, she would not have used his last name. Similarly, in the answer filed by Franciscos lessees in Erlinda Tabancura, et al. vs. Gracia Adriatico Sy and Antonio Sy, RTC Civil Case No. 4719 (for collection of rentals), these lessees referred to Cirila as the common-law spouse of Francisco. Finally, the fact that Cirila did not demand from Francisco a regular cash wage is an indication that she was not simply a caregiver-employee, but Franciscos common law spouse. She was, after all, entitled to a regular cash wage under the law.[36] It is difficult to believe that she stayed with Francisco and served him out of pure beneficence. Human reason would thus lead to the conclusion that she was Franciscos common-law spouse. Respondents having proven by a preponderance of evidence that Cirila and Francisco lived together as husband and wife without a valid marriage, the inescapable conclusion is that the donation made by Francisco in favor of Cirila is void under Art. 87 of the Family Code. WHEREFORE, the decision of the Court of Appeals affirming the decision of the trial court is hereby AFFIRMED. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

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 court 4 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, respondentappellant 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. Osmea, 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 appelleehusband, 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. Osmea, 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-appelleehusband or his family. The alleged benefit, if any, continuously harped by respondentsappellants, 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 corespondent 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; GTractors, Inc. vs. CA do 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 executives are often asked to stand as surety for their company's loan obligations. This is especially true if the corporate officials have sufficient property of their 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. WHEREFORE, the petition for review should be, as it is hereby, DENIED for lack of merit. SO ORDERED. Regalado, Melo, Puno and Mendoza, JJ., concur.

Republic of the Philippines SUPREME COURT Manila THIRD DIVISION

G.R. No. 70082 August 19, 1991 SPOUSES RICKY WONG and ANITA CHAN, LEONARDO JOSON, JUANITO SANTOS, EMERITO SICAT and CONRADO LAGMAN, petitioners, vs. HON. INTERMEDIATE APPELLATE COURT and ROMARICO HENSON, respondents. Feliciano C. Tumale for petitioners. Benjamin Dadios and Bausa, Ampil, Suarez, Paredes & Bausa for private respondent.

FERNAN, C.J.:p Submitted for adjudication in the instant petition for review on certiorari is the issue of whether or not the execution of a decision in an action for collection of a sum of money may be nullified on the ground that the real properties levied upon and sold at public auction are the alleged exclusive properties of a husband who did not participate in his wife's business transaction from which said action stemmed. Private respondent Romarico Henson married Katrina Pineda on January 6, 1964. 1 They have three children but even during the early years of their marriage, Romarico and Katrina had been most of the time living separately. The former stayed in Angeles City while the latter lived in Manila. During the marriage or on January 6, 1971, Romarico bought a 1,787 square-meter parcel of land in Angeles City for P11,492 from his father, Dr. Celestino L. Henson 2 with money borrowed from an officemate. His father need the amount for investments in Angeles City and Palawan. 3 Meanwhile, in Hongkong sometime in June 1972, Katrina entered into an agreement with Anita Chan whereby the latter consigned to Katrina pieces of jewelry for sale valued at 199,895 Hongkong dollars or P321,830.95. 4 When Katrina failed to return the pieces of jewelry within the 20-day period agreed upon, Anita Chan demanded payment of their value. On September 18, 1972, Katrina issued in favor of Anita Chan a check for P55,000 which, however, was dishonored for lack of funds. Hence, Katrina was charged with estafa before the then Court of First Instance of Pampanga and Angeles City, Branch IV. 5 After trial, the lower court rendered a decision dismissing the case on the ground that Katrina's liability was not criminal but civil in nature as no estafa was committed by the issuance of the check in payment of a pre-existing obligation. 6 In view of said decision, Anita Chan and her husband Ricky Wong filed against Katrina and her husband Romarico Henson, an action for collection of a sum of money also in the same branch of the aforesaid court. 7 The records of the case show that Atty. Gregorio Albino, Jr. filed an answer with counterclaim but only in behalf of Katrina. When the case was called for pre-trial, Atty. Albino once again appeared as counsel for Katrina only. While it is true that during subsequent hearings, Atty. Expedite Yumul, who collaborated with Atty. Albino, appeared for the defendants, it is not shown on record that said counsel

also represented Romarico. In fact, a power of attorney which Atty. Albino produced during the trial, showed that the same was executed solely by Katrina. 8 After trial, the court promulgated a decisions 9 in favor of the Wongs. It ordered Katrina and Romarico Henson to pay the Wongs HK$199,895.00 or P321,830.95 with legal interest from May 27, 1975, the date of filing of the complaint, until fully paid; P20,000 as expenses for litigation; P15,000 as attorney's fees, and the costs of the suit. A writ of execution was thereafter issued. Levied upon were four lots in Angeles City covered by Transfer Certificates of Title Nos. 30950, 30951, 30952 and 30953 all in the name of Romarico Henson ... married to Katrina Henson. 10 The public auction sale was first set for October 30, 1977 but since said date was declared a public holiday, Deputy Sheriff Emerito Sicat reset the sale to November 11, 1977. On said date, the following properties registered in the name of Romarico Henson "married to Katrina Henson" were sold at public auction: (a) two parcels of land covered by Transfer Certificates of Title Nos. 30950 and 30951 with respective areas of 293 and 289 square meters at P145,000 each to Juanito L. Santos, 11 and (b) two parcels of land covered by Transfer Certificates of Title Nos. 30952 and 30953 with respective areas of 289 and 916 square meters in the amount of P119,000.00 to Leonardo B. Joson. 12 After the inscription on Transfer Certificate of Title No. 30951 of the levy on execution of the judgment in Civil Case No. 2224, the property covered by said title was extrajudicially foreclosed by the Rural Bank of Porac, Pampanga on account of the mortgage loan of P8,000 which Romarico and Katrina had obtained from said bank. The property was sold by the sheriff to the highest bidder for P57,000 on September 9, 1977. On September 14, 1978, Juanito Santos, who had earlier bought the same property at public auction on November 11, 1977, redeemed it by paying the sum of P57,000 plus the legal interest of P6,840.00 or a total amount of P63,840.00. 13 About a month before such redemption or on August 8, 1 978, Romarico filed an action for the annulment of the decision in Civil Case No. 2224 as well as the writ of execution, levy on execution and the auction sale therein in the same Court of First Instance. 14 Romarico alleged that he was "not given his day in court" because he was not represented by counsel as Attys. Albino and Yumul appeared solely for Katrina; that although he did not file an answer to the complaint, he was not declared in default in the case; that while Atty. Albino received a copy of the decision, he and his wife were never personally served a copy thereof; that he had nothing to do with the business transactions of Katrina as he did not authorize her to enter into such transactions; and that the properties levied on execution and sold at public auction by the sheriff were his capital properties and therefore, as to him, all the proceedings had in the case were null and void. On November 10, 1978, the lower court issued an order restraining the Register of Deeds of Angeles City from issuing the final bill of sale of Transfer Certificates of Title Nos. 30950 and 30951 in favor of Juanito Santos and Transfer Certificates of Title Nos. 30952 and 30953 in favor of Leonardo Joson until further orders of the court. 15On January 22, 1979, upon motion of Romarico, the court issued a writ of preliminary injunction enjoining the sheriff from approving the final bill of sale of the land covered by the aforementioned certificates of title and the Register of Deeds of Angeles City from registering said certificates of title in the names of Santos and Joson until the final outcome of the case subject to Romarico's posting of a bond in the amount of P321,831.00. 16 After trial on the merits, the lower court 17 rendered a decision holding that Romarico was indeed not given his day in court as he was not represented by counsel nor was he notified of the hearings therein although he was never declared in default. Noting that the complaint in Civil Case No. 2224 as well as the testimonial and documentary evidence adduced at the trial in said case do not show that Romarico had anything to do with the transactions between Katrina and Anita Chan, the court ruled that the judgment in Civil Case No. 2224 "is devoid of legal or factual basis which is not even supported by a finding of fact

or ratio decidendi in the body of the decision, and may be declared null and void ... pursuant to a doctrine laid down by the Supreme Court to the effect that the Court of First Instance or a branch thereof, has authority and jurisdiction to try and decide an action for annulment of a final and executory judgment or order rendered by another court of first instance or of a branch thereof (Gianan vs. Imperial, 55 SCRA 755)." 18 On whether or not the properties lenied upon and sold at public auction may be reconveyed to Romarico, the court, finding that there was no basis for holding the conjugal partnership liable for the personal indebtedness of Katrina, ruled in favor of reconveyance in view of the jurisprudence that the interest of the wife in the conjugal partnership property being inchoate and therefore merely an expectancy, the same may not be sold or disposed of for value until after the liquidation and settlement of the community assets. The dispositive portion of the decision reads: WHEREFORE, and in view of the foregoing, judgment is hereby rendered in favor of the plaintiff and against all the defendants, as follows: (a) The Decision of the Court of First Instance of Pampanga and Angeles City, Branch IV, rendered in Civil Case No. 2224, entitled "RICKY WONG, ET AL. vs. KATRINA PINEDA HENSON and ROMARICO HENSON", is hereby declared null and void, only as far as it affects plaintiff herein Romarico Henson; (b) The Writ of Execution, levy in execution and auction sale of the conjugal property of the spouses Romarico Henson and Katrina Pineda Henson which were sold at public auction on November 11, 1977, without notice to plaintiff herein, by Deputy Sheriff Emerito Sicat, are likewise declared null and void and of no force and effect; (c) Defendants Emerito Sicat and Conrado Lagman, in their official capacity as Sheriff and Register of Deeds, respectively, are enjoined permanently from issuing and/or registering the corresponding deeds of sale affecting the property; (d) The aforementioned buyers are directed to reconvey the property they have thus purchased at public auction to plaintiff Romarico Henson; (e) As far as the claim for reimbursement filed by Juanito Santos concerning the redemption of the property covered by Transfer Certificate of Title No. 30951 from the Rural Bank of Porac, which foreclosed the same extrajudicially, is concerned, plaintiff Romarico Henson may redeem the same within the period and in the manner prescribed by law, after the corresponding deed of redemption shall have been registered in the Office of the Registry of Deeds for Angeles City; (f) Defendants Spouses Ricky Wong and Anita Chan are, with the exception of the defendants Juanito Santos, Leonardo Joson, Sheriff and Register of Deeds, are ordered jointly and severally, to pay the plaintiff Romarico Henson the sum of P10,000.00, corresponding to the expenses of litigation, with legal interest thereon from the time this suit was filed up to the time the same shall have been paid, plus P5,000.00 for and as attorney's fees, and the costs of suit; and (g) The counterclaims respectively filed on behalf of all the defendants in the aboveentitled case are hereby DISMISSED. SO ORDERED.

The defendants appealed to the then Intermediate Appellate Court. In its decision of January 22, 1985 19 the said court affirmed in toto the decision of the lower court. It added that as to Romarico, the judgment in Civil Case No. 2224 had not attained finality as the decision therein was not served on him and that he was not represented by counsel. Therefore, estoppel may not be applied against him as, not having been served with the decision, Romarico did not know anything about it. Corollarily, there can be no valid writ of execution inasmuch as the decision had not become final as far as Romarico is concerned. On whether the properties may be levied upon as conjugal properties, the appellate court ruled in the negative. It noted that the properties are Romarico' s exclusive capital having been bought by him with his own funds. But granting that the properties are conjugal, they cannot answer for Katrina's obligations as the latter were exclusively hers because they were incurred without the consent of her husband, they were not for the daily expenses of the family and they did not redound to the benefit of the family. The court underscored the fact that no evidence has been submitted that the administration of the conjugal partnership had been transferred to Katrina either by Romarico or by the court before said obligations were incurred. The appellants filed a motion for reconsideration of the decision of the appellate court but the same was denied for lack of merit on February 6, 1985. 20 Hence, the instant petition for review on certiorari. Petitioners contend that, inasmuch as the Henson spouses were duly represented by Atty. Albino as shown by their affidavit of August 25, 1977 wherein they admitted that they were represented by said counsel until Atty. Yumul took over the actual management and conduct of the case and that Atty. Albino had not withdrawn as their counsel, the lower court "did not commit an error" in serving a copy of the decision in Civil Case No. 2224 only on Atty. Albino. Moreover, during the 2-year period between the filing of the complaint in Civil Case No. 2224 and the public auction sale on November 11, 1977, Romarico remained silent thereby making him in estoppel and guilty of laches. Petitioners further aver that there being sufficient evidence that the auction sale was conducted in accordance with law, the acts of the sheriffs concerned are presumed to be regular and valid. But granting that an irregularity consisting of the non-notification of Romarico attended the conduct of the auction sale, the rights of Santos and Joson who were "mere strangers who participated as the highest bidders" therein, may not be prejudiced. Santos and Joson bought the properties sincerely believing that the sheriff was regularly performing his duties and no evidence was presented to the effect that they acted with fraud or that they connived with the sheriff. However, should the auction sale be nullified, petitioners assert that Romarico should not be unduly enriched at the expense of Santos and Joson. The petitioners' theory is that Romarico Henson was guilty of laches and may not now belatedly assert his rights over the properties because he and Katrina were represented by counsel in Civil Case No. 2224. Said theory is allegedly founded on the perception that the Hensons were like any other ordinary couple wherein a spouse knows or should know the transactions of the other spouse which necessarily must be in interest of the family. The factual background of this case, however, takes it out of said ideal situation. Romarico and Katrina had in fact been separated when Katrina entered into a business deal with Anita Wong. Thus, when that business transaction eventually resulted in the filing of Civil Case No. 2224, Romarico acted, or, as charged by petitioners, failed to act, in the belief that he was not involved in the personal dealings of his estranged wife. That belief was buttressed by the fact that the complaint itself did not mention or implicate him other than as the husband of Katrina. On whether Romarico was also represented by Atty. Albino, Katrina's counsel, the courts below found that: ... Atty. Albino filed an Answer with Counterclaims dated July 25, 1975 solely on behalf of defendant Katrina Henson. The salutary statement in that Answer categorically reads: ...

COMES NOW THE DEFENDANT KATRINA HENSON by and through undersigned counsel, in answer to plaintiffs' complaint respectfully alleges: ... . That Answer was signed by GREGORIO ALBINO, JR., over the phrase COUNSEL FOR DEFENDANT KATRINA HENSON. Again, when Civil Case No. 2224 was called for pre-trial on November 27, 1975, before then Presiding Judge Bienvenido Ejercito, it is clearly stated on page 2 of the day's stenographic notes, under "APPEARANCES that Atty. Albino, Jr. appeared as COUNSEL FOR DEFENDANT KATRINA HENSON". And when the case was called, Atty. Jose Baltazar, Sr. appeared for the plaintiffs while Atty. Albino categorically appeared "FOR DEFENDANT KATRINA HENSON". It might be true that in subsequent hearings, Atty. Expedito Yumul 'appeared as counsel for the defendants,' but the whole trouble is that he never expressly manifested to the Court that he was likewise actually representing defendant "ROMARICO HENSON", for it cannot be disputed that Atty. Yumul only entered his appearance in collaboration with Atty. Albino (see p. 2 tsn, January 26, 1976, Espinosa), who in turn entered his initial appearance during the pre- trial, and through the filing of an Answer, for defendant KATRINA HENSON. As a matter of fact, the Power of Attorney which Atty. Albino produced during the pre-trial was executed solely by defendant KATRINA HENSON. Accordingly, as collaborating counsel, Atty. Yumul cannot, by any stretch of the imagination, be considered as duly authorized to formally appear likewise on behalf of defendant ROMARICO HENSON for whom principal counsel of record Atty. Gregorio Albino, Jr. never made any formal appearance. On this score, it is not amiss to state that "A spring cannot rise higher than its source:. Now, what about that statement in the aforementioned joint affidavit of the spouses KATRINA HENSON and ROMARICO HENSON, to the effect that our first lawyer in said case was Atty. Gregorio Albino, Jr., and sometime later Atty. Expedito B. Yumul took over ... That statement which plaintiff ROMARICO HENSON was made to sign by Atty. Yumul on August 25,1977, after the filing of this case, allegedly for the purpose of dissolving the writ of execution, as claimed in paragraph XIV of the complaint herein, and is satisfactorily explained by both plaintiff herein and his wife, while on cross-examination by Atty. Baltazar, Sr., and We quote: Q So, the summons directed your filing of your Answer for both of you, your wife and your good self? A Yes, sir but may I add, I received the summons but I did not file an answer because my wife took a lawyer and that lawyer I think will protect her interest and my interest being so I did not have nothing to do in the transaction which is attached to the complaint.' (TSN, Jan. 14, 1980, pp. 52-53). That plaintiff never appeared in Civil Case No. 2224, nor was he therein represented by counsel was impliedly admitted by defendants' counsel of records thru a question he propounded on cross, and the answer given by Katrina Pineda, to wit:

Q How about your husband, do you remember if he physically appeared in that Civil Case No. 2224, will you tell us if he was represented by counsel as a party defendant? A No, sir, he did not appear. Q You are husband and wife, please tell us the reason why you have your own counsel in that case whereas Romarico Henson did not appear nor a counsel did not appear in that proceedings (TSN, Feb. 25,1980, pp. 6-7). xxx xxx xxx A Because that case is my exclusive and personal case, he has nothing to do with that, sir. (TSN, Feb. 25, 1980, p. 9). (Rollo, pp. 17-20) Hence, laches may not be charged against Romarico because, aside from the fact that he had no knowledge of the transactions of his estranged wife, he was also not afforded an opportunity to defend himself in Civil Case No. 2224. 21 There is no laches or even finality of decision to speak of with respect to Romarico since the decision in Civil Case No. 2224 is null and void for having been rendered without jurisdiction for failure to observe the notice requirements prescribed by law. 22 Failure to notify Romarico may not be attributed to the fact that the plaintiffs in Civil Case No. 2224 acted on the presumption that the Hensons were still happily married because the complaint itself shows that they did not consider Romarico as a party to the transaction which Katrina undertook with Anita Wong. In all likelihood, the plaintiffs merely impleaded Romarico as a nominal party in the case pursuant to the provisions of Rule 3, Section 4 of the Rules of Court. Consequently, the writ of execution cannot be issued against Romarico as he has not yet had his day in court 23and, necessarily, the public auction sale is null and void. 24 Moreover, the power of the court in the execution of judgments extends only over properties unquestionably belonging to the judgment debtor. 25 On the matter of ownership of the properties involved, however, the Court disagrees with the appellate court that the said properties are exclusively owned by Romarico. Having been acquired during the marriage, they are still presumed to belong to the conjugal partnership 26 even though Romarico and Katrina had been living separately. 27 The presumption of the conjugal nature of the properties subsists in the absence of clear, satisfactory and convincing evidence to overcome said presumption or to prove that the properties are exclusively owned by Romarico. 28 While there is proof that Romarico acquired the properties with money he had borrowed from an officemate, it is unclear where he obtained the money to repay the loan. If he paid it out of his salaries, then the money is part of the conjugal assets 29 and not exclusively his. Proof on this matter is of paramount importance considering that in the determination of the nature of a property acquired by a person during covertrue, the controlling factor is the source of the money utilized in the purchase. The conjugal nature of the properties notwithstanding, Katrina's indebtedness may not be paid for with them her obligation not having been shown by the petitioners to be one of the charges against the conjugal partnership. 30In addition to the fact that her rights over the properties are merely inchoate prior to the liquidation of the conjugal partnership, the consent of her husband and her authority to incur such indebtedness had not been alleged in the complaint and proven at the trial. 31 Furthermore, under the Civil Code (before the effectivity of the Family Code on August 3, 1988), 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 the purpose of purchasing things necessary for the support of the family if

the husband fails to deliver the proper sum; 32 when the administration of the conjugal partnership is transferred to the wife by the courts 33 or by the husband 34 and when the wife gives moderate donations for charity. 35 Having failed to establish that any of these circumstances occurred, the Wongs may not bind the conjugal assets to answer for Katrina's personal obligation to them. Petitioners' contention that the rights of Santos and Joson as innocent buyers at the public auction sale may not be prejudiced, is, to a certain extent, valid. After all, in the absence of proof that irregularities attended the sale, the same must be presumed to have been conducted in accordance with law. There is, however, a peculiar factual circumstance that goes against the grain of that general presumption the properties levied upon and sold at the public auction do not exclusively belong to the judgment debtor. Thus, the guiding jurisprudence is as follows: The rule in execution sales is that an execution creditor acquires no higher or better right than what the execution debtor has in the property levied upon. The purchaser of property on sale under execution and levy takes as assignee, only as the judicial seller possesses no title other than that which would pass by an assignment by the owner. "An execution purchaser generally acquires such estate or interest as was vested in the execution debtor at the time of the seizure on execution, and only such interest, taking merely a quit-claim of the execution debtor's title, without warranty on the part of either the execution officer or of the parties, whether the property is realty or personalty. This rule prevails even if a larger interest in the property was intended to be sold. Accordingly, if the judgment debtor had no interest in the property, the execution purchaser acquires no interest therein." (Pacheco vs. Court of Appeals, L-48689, August 31, 1987, 153 SCRA 382, 388-389 quoting Laureano vs. Stevenson, 45 Phil. 252; Cabuhat vs. Ansery, 42 Phil. 170; Fore v. Manove, 18 Cal. 436 and 21 Am. Jur., 140-141. Emphasis supplied.) Applying this jurisprudence, execution purchasers Santos and Joson possess no rights which may rise above judgment debtor Katrina's inchoate proprietary rights over the properties sold at public auction. After all, a person can sell only what he owns or is authorized to sell and the buyer can, as a consequence, acquire no more that what the seller can legally transfer. 36 But, inasmuch as the decision in Civil Case No. 2224 is void only as far as Romarico and the conjugal properties are concerned, the same may still be executed by the Spouses Wong against Katrina Henson personally and exclusively. The Spouses Wong must return to Juanito Santos and Leonardo Joson the purchase prices of P145,000 and P119,000 respectively, received by said spouse from the public auction sale. The redemption made by Santos in the foreclosure proceeding against Romarico and Katrina Henson filed by the Rural Bank of Porac, should, however, be respected unless Romarico exercises his right of redemption over the property covered by Transfer Certificate of Title No. 30951 in accordance with law. WHEREFORE, the decisions of the appellate court and the lower court in Civil Case No. 28-09 are hereby AFFIRMED subject to the modifications above stated. No costs. SO ORDERED. Gutierrez, Jr., Feliciano, Bidin and Davide, Jr., JJ., concur.

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 146504 April 9, 2002

HONORIO L. CARLOS, petitioner, vs. MANUEL T. ABELARDO, respondent. KAPUNAN, J.: Assailed in this petition for review on certiorari under Rule 45 of the Rules of Court is the decision of the Court of Appeals dated November 10, 2000 in CA-G.R. CV No. 54464 which reversed and set aside the decision of the Regional Trial Court of Valenzuela, Branch 172, and dismissed for insufficiency of evidence the complaint for a sum of money and damages filed by herein petitioner Honorio Carlos against respondent Manuel Abelardo, his son-in-law, and the latters wife, Maria Theresa Carlos-Abelardo. Petitioner averred in his complaint filed on October 13, 1994 that in October 1989, respondent and his wife Maria Theresa Carlos-Abelardo approached him and requested him to advance the amount of US$25,000.00 for the purchase of a house and lot located at #19952 Chestnut Street, Executive Heights Village, Paranaque, Metro Manila. To enable and assist the spouses conduct their married life independently and on their own, petitioner, in October 31, 1989, issued a check in the name of a certain Pura Vallejo, seller of the property, who acknowledged receipt thereof.1 The amount was in full payment of the property. When petitioner inquired from the spouses in July 1991 as to the status of the amount he loaned to them, the latter acknowledged their obligation but pleaded that they were not yet in a position to make a definite settlement of the same.2Thereafter, respondent expressed violent resistance to petitioners inquiries on the amount to the extent of making various death threats against petitioner.3 On August 24, 1994, petitioner made a formal demand for the payment of the amount of US$25,000.00 but the spouses failed to comply with their obligation.4Thus, on October 13, 1994, petitioner filed a complaint for collection of a sum of money and damages against respondent and his wife before the Regional Trial Court of Valenzuela, Branch 172, docketed as Civil Case No. 4490-V-94. In the complaint, petitioner asked for the payment of the US$25,000.00 or P625,000.00, its equivalent in Philippine currency plus legal interest from date of extra-judicial demand.5Petitioner likewise claimed moral and exemplary damages, attorneys fees and costs of suit from respondent.6 As they were separated in fact for more than a year prior to the filing of the complaint, respondent and his wife filed separate answers. Maria Theresa Carlos-Abelardo admitted securing a loan together with her husband, from petitioner.7She claimed, however, that said loan was payable on a staggered basis so she was surprised when petitioner demanded immediate payment of the full amount.8 In his separate Answer, respondent admitted receiving the amount of US$25,000.00 but claimed that: xxx a. Defendant (respondent) xxx revived that otherwise dormant construction firm H.L. CARLOS CONSTRUCTION of herein plaintiff which suffered tremendous setback after the assassination of Senator Benigno Aquino;

b. Working day and night and almost beyond human endurance, defendant devoted all his efforts and skill, used all his business and personal connection to be able to revive the construction business of plaintiff; c. Little-by-little, starting with small construction business, defendant was able to obtain various construction jobs using the name H.L. CARLOS CONSTRUCTION and the income derived therefrom were deposited in the name of such firm of plaintiff, d. Defendant xxx was made to believe that the earnings derived from such construction will be for him and his family since he was the one working to secure the contract and its completion, he was allowed to use the facilities of the plaintiff; e. The plaintiff seeing the progress brought about by defendant xxx to his company proposed a profit sharing scheme to the effect that all projects amounting to more than P10 million shall be for the account of plaintiff; lower amount shall be for defendants account but still using H.L. CARLOS CONSTRUCTION. f. But, to clear account on previous construction contracts that brought income to H.L.CARLOS CONSTRUCTION, out of which defendant derived his income, plaintiff gave the amount of US$25,000.00 to defendant to square off account and to start the arrangement in paragraph (e) supra; g. That, the said US$25,000.00 was never intended as loan of defendant. It was his share of income on contracts obtained by defendant; xxx 9 Respondent denied having made death threats to petitioner and by way of compulsory counterclaim, he asked for moral damages from petitioner for causing the alienation of his wifes love and affection, attorneys fees and costs of suit.10 On June 26, 1996, the Regional Trial Court rendered a decision in favor of petitioner, the dispositive portion of which reads: WHEREFORE, judgment is hereby rendered as follows: 1. Ordering the defendants to pay plaintiff the amount of US$25,000.00 or its equivalent in Philippine Currency at the time of its payment, plus legal interest thereon from August 24, 1994 until fully paid; 2. Ordering the defendant Manuel T. Abelardo to pay the plaintiff the amount of P500,000.00 representing moral damages and the further amount of P50,000.00 as exemplary damages; and 3. Ordering the defendants to pay the plaintiff the amount of P100,000.00 as attorneys fees, plus the costs of suit. SO ORDERED.11 Respondent appealed the decision of the trial court to the Court of Appeals. On November 10, 2000, the Court of Appeals reversed and set aside the trial courts decision and dismissed the complaint for insufficiency of evidence to show that the subject amount was indeed loaned by petitioner to respondent and his wife. The Court of Appeals found that the amount of US$25,000.00 was respondents share in the profits of H.L. Carlos Construction. The dispositive portion of the Court of Appeals decision states:

WHEREFORE, premises considered, the Decision of the Regional Trial Court of Valenzuela, Branch 172 in Civil Case No. 4490-V-94 is hereby REVERSED and SET ASIDE and a new one entered DISMISSING the Complaint for insufficiency of evidence. The claim for damages by defendant-appellant is likewise DISMISSED, also for insufficiency of evidence, because of his failure to present substantial evidence to prove that plaintiff-appellee caused the defendant-spouses separation. Costs against the plaintiff-appellee. SO ORDERED.12 A motion for reconsideration of the above decision having been denied on, petitioner brought this appeal assigning the following errors: THE COURT OF APPEALS ERRED IN FINDING INSUFFICIENT EVIDENCE TO PROVE THAT THE AMOUNT OF US$25,000.00 WAS A LOAN OBTAINED BY PRIVATE RESPONDENT AND HIS WIFE FROM PETITIONER. THE COURT OF APPEALS ERRED IN HOLDING THAT THE US$25,000.00 WAS GIVEN AS PRIVATE RESPONDENTS SHARE IN THE PROFITS OF H.L. CARLOS CONSTRUCTION, INC. AND THAT THE FILING OF THE COMPLAINT IS A HOAX. THE COURT OF APPEALS ERRED IN NULLIFYING THE AWARD OF DAMAGES FOR LACK OF PROOF THEREOF. We find merit in the petition. As gleaned from the records, the following facts are undisputed: (1) there was a check in the amount of US$25,000.00 issued by petitioner; (2) this amount was received by respondent and his wife and given to a certain Pura Vallejo for the full payment of a house and lot located at #19952 Chestnut Street, Executive Heights Village, Paranaque, Metro Manila; (3) this house and lot became the conjugal dwelling of respondent and his wife; and (4) respondents wife executed an instrument acknowledging the loan but which respondent did not sign. To prove his claim that the amount was in the nature of a loan or an advance he extended to respondent and his wife, petitioner presented Bankers Trust Check No. 337 in the amount of US$25,000.00 he issued on October 31, 1989 to Pura Vallejo.13 He also introduced in evidence an instrument executed by respondents wife on July 31, 1991 acknowledging her and her husbands accountability to petitioner for the said amount which was advanced in payment of a house and lot located at #19952 Chestnut Street, Executive Heights Subdivision, Paranaque.14 A formal demand letter by counsel for petitioner dated August 24, 1994 sent to and received by respondent was also on record.15 All these pieces of evidence, taken together with respondents admission that he and his wife received the subject amount and used the same to purchase their house and lot, sufficiently prove by a preponderance of evidence petitioners claim that the amount of US$25,000.00 was really in the nature of a loan. Respondent tried to rebut petitioners evidence by claiming that the US$25,000.00 was not a loan but his share in the profits of H.L. Carlos Construction. He alleged that he received money from petitioner amounting to almost P3 million as his share in the profits of the corporation. To prove this, he presented ten (10) Bank of the Philippine Islands (BPI) checks allegedly given to him by petitioner.16He argued that if indeed, he and his wife were indebted to petitioner, the latter could have easily deducted the amount of the said loan from his share of the profits.

Respondent fails to convince this Court. All the checks presented by respondent, which he claims to be his share in the profits of petitioners company, were all in the account of H.L. Carlos Construction.17 On the other hand, the Bankers Trust Check in the amount of US$25,000.00 was drawn from the personal account of petitioner.18Assuming to be true that the checks presented by respondent were his profits from the corporation, then all the more does this prove that the amount of US$25,000.00 was not part of such profits because it was issued by petitioner from his own account. Indeed, if such amount was respondents share of the profits, then the same should have been issued under the account of H.L. Carlos Construction. Moreover, respondent failed to substantiate his claim that he is entitled to the profits and income of the corporation. There was no showing that respondent was a stockholder of H.L. Carlos Construction. His name does not appear in the Articles of Incorporation as well as the Organizational Profile of said company either as stockholder or officer.19 Not being a stockholder, he cannot be entitled to the profits or income of said corporation. Neither did respondent prove that he was an employee or an agent so as to be entitled to salaries or commissions from the corporation. We quote with favor the disquisition of the trial court on this point: Early in time, it must be noted 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. The defendants never denied that the check of US$25,000.00 was used to purchase the subject house and lot. They do not deny that the same served as their conjugal home, thus benefiting the family. On the same principle, acknowledgment of the loan made by the defendant-wife binds the conjugal partnership since its proceeds redounded to the benefit of the family. Hence, defendant-husband and defendant-wife are jointly and severally liable in the payment of the loan. Defendant-husband cannot allege as a defense that the amount of US $25,000.00 was received as his share in the income or profits of the corporation and not as a loan. Firstly, defendanthusband does not appear to be a stockholder nor an employee nor an agent of the corporation, H. L. Carlos Construction, Inc. Since he is not a stockholder, he has no right to participate in the income or profits thereof. In the same manner that as he is not an employee nor an agent of H. L. Carlos Construction, Inc., he has no right to receive any salary or commission therefrom. Secondly, the amount advanced for the purchase of the house and lot came from the personal account of the plaintiff. If, indeed, it was to be construed as defendant-husbands share in the profits of the corporation, the checks should come from the corporations account and not from the plaintiffs personal account, considering that the corporation has a personality separate and distinct from that of its stockholders and officers.1wphi1.nt Even granting that the checks amount to US $3,000.000.00 given by the plaintiff to the defendantspouses was their share in the profits of the corporation, still there is no sufficient evidence to establish that the US $25,000.00 is to be treated similarly. Defendant-husband in invoking the defense of compensation argued that if indeed they were indebted to the plaintiff, the latter could have applied their share in the proceeds or income of the corporation to the concurrent amount of the alleged loan, instead of giving the amount of P3,000,000.00 to them. This argument is untenable. Article 1278 of the Civil Code provides that compensation shall take place when two persons, in their own right, are debtors and creditors of each other. As its indicates, compensation is a sort of balancing between two obligations. In the instant case, the plaintiff and the defendant-husband are not debtors and creditors of each other. Even granting that the defendant-husbands claim to the profits of the corporation is justified, still compensation cannot extinguish his loan obligation to the plaintiff because under such assumption, the defendant is dealing with the corporation and not with the plaintiff in his personal capacity. Hence, compensation cannot take place.

The Court of Appeals, thus, erred in finding that respondents liability was not proved by preponderance of evidence. On the contrary, the evidence adduced by petitioner sufficiently established his claim that the US$25,000.00 he advanced to respondent and his wife was a loan. The loan is the liability of the conjugal partnership pursuant to Article 121 of the Family Code: Article 121. The conjugal partnership shall be liable for: xxx (2) All debts and obligations contracted during the marriage by the designated administratorspouse 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 been benefited; 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. xxx While respondent did not and refused to sign the acknowledgment executed and signed by his wife, undoubtedly, the loan redounded to the benefit of the family because it was used to purchase the house and lot which became the conjugal home of respondent and his family. Hence, notwithstanding the alleged lack of consent of respondent, under Art. 21 of the Family Code, he shall be solidarily liable for such loan together with his wife. We also find sufficient basis for the award of damages to petitioner, contrary to the findings of the Court of Appeals that petitioner is not entitled thereto. Petitioners allegations of verbal and written threats directed against him by respondent is duly supported by evidence on record. He presented two witnesses, Irineo Pajarin and Randy Rosal, who testified on separate incidents where threats were made by respondent against petitioner. Randy Rosal, driver of petitioner, declared that around three o clock in the afternoon of September 15, 1991, he was sent by respondents wife on an errand to deliver the acknowledgment letter to respondent for him to sign. Respondent did not sign the acknowledgment and instead, wrote a letter addressed to petitioner threatening him. He narrated what took place thereafter: xxx Q When you were requested by Ma. Theresa C. Abelardo to bring a letter to herein defendant Manuel Abelardo for him to sign the same, do you know whether that letter was actually signed by Manuel Abelardo? A No, sir. xxx Q And what happened when Manuel Abelardo refused to sign that letter coming from the other defendant?

He made me wait and he prepared a letter to Mr. Honorio Carlos, sir. xxx

Q A Q A

Where were you at the time when this defendant Manuel Abelardo prepared this letter? In his house, sir. And where did he actually prepare that letter? At the dining table, sir.

Q How far were you from Manuel Abelardo from the dining table at the time when he was preparing a letter. A Around 1 meter, sir.

Q And do you know where in, what particular paper did Mr. Abelardo prepare or write this letter? A He wrote it in a Manila envelope, sir. xxx Q A What happened after Manuel Abelardo prepared this letter in a Manila envelope? He got a small envelope and placed there the name of Mr. Carlos as the addressee, sir. xxx Q After preparing this letter on a Manila envelope and then getting another envelope and writing on it the address of herein plaintiff, what did the defendant Manuel Abelardo do, if any? A He instructed me to mail the letter which he prepared, sir. xxx Q And did you actually accede to the request of herein defendant Manuel Abelardo for you to mail that letter to Engr. Carlos? A I got the envelope but I did not mail it, sir. xxx Q A Q A May we know from you the reason why you did not mail said letter? Because Engr. Carlos might become frightened, sir. What did you do with that letter, although you did not mail it? I kept it, sir.

xxx Q A Q A And what did you do next after keeping the letter for several days? I gave the letter personally to Engr. Carlos, sir. What prompted you to give that letter to Engr. Carlos instead of mailing it? So that Engr. Carlos can prepare, sir. x x x20

This incident was duly entered and recorded in the Police Blotter on October 7, 1991 by a certain Sgt. Casile of the Valenzuela Police Station.21 A photocopy of this written threat was also attached to the Police Report and presented in evidence.22 Another witness, Irineo Pajarin, recounted an incident which occurred in the afternoon of May 25, 1994, to wit: xxx Q Now Mr. Witness, on May 25, 1994 at around 2:30 in the afternoon do you recall where you were on that particular date and time? A Q A I was at B.F. Homes, Paranaque, sir. What were you doing at that time? I was waiting for Sargie Cornista, sir. xxx Q Will you please narrate to this Honorable Court that unusual incident?

A Manuel Abelardo passed by and when he saw me he called me. I approached him while he was then on board his car and asked me who was my companion, sir. Q A Q A Q A And what was your answer to him? I told him it was Sargie, sir. And what was his reply if any? He again asked me if I have in my company one of his children, sir. What was your reply? I answered none, sir.

Q Incidentally Mr. Witness, where or in what particular place did this conversation between you and Manuel T. Abelardo take place?

A Q

Parking Area of Academy I, Gov. Santos corner Aguirre St., sir. Now, what else happened after you talk[ed] with this Manuel T. Abelardo?

A He said I may be fooling him because he said I once fooled him when I ran away with his children which he is going to take back, sir. Q And what was your reply to that?

A I answered I did not do that and he said that once he discovered that I did it he would box me, sir. Q A Q A Q A Q A Q A Q A What else if any did he tell you at that time? He asked me who instructed me, sir. Instructed you about what? To run away with the children, sir. And what was your reply? None, he was the one who said "was it your Ate Puppet?" But I did not answer, sir. What happened next when you failed to answer? "Or my father in law?" And when he said his father in law to whom was he referring at that time? Mr. Honorio Carlos, sir. After mentioning the name of his father-in-law Mr. Honorio Carlos what happened next? He told me "Sabihin mo sa biyenan ko babarilin ko siya pag nakita ko siya."

Q Where was Manuel Abelardo at that particular time when he told this threatening remark against Honorio Carlos? A He was inside his car in Aguirre St., sir.

Q How about you where were you approximately at that particular time when he narrated that message to you threatening the herein plaintiff? A I was outside looking in his vehicle at Aguirre St., sir. xxx Q A And what was your reply or reaction when he made this threatening remarks? None, because he left. I was left behind, sir.23

This testimony was in part corroborated by an entry dated May 28, 1994 in the Police Blotter of the Paranaque Police Station narrating the aforementioned incident.24 The testimonies of these witnesses on the two separate incidents of threat are positive, direct and straightforward. Petitioner also declared on the witness stand that on several occasions, he received telephone calls from respondent cursing and threatening him.25These incidents of threat were also evidenced by a letter written by respondents wife and addressed to her father-in-law (father of respondent).26The letter recounted the instances when threats were made by her husband against petitioner, particularly, the incident reported by Pajarin and the threats made by respondent through the telephone.27 All these circumstances sufficiently establish that threats were directed by respondent against petitioner justifying the award of moral damages in favor of petitioner. However, the Court finds the amount of P500,000.00 as moral damages too exorbitant under the circumstances and the same is reduced to P50,000.00. The exemplary damages and attorneys fees are likewise reduced to P20,000.00 and P50,000.00, respectively. WHEREFORE, the petition is hereby GRANTED and the decision of the Court of Appeals in CA GR-CV No. 54464 is MODIFIED in that respondent is ordered to pay petitioner the amounts of (1) US$25,000 or its equivalent in Philippine currency at the time of payment, plus legal interest from August 4, 1994, until fully paid; (2) P50,000.00 as moral damages; (3) P20,000.00 as exemplary damages; and (4) P50,000.00 as attorneys fees.1wphi1.nt SO ORDERED. Davide, Jr., Puno, and Ynares-Santiago, JJ., concur.

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION 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 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 Nicols 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 (P30,000.00) pesos as moral damages, five thousand (P5,000.00) pesos as attorneys fees and litigation expenses, another five thousand (P5,000.00) 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 (P40,000.00), Philippine Currency, representing the moral damages, attorneys 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 Nicols 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 sheriffs 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 sheriffs 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 P500,000.00 was only sold at a "very low price" of P51,685.00, whereas the judgment obligation of Erlinda Nicol was only P40,000.00. 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 sheriffs sale. In an Order5 dated 18 April 1994, the RTC dismissed respondents 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 coordinate 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 orquasi-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 toBranch 21 for further proceedings. WHEREFORE, the petition is DISMISSED. The Decision of the Court of Appeals is AFFIRMED. Costs against petitioners. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 160762 May 3, 2006

Spouses JOSEPHINE MENDOZA GO & HENRY GO, Petitioners, vs. LEONARDO YAMANE, Respondent. DECISION PANGANIBAN, CJ: Property purchased by spouses during the existence of their marriage is presumed to be conjugal in nature. This presumption stands, absent any clear, categorical, and convincing evidence that the property is paraphernal. 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. The Case Before the Court is a Petition for Review1 under Rule 45 of the Rules of Court, challenging the November 22, 2002 Decision2 and the September 17, 2003 Resolution3 of the Court of Appeals (CA) in CA-GR CV No. 60939. The assailed Decision disposed as follows: "WHEREFORE, premises considered, the Decision appealed from is hereby REVERSED and SET ASIDE. The Sheriff's Certificate of Sale dated August 12, 1981 and the Final Sheriff's Certificate of Sale dated August 26, 1982 are declared NULL and VOID."4 The CA denied reconsideration in its September 17, 2003 Resolution. The Facts The undisputed factual findings of the CA are as follows: "Involved in the suit is a 750 square meters (sic) parcel of lot located at Res. Sec. 'K', Baguio City, registered in the name of Muriel Pucay Yamane, wife of Leonardo Yamane, [respondent] herein, under Transfer Certificate of Title No. 12491. "As a result of a motion for execution of a charging lien filed by Atty. Guillermo F. De Guzman in Civil Case No. 1841, entitled 'Florence Pucay De Gomez, Elsie Pucay Kiwas and Muriel Pucay Yamane v. Cypress Corporation,' which said counsel handled for the plaintiffs therein, hereinafter collectively referred to as the Pucay sisters, the subject property was levied to satisfy the lien for attorney's fees in the amount of P10,000. The said property was scheduled to be sold at public auction on August 11, 1981. "Four days prior to the auction sale, [respondent] filed a Third-Party Claim with the Office of the Provincial Sheriff to stop the public auction on the ground that the subject property is conjugal property and, therefore, should not be held answerable for the personal obligation of the Pucay sisters. However, the Sheriff proceeded with the auction sale despite [respondent's] protest. The subject property was sold to spouses Josephine [and] Henry Go (or [petitioners]) as highest bidder. No redemption having been made during the one-year period, a Final Sheriff's Certificate of Sale was eventually issued on August 26, 1982 conveying and transferring the said property to [petitioners]. "On September 4, 1984, [respondent] filed a Complaint with the Regional Trial Court of Baguio City, docketed as Civil Case No. 417-R, against [petitioners] and Sheriff Melgar for annulment and cancellation of auction sale upon the same ground stated in the abovementioned third-party claim. Citing the Order of the Regional Trial Court of Baguio City, Branch V in LRC Case No. 2288, which ordered the cancellation of TCT No. 12491 and directed the Register of Deeds to issue new title in the name of Josephine Go x x

x, [petitioners] moved to dismiss the complaint on the ground of res judicata. In the Order dated November 28, 1984, the motion was denied by the trial court. "In their Answer filed on December 10, 1984, [petitioners] denied the material allegations of the complaint and interposed the following special affirmative defenses: that the cause of action was barred by prior judgment; that [respondent] has not pursued any lawful remedy to annul the execution proceeding; that there is no flaw or irregularity in the auction sale; and that since the execution sale was made in accordance with Section 21, Rule 39 of the Revised Rules of Court, it is deemed final and any irregularity committed in the course thereof will not vitiate its validity. "On December 28, 1984, Muriel likewise lodged a Complaint for Damages, docketed as Civil Case No. 505-R, against [petitioners] and Atty. Guillermo De Guzman alleging, in gist, fraud, misrepresentation, manipulation and unlawful acts of the defendants in causing the levy of the subject property with an estimated commercial value ofP200,000 as against a charging lien in the amount of P10,000. "In its May 27, 1985 Order, the trial court ordered the joint hearing of Civil Cases Nos. 417-R and 505-R. On August 30, 1985, Muriel was declared non-suited for failure to appear in the hearing despite due notice. As a consequence, Civil Case No. 505-R was dismissed on October 15, 1985."5 In its Decision6 dated March 25, 1998, the Regional Trial Court (RTC) of Baguio City, Branch 4, held that the subject parcel of land was the paraphernal property of the late Muriel Pucay Yamane -- spouse of respondent -- and was not their conjugal property. The appearance of his name on the Transfer Certificate of Title (TCT) was deemed to be merely descriptive of the civil status of the registered owner, his late wife. Hence, finding that he had no legal standing to question the auction sale or to pray for its annulment or cancellation, the RTC dismissed the case for lack of merit. Upon receipt of the RTC Decision on April 8, 1998, respondent filed a Motion,7 in which he prayed that he be allowed to file his Motion for Reconsideration of the Decision, on or before May 30, 1998. The trial court granted8his Motion; received the Motion for Reconsideration,9 which was filed on May 28, 1998; and eventually denied it in its Order dated June 5, 1998.10 He then elevated the matter to the CA on June 15, 1998. Ruling of the Court of Appeals The CA reversed the RTC's Decision. The Sheriff's Certificate of Sale dated August 12, 1981, and the Final Sheriff's Certificate of Sale dated August 26, 1982, were declared null and void. According to the appellate court, property acquired during marriage is presumed to be conjugal, unless the exclusive funds of one spouse are shown to have been used for the purpose. That the land was acquired during the spouses' coverture was sufficiently established by the TCT and the Deed of Absolute Sale, both indicating that Muriel Pucay Yamane was "married to Leonardo Yamane"; and by the undisputed testimony of the previous owner, Eugene Pucay. Because of petitioners' failure to establish that the land in question had been acquired by Muriel using her exclusive funds, the CA concluded that the contested land was conjugal property. The appellate court further held thus: "x x x [T]he disputed property being a conjugal property of [respondent] and his wife, and absent any showing of some advantage or benefit that accrued to their conjugal partnership from the transaction between the Pucay sisters and Atty. De Guzman, the public auction sale of the subject property in favor of [petitioners] is null and void."11 Hence, this Petition.12

Issues Petitioners submit the following issues for our consideration: "I. The Court of Appeals gravely erred in taking cognizance of the appeal and in not dismissing the same, despite the fact that the respondent failed to perfect his appeal within the 15-day reglementary period set by the Rules of Court. "II. The Court of Appeals gravely erred in declaring the subject property as conjugal property, despite the existence of clear evidence showing that the subject property is the exclusive paraphernal property of Muriel who, even during her lifetime, always claimed the said property as her own exclusive paraphernal property and not as property co-owned with her husband, the respondent herein.1avvphil.net "III. The Court of Appeals, assuming, ex grati argumenti, that the subject property is conjugal property between respondent and Muriel, gravely erred in ruling that the same cannot answer for the charging lien of Atty. Guillermo de Guzman in Civil Case No. 1841."13 In the main, they posit two issues. They raise, first, the procedural question of whether the CA erred in giving due course to respondent's lapsed appeal; and, second, the substantive issue of whether the subject property is conjugal or paraphernal. The Court's Ruling The Petition has no merit. Procedural Issue: Whether Respondent's Appeal Should Be Given Due Course Petitioners contend that the CA erred in giving due course to the appeal filed by respondent beyond the 15-day reglementary period. Concededly, he received a copy of the RTC Decision on April 8, 1998. He had, therefore, until April 23, 1998, within which to file an appeal. Prior to the latter date, however, he moved that his new counsel be allowed to file a motion for reconsideration on May 30, 1998. It was eventually filed on May 28, 1998, but was denied. Respondent subsequently filed a Notice of Appeal on June 15, 1998. By this time, the original period to appeal had expired. It should be clear that the Rules prohibit an extension to file a motion for reconsideration.14 The perfection of an appeal in the manner and within the period prescribed by the Rules of Civil Procedure is not only mandatory, but also jurisdictional; and the lapse of the appeal period of fifteen days deprives a court of the jurisdiction to alter a final judgment.15 There have been exceptions, however, in which the Court dispensed with technical infirmities and gave due course to tardy appeals. In some of those instances, the presence of any justifying circumstance recognized by law -- such as fraud, accident, mistake or excusable negligence -- properly vested the judge with discretion to approve or admit an appeal filed out of time.16 In other instances, lapsed appeals were allowed in order to serve substantial justice, upon consideration of a) matters of life, liberty, honor or property; b) the existence of special or compelling circumstances; c) the merits of the case; d) causes not entirely attributable to the fault or negligence of the party that would be favored by the suspension of the rules; e) the failure to show that the review being sought was merely frivolous and dilatory; and f) the fact that the other party would not be unjustly prejudiced.17

Indeed, in some exceptional cases, the Court has allowed the relaxation of the rules regulating the reglementary periods of appeal. These exceptions were cited in Manila Memorial Park Cemetery v. CA,18 from which we quote: "In Ramos vs. Bagasao, the Court excused the delay of four days in the filing of the notice of appeal because the questioned decision of the trial court had been served upon appellant Ramos at a time when her counsel of record was already dead. The new counsel could only file the appeal four days after the prescribed reglementary period was over. In Republic vs. Court of Appeals, the Court allowed the perfection of an appeal by the Republic despite the delay of six days to prevent a gross miscarriage of justice since the Republic stood to lose hundreds of hectares of land already titled in its name and had since then been devoted for public purposes. In Olacao vs. National Labor Relations Commission, a tardy appeal was accepted considering that the subject matter in issue had theretofore been judicially settled with finality in another case, and a dismissal of the appeal would have had the effect of the appellant being ordered twice to make the same reparation to the appellee."19 We believe that a suspension of the Rules is similarly warranted in the present controversy. We have carefully studied the merits of the case and noted that the review being sought has not been shown to be merely frivolous and dilatory. The Court has come to the conclusion that the Decision of the RTC, Branch 4 (in Civil Case No. 417-R), must be set aside. It would be far better and more prudent to attain the ends of justice, rather than to dispose of the case on technicality and cause grave injustice in the process. Thus, we would rather excuse a technical lapse and afford respondent a review of the case on appeal. Substantive Issue: Paraphernal or Conjugal? The purchase of the property had been concluded in 1967, before the Family Code took effect on August 3, 1988.20 Accordingly, the transaction was aptly covered by the then governing provisions of the New Civil Code. On the latter basis, therefore, we shall resolve the issue of the nature of the contested property. Article 160 of the New Civil Code provides that "all property of the marriage is presumed to belong to the conjugal partnership, unless it be proved that it pertains exclusively to the husband or to the wife."21 As a conditio sine qua non for the operation of this article in favor of the conjugal partnership,22 the party who invokes the presumption must first prove that the property was acquired during the marriage.23 In other words, the presumption in favor of conjugality does not operate if there is no showing of when the property alleged to be conjugal was acquired.24 Moreover, the presumption may be rebutted only with strong, clear, categorical and convincing evidence.25 There must be strict proof of the exclusive ownership of one of the spouses,26 and the burden of proof rests upon the party asserting it.27 The CA committed no error in declaring that the parcel of land belonged to the conjugal partnership of Spouses Muriel and Leonardo Yamane. They acquired it from Eugene Pucay on February 27, 1967,28 or specifically during the marriage.29 We then follow the rule that proof of the acquisition of the subject property during a marriage suffices to render the statutory presumption operative. It is clear enough that the presently disputed piece of land pertains to the conjugal partnership. Petitioners concede that the property was acquired during the subsistence of the marriage of Muriel to respondent.30 Nonetheless, they insist that it belonged exclusively to her for the following reasons: First. Respondent never denied nor opposed her claim in Civil Case No. 505-R, which she had filed during her lifetime; or in AG-GR Sp. No. 01616 (entitled "Muriel Pucay Yamane v. Josephine Go"), that the disputed parcel of land was her exclusive paraphernal property. They allege that his

failure to file a denial or opposition in those cases is tantamount to a judicial admission that militates against his belated claim. Second. The Deed of Absolute Sale of the property is in the sole name of Muriel. Petitioners posit that, had the spouses jointly purchased this piece of land, the document should have indicated this fact or carried the name of respondent as buyer. Third. The failure of respondent to redeem the parcel of land within the redemption period after the auction sale indicated that he was not its co-owner. We will discuss the three arguments seriatim. Unilateral Declaration Respondent's interest cannot be prejudiced by the claim of Muriel in her Complaint in Civil Case No. 505R that the subject parcel of land was her paraphernal property. Significantly, the nature of a property -whether conjugal or paraphernal -- is determined by law and not by the will of one of the spouses.31 Thus, no unilateral declaration by one spouse can change the character of a conjugal property.32 Besides, the issue presented in Civil Case No. 505-R was not the nature of the subject piece of land being levied upon, but whether Atty. Guillermo de Guzman was entitled to a charging lien. In that case, Muriel claimed that she had not officially retained him as counsel, and that no lawyer-client relationship had been established between them.33 Deed and Title in the Name of One Spouse Further, the mere registration of a property in the name of one spouse does not destroy its conjugal nature.34Hence, it cannot be contended in the present case that, simply because the title and the Deed of Sale covering the parcel of land were in the name of Muriel alone, it was therefore her personal and exclusive property. In concluding that it was paraphernal, the trial court's reliance on Stuart v. Yatco35 was clearly erroneous. As stated earlier, to rebut the presumption of the conjugal nature of the property, petitioners must present clear and convincing evidence. We affirm and quote below, for easy reference, the relevant dispositions of the CA: "x x x. We are unable to go along with [petitioners'] contention that the subject property was acquired by Muriel with her exclusive funds. Mere registration of the contested property in the name of the wife is not sufficient to establish the paraphernal nature of the property. This reminds Us of the teaching in the recent case of Diancin v. Court of Appeals, that all the property acquired by the spouses, regardless of in whose name the same is registered, during the marriage is presumed to belong to the conjugal partnership of gains, unless it is proved that it pertains exclusively to the husband or to the wife. To quote: "As a general rule, all property acquired by the spouses, regardless of in whose name the same is registered, during the marriage is presumed to belong to the conjugal partnership of gains, unless it is proved that it pertains exclusively to the husband or to the wife. In the case at bar, the fishpond lease right is not paraphernal having been acquired during the coverture of the marriage between Matilde and Tiburcio, which was on April 9, 1940. The fact that the grant was solely in the name of Matilde did not make the property paraphernal property. What was material was the time the fishpond lease right was acquired by the grantee, and that was during the lawful existence of Matilde's marriage to Tiburcio.

"x x x [T]his presumption is rebuttable, but only with strong, clear and convincing evidence. The burden of proving that the property belongs exclusively to the wife rests upon the party asserting it. Mere assertion of the property's paraphernal nature is not sufficient." "The record as well as the foregoing established jurisprudence lead us to conclude that the contested property was indeed acquired during the marriage of herein [respondent] and Muriel. To prove that it is nonetheless paraphernal property, it is incumbent upon [petitioners] to adduce strong, clear and convincing evidence that Muriel bought the same with her exclusive funds. [Petitioners] failed to discharge the burden. Nowhere in the evidence presented by them do We find any indication that the land in question was acquired by Muriel with her exclusive funds. The presumption not having been overthrown, the conclusion is that the contested land is conjugal property."36 Non-Redemption After the Auction Sale The non-redemption of the property by respondent within the period prescribed by law did not, in any way, indicate the absence of his right or title to it. Contrary to petitioners' allegation, the fact is that he filed a Third-Party Claim37 with the sheriff, upon learning of the levy and impending auction sale. This fact was specifically admitted by petitioners.38 Respondent claimed that the parcel of land was conjugal, and that he could not answer for the separate obligation of his wife and her sisters.39 Notwithstanding his claim, the disputed piece of land was sold at a public auction on August 11, 1981. Consequently issued were a Sheriff's Certificate of Sale dated August 12, 1981, and a Final Sheriff's Certificate of Sale dated August 26, 1982.40 Likewise, in his Opposition (Answer) to the Petition in LRC File Adm. Case No. 2288,41 respondent raised the issue of the conjugal nature of the property and reserved his right to file an independent action to annul the auction sale. In its March 30, 1983 Order,42 however, Branch 5 of the RTC of Baguio City did not rule on either the actual ownership or the nature of the parcel of land. Rather, it granted the Petition to issue a new certificate of title in favor of Petitioner Josephine Mendoza Go. It found that, under Section 75 of Presidential Decree 1529, respondent had no legal standing to question the auction sale, because he was not the registered owner of the property. Instead, his right to prove his claim in a separate and independent action was upheld.43 Thus, he instituted the present case for annulment and cancellation of the auction sale. The foregoing points clearly explain the failure of respondent to redeem the property. Misplaced is petitioners' emphasis on his failure to do so within the period required by law, because redemption in this case would have been inconsistent with his claim that the sale was invalid.44 Redemption would have served as an implied admission of the regularity of the sale and estopped him from later impugning its validity on that ground.45 Since petitioners have failed to present convincing evidence that the property is paraphernal, the presumption that it is conjugal therefore stands. The next question before us is, whether the charging lien of Atty. de Guzman may be properly enforced against the piece of land in question. Charging Lien Not Chargeable Against Conjugal Property It is indisputable that the services of Atty. de Guzman were acquired during the marriage of respondent and Muriel. The lawyer's legal services were engaged to recover from Cypress Corporation (in Civil Case No. 1841) the balance of the purchase price of the sale of the exclusive property of Muriel and her sisters.46 The recovery was done during the marriage.47 The CA elucidated on this matter as follows: "x x x. The contract or transaction between Atty. De Guzman and the Pucay sisters appears to have been incurred for the exclusive interest of the latter. Muriel was acting privately for her exclusive interest when

she joined her two sisters in hiring the services of Atty. De Guzman to handle a case for them. Accordingly, whatever expenses were incurred by Muriel in the litigation for her and her sisters' private and exclusive interests, are her exclusive responsibility and certainly cannot be charged against the contested conjugal property. "Even on the remote assumption that the conjugal property could be held liable, levy on execution of the same property should still be denied in accordance with the ruling in Luzon Surety Co., Inc. v. De Garcia that before a conjugal property could be held liable for the obligation contracted by a spouse, there must be a showing of some advantage or benefit that accrued to the conjugal partnership. Concededly, the burden is on the [petitioners] to prove that the services rendered by Atty. De Guzman in handling Civil Case No. 1841 for the Pucay sisters had, somehow, redounded to the benefit of the conjugal partnership of herein [respondent] and Muriel. This onus, [petitioners], however, failed to discharge."48 We find no reason to deviate from the CA's findings, which are amply supported by evidence. The expenses incurred by Muriel for the recovery of the balance of the purchase price of her paraphernal property are her exclusive responsibility.49 This piece of land may not be used to pay for her indebtedness, because her obligation has not been shown to be one of the charges against the conjugal partnership.50 Moreover, her rights to the property are merely inchoate prior to the liquidation of the conjugal partnership. Under the New Civil Code, 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;51 when administration of the conjugal partnership is transferred to the wife by the courts52 or by the husband;53 or when the wife gives moderate donations for charity.54 Failure to establish any of these circumstances in the present case means that the conjugal asset may not be bound to answer for Muriel's personal obligation. The power of the court in executing judgments extends only to properties unquestionably belonging to the judgment debtor alone.55 In this case, therefore, the property -- being conjugal in nature -- cannot be levied upon.56 WHEREFORE, the Petition is DENIED, and the assailed Decision and Resolution AFFIRMED. Costs against petitioners. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila

FIRST DIVISION

G.R. No. 106169 February 14, 1994 SAMSON T. SABALONES, petitioner, vs. THE COURT OF APPEALS and REMEDIOS GAVIOLA-SABALONES, respondents. Leven S. Puno for petitioner. Benigno M. Puno for private respondent.

CRUZ, J.: The subject of this petition is the preliminary injunction issued by the respondent court pending resolution of a case on appeal. We deal only with this matter and not the merits of the case. As a member of our diplomatic service assigned to different countries during his successive tours of duties, petitioner Samson T. Sabalones left to his wife, herein respondent Remedios Gaviola-Sabalones, the administration of some of their conjugal, properties for fifteen years. Sabalones retired as ambassador in 1985 and came back to the Philippines but not to his wife and their children. Four years later, he filed an action for judicial authorization to sell a building and lot located at #17 Eisenhower St., Greenhills, San Juan, Metro Manila, belonging to the conjugal partnership. He claimed that he was sixty-eight years old, very sick and living alone without any income, and that his share of the proceeds of the sale to defray the prohibitive cost of his hospitalization and medical treatment. In her answer, the private respondent opposed the authorization and filed a counterclaim for legal separation. She alleged that the house in Greenhills was being occupied by her and their six children and that they were depending for their support on the rentals from another conjugal property, a building and lot in Forbes Park which was on lease to Nobumichi Izumi. She also informed the court that despite her husband's retirement, he had not returned to his legitimate family and was instead maintaining a separate residence in Don Antonio Heights, Fairview, Quezon City, with Thelma Cumareng and their three children. In her prayer, she asked the court to grant the decree of legal separation and order the liquidation of their conjugal properties, with forfeiture of her husband's share therein because of his adultery. She also prayed that it enjoin the petitioner and his agents from a) disturbing the occupants of the Forbes Park property and b) disposing of or encumbering any of the conjugal properties. After trial, Judge Mariano M. Umali, found that the petitioner had indeed contracted a bigamous marriage on October 5, 1981, with Thelma Cumareng, to whom he had returned upon his retirement in 1985 at a separate residence. The court thus decreed the legal separation of the spouses and the forfeiture of the petitioner's share in the conjugal properties, declaring as well that he was not entitled to support from his respondent wife. 1 This decision was appealed to the respondent court. Pendente lite, the respondent wife filed a motion for the issuance of a writ of preliminary injunction to enjoin the petitioner from interfering with the

administration of their properties in Greenhills and Forbes Park. She alleged inter alia that he had harassed the tenant of the Forbes Park property by informing him that his lease would not be renewed. She also complained that the petitioner had disposed of one of their valuable conjugal properties in the United States in favor of his paramour, to the prejudice of his legitimate wife and children. The petitioner opposed this motion and filed his own motion to prevent his wife from entering into a new contract of lease over the Forbes Park property with its present tenant, or with future tenants, without his consent. After hearing, the Court of Appeals, in an order dated April 7, 1992, granted the preliminary injunction prayed for by his wife. 2 The petitioner now assails this order, arguing that since the law provides for a joint administration of the conjugal properties by the husband and wife, no injunctive relief can be issued against one or the other because no right will be violated. In support of this contention, he cites Art. 124 of the Family Code, reading as follows: Art. 124. The administration and enjoyment of the conjugal partnership property shall belong to both spouses jointly. In case of disagreement, the husband's decision shall prevail, subject to recourse to the court by the wife for proper remedy, which must be availed of within five years from the date of 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 the 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 and the third person, and may be perfected as a binding contract upon the acceptance by the other spouse or the authorization by the court before the offer is withdrawn by either or both offerors. He further notes that the respondent court failed to appoint an administrator of the conjugal assets as mandated by Art. 61 of the Code, thus: Art. 61 After the filing of the petition for legal separation, the spouses shall be entitled to live separately from each other. The court, in the absence of a written agreement between the spouses, shall designate either of them or a third person to administer the absolute community or conjugal partnership property. The administrator appointed by the court shall have the same powers and duties as those of a guardian under the Rules of Court. The Court has carefully considered the issues and the arguments of the parties and finds that the petition has no merit. We agree with the respondent court that pending the appointment of an administrator over the whole mass of conjugal assets, the respondent court was justified in allowing the wife to continue with her administration. It was also correct, taking into account the evidence adduced at the hearing, in enjoining the petitioner from interfering with his wife's administration pending resolution of the appeal. The law does indeed grant to the spouses joint administration over the conjugal properties as clearly provided in the above-cited Article 124 of the Family Code. However, Article 61, also above quoted, states that after a petition for legal separation has been filed, the trial court shall, in the absence of a

written agreement between the couple, appoint either one of the spouses or a third person to act as the administrator. While it is true that no formal designation of the administrator has been made, such designation was implicit in the decision of the trial court denying the petitioner any share in the conjugal properties (and thus also disqualifying him as administrator thereof). That designation was in effect approved by the Court of Appeals when it issued in favor of the respondent wife the preliminary injunction now under challenge. The primary purpose of the provisional remedy of injunction is to preserve the status quo of the things subject of the action or the relations between the parties and thus protect the rights of the plaintiff respecting these matters during the pendency of the suit. Otherwise, the defendant may, before final judgment, do or continue doing the act which the plaintiff asks the court to restrain and thus make ineffectual the final judgment that may be rendered afterwards in favor of the plaintiff. 3 As observed by Francisco, "Injunction is primarily a preventive remedy. Its province is to afford relief against future acts which are against equity and good conscience and to keep and preserve the thing in the status quo, rather than to remedy what is past or to punish for wrongful acts already committed. It may issue to prevent future wrongs although no right has yet been violated." 4 The Court notes that the wife has been administering the subject properties for almost nineteen years now, apparently without complaint on the part of the petitioner. He has not alleged, much less shown, that her administration has caused prejudice to the conjugal partnership. What he merely suggests is that the lease of the Forbes Park property could be renewed on better terms, or he should at least be given his share of the rentals. In her motion for the issuance of a preliminary injunction, the respondent wife alleged that the petitioner's harassment of their tenant at Forbes Park would jeopardize the lease and deprive her and her children of the income therefrom on which they depend for their subsistence. She also testified the numerous . . . including various dollar accounts, two houses in Quezon City and Cebu City, and a Mercedes Benz. The private respondent also complained that on June 10, 1991, the petitioner executed a quitclaim over their conjugal property in Apple Valley, San Bernardino, California, U.S.A., in favor of Thelma Cumareng, to improve his paramour's luxurious lifestyle to the prejudice of his legitimate family. These allegations, none of which was refuted by the husband, show that the injunction is necessary to protect the interests of the private respondent and her children and prevent the dissipation of the conjugal assets. The twin requirements of a valid injunction are the existence of a right and its actual or threatened violation. 5Regardless of the outcome of the appeal, it cannot be denied that as the petitioner's legitimate wife (and the complainant and injured spouse in the action for legal separation), the private respondent has a right to a share (if not the whole) of the conjugal estate. There is also, in our view, enough evidence to raise the apprehension that entrusting said estate to the petitioner may result in its improvident disposition to the detriment of his wife and children. We agree that inasmuch as the trial court had earlier declared the forfeiture of the petitioner's share in the conjugal properties, it would be prudent not to allow him in the meantime to participate in its management. Let it be stressed that the injunction has not permanently installed the respondent wife as the administrator of the whole mass of conjugal assets. It has merely allowed her to continue administering the properties in the meantime without interference from the petitioner, pending the express designation of the administrator in accordance with Article 61 of the Family Code. WHEREFORE, the petition is DENIED for lack of merit. It is so ordered.

Davide, Jr., Bellosillo, Quiason and Kapunan, JJ, concur.

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION

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 CAGR 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 partieslitigants 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: 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 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. Davide, Jr., Bellosillo, Vitug and Quisumbing, JJ., concur.

FIRST DIVISION

[G.R. No. 147978. January 23, 2002]

THELMA A. JADER-MANALO, petitioner, vs. NORMA FERNANDEZ C. CAMAISA and EDILBERTO CAMAISA, respondents.

DECISION KAPUNAN, J.: The issue raised in this case is whether or not the husband may validly dispose of a conjugal property without the wifes written consent. The present controversy had its beginning when petitioner Thelma A. Jader-Manalo allegedly came across an advertisement placed by respondents, the Spouses Norma Fernandez C.Camaisa and Edilberto Camaisa, in the Classified Ads Section of the newspaper BULLETIN TODAY in its April, 1992 issue, for the sale of their ten-door apartment in Makati, as well as that inTaytay, 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 property[4] to be paid on installment basis with downpayments of P100,000.00 and P200,000.00, respectively, on April 15, 1992. The balance thereof was to be paid as follows[5]: Taytay Property 6th month 12th month 18th month P200,000.00 700,000.00 500,000.00 Makati Property P300,000.00 1,600,000.00

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 wifes 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 latters 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 forP200,000.00 and UCPB Check No. 62808 also dated April 15, 1992 for P100,000.00 in the presence of the real estate broker and an employee in Edilbertos office.[9] The contracts were given to Edilberto for the formal affixing of his wifes 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.[11] During the meeting, handwritten notations were made on the contracts to sell, so they arranged to incorporate the notations and to meet again for the formal signing of the contracts.[12] When petitioner met again with respondent spouses and the real estate broker at Edilbertos office for the formal affixing of Normas signature, she was surprised when respondent spouses informed her that they were backing out of the agreement because they needed spot cash for the full amount of the consideration.[13] Petitioner reminded respondent spouses that the contracts to sell had already been duly perfected and Normas refusal to sign the same would unduly prejudice petitioner. Still, Norma refused to sign the contracts prompting petitioner to file a complaint for specific performance and damages against respondent spouses before the Regional Trial Court of Makati, Branch 136 on April 29, 1992, to compel respondent Norma Camaisa to sign the contracts to sell.

A Motion to Dismiss[14] 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.[16] Thereafter, 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 Judgment[21] asserting that there is no genuine issue as to any material fact on the basis of the pleadings and admission of the parties considering that the wifes written consent was not obtained in the contract to sell, the subject conjugal properties belonging to respondents; hence, the contract was null and void. On April 14, 1993, the trial court rendered a summary judgment dismissing the complaint on the ground that under Art. 124 of the Family Code, the court cannot intervene to authorize the transaction in the absence of the consent of the wife since said wife who refused to give consent had not been shown to be incapacitated. The dispositive portion of the trial courts decision reads: WHEREFORE, considering these premises, judgment is hereby rendered: 1. Dismissing the complaint and ordering the cancellation of the Notice of Lis Pendens by reason of its filing on TCT Nos. (464860) 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 Attorneys Fees. Costs against plaintiff.[22] Petitioner, thus, elevated the case to the Court of Appeals. On November 29, 2000, the Court of Appeals affirmed the dismissal by the trial court but deleted the award of P50,000.00 as damages and P50,000.00 as attorneys fees. The Court of Appeals explained that the properties subject of the contracts were conjugal properties and as such, the consent of both spouses is necessary to give effect to the sale. Since private respondent Norma Camaisa refused to sign the contracts, the sale was never perfected. In fact, the downpayment was returned by respondent spouses and was accepted by petitioner. The Court of Appeals also stressed that the authority of the court to allow sale or encumbrance of a conjugal property without the consent of the other spouse is applicable only in cases where the said spouse is incapacitated or otherwise unable to participate in the administration of the conjugal property. Hence, the present 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 husbands decision shall prevail, subject to recourse to the court by the wife for a proper remedy, which must be availed of within five years from the date of the contract implementing such decision. In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the conjugal properties, the other spouse may assume sole powers of administration. These powers do not include the powers of disposition or encumbrance which must have the authority of the court or the written consent of the other spouse. In the absence of such authority or consent the disposition or encumbrance shall be void.However, the transaction shall be construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as a binding contract upon the acceptance by the other spouse or authorization by the court before the offer is withdrawn by either or both offerors. (Underscoring ours.) The properties subject of the contracts in this case were conjugal; hence, for the contracts to sell to be effective, the consent of both husband and wife must concur. Respondent Norma Camaisa admittedly did not give her written consent to the sale. Even granting that respondent Norma actively participated in negotiating for the sale of the subject properties, which she

denied, her written consent to the sale is required by law for its validity. Significantly, petitioner herself admits that Norma refused to sign the contracts to sell. Respondent Norma may have been aware of the negotiations for the sale of their conjugal properties. However, being merely aware of a transaction is not consent.[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 wifes 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. Davide, Jr., C.J., (Chairman), Puno, Pardo, and Ynares-Santiago, JJ., concur.

Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 185063 July 23, 2009

SPS. LITA DE LEON and FELIX RIO TARROSA, Petitioners, vs. ANITA B. DE LEON, DANILO B. DE LEON, and VILMA B. DE LEON, Respondents. DECISION VELASCO, JR., J.: The Case Before us is a Petition for Review on Certiorari under Rule 45 assailing and seeking to set aside the Decision1 and Resolution2 dated August 27, 2008 and October 20, 2008, respectively, of the Court of Appeals (CA) in CA-G.R. CV No. 88571. The CA affirmed with modification the October 4, 2006 Decision3 in Civil Case No. Q04-51595 of the Regional Trial Court (RTC), Branch 22 in Quezon City. The Facts On July 20, 1965, Bonifacio O. De Leon, then single, and the Peoples Homesite and Housing Corporation (PHHC) entered into a Conditional Contract to Sell for the purchase on installment of a 191.30 square-meter lot situated in Fairview, Quezon City. Subsequently, on April 24, 1968, Bonifacio married Anita de Leon in a civil rite officiated by the Municipal Mayor of Zaragosa, Nueva Ecija. To this union were born Danilo and Vilma. Following the full payment of the cost price for the lot thus purchased, PHHC executed, on June 22, 1970, a Final Deed of Sale in favor of Bonifacio. Accordingly, Transfer Certificate of Title (TCT) No. 173677 was issued on February 24, 1972 in the name of Bonifacio, "single." Subsequently, Bonifacio, for PhP 19,000, sold the subject lot to her sister, Lita, and husband Felix Rio Tarrosa (Tarrosas), petitioners herein. The conveying Deed of Sale dated January 12, 1974 (Deed of Sale) did not bear the written consent and signature of Anita. Thereafter, or on May 23, 1977, Bonifacio and Anita renewed their vows in a church wedding at St. John the Baptist Parish in San Juan, Manila. On February 29, 1996, Bonifacio died. Three months later, the Tarrosas registered the Deed of Sale and had TCT No. 173677 canceled. They secured the issuance in their names of TCT No. N-173911 from the Quezon City Register of Deeds. Getting wind of the cancellation of their fathers title and the issuance of TCT No. N-173911, Danilo and Vilma filed on May 19, 2003 a Notice of Adverse Claim before the Register of Deeds of Quezon City to protect their rights over the subject property. Very much later, Anita, Danilo, and Vilma filed a reconveyance suit before the RTC in Quezon City. In their complaint, Anita and her children alleged, among other things, that fraud attended the execution of the Deed of Sale and that subsequent acts of Bonifacio would show that he was still the owner of the parcel of land. In support of their case, they presented, inter alia, the following documents: a. A Real Estate Mortgage execution by Bonifacio in favor of spouses Cesar Diankinay and Filomena Almero on July 22, 1977. b. A Civil Complaint filed by Bonifacio against spouses Cesar Diankinay and Filomena Almero on November 27, 1979 for nullification of the Real Estate Mortgage.

c. The Decision issued by the Court of First Instance of Rizal, Quezon City, promulgated on July 30, 1982, nullifying the Real Estate Mortgage.4 The Tarrosas, in their Answer with Compulsory Counterclaim, averred that the lot Bonifacio sold to them was his exclusive property inasmuch as he was still single when he acquired it from PHHC. As further alleged, they were not aware of the supposed marriage between Bonifacio and Anita at the time of the execution of the Deed of Sale. After several scheduled hearings, both parties, assisted by their respective counsels, submitted a Joint Stipulation of Facts with Motion, to wit: 1. The parties have agreed to admit the following facts: a. Bonifacio O. De Leon, while still single x x x, purchased from the [PHHC] through a Conditional Contract to Sell on July 20, 1965 a parcel of land with an area of 191.30 square meters situated in Fairview, Quezon City for P841.72; b. On April 24, 1968, Bonifacio O. De Leon married plaintiff Anita B. De Leon before the Municipal Mayor of Zaragosa, Nueva Ecija. Both parties stipulate that said marriage is valid and binding under the laws of the Philippines; c. On June 22, 1970, Bonifacio O. De Leon paid [PHHC] the total amount of P1,023.74 x x x. The right of ownership over the subject parcel of land was transferred to the late Bonifacio O. De Leon on June 22, 1970, upon the full payment of the total [price] of P1,023.74 and upon execution of the Final Deed of Sale; d. After full payment, Bonifacio O. De Leon was issued [TCT] No. 173677 on February 24, 1972; e. On January 12, 1974, Bonifacio O. De Leon executed a Deed of Sale in favor of defendantsspouses Felix Rio Tarrosa and Lita O. De Leon disposing the parcel of land under TCT No. 173677 for valuable consideration amount of P19,000.00 and subscribed before Atty. Salvador R. Aguinaldo who was commissioned to [notarize] documents on said date. The parties stipulate that the Deed of Sale is valid and genuine. However, plaintiff Anita De Leon was not a signatory to the Deed of Sale executed on January 12, 1974; f. That plaintiff Anita B. De Leon and the late Bonifacio O. De Leon were married in church rites on May 23, 1977 x x x; g. The late Bonifacio O. De Leon died on February 29, 1996 at the UST Hospital, Espaa, Manila; h. The said "Deed of Sale" executed on January 12, 1974 was registered on May 8, 1996 before the Office of the Register of Deeds of Quezon City and [TCT] No. N-173911 was issued to Lita O. De Leon and Felix Rio Tarrosa.5 The Ruling of the Trial Court On October 4, 2006, the RTC, on the finding that the lot in question was the conjugal property of Bonifacio and Anita, rendered judgment in favor of Anita and her children. The dispositive portion of the decision reads: WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiffs and against defendants in the following manner:

(1) Declaring the Deed of Sale dated January 12, 1974 executed by the late Bonifacio O. De Leon in favor of defendants-spouses Lita De Leon and Felix Rio Tarrosa void ab initio; (2) Directing the Register of Deed of Quezon City to cancel Transfer Certificate of Title No. N173911 in the name of "Lita O. De Leon, married to Felix Rio Tarrosa" and restore Transfer Certificate of Title No. 173667 in the name of "Bonifacio O. De Leon"; (3) Ordering the defendants-spouses to pay plaintiffs the following sums: (a) P25,000.00 as moral damages; (b) P20,000.00 as exemplary damages; (c) P50,000.00 as attorneys fees plus appearance fee of P2,500.00 per court appearance; (d) Costs of this suit. SO ORDERED. Aggrieved, the Tarrosas appealed to the CA. As they would submit, the RTC erred: (1) in finding for the plaintiffs-appellees by declaring that the land subject matter of the case is conjugal property; (2) in not declaring the land as the exclusive property of Bonifacio O. De Leon when sold to defendant-appellants; (3) in ruling that defendant-appellants did not adduce any proof that the property was acquired solely by the efforts of Bonifacio O. De Leon; (4) in declaring that one-half of the conjugal assets does not vest to Bonifacio O. De Leon because of the absence of liquidation; (5) in cancelling TCT No. N-173911 and restored TCT No. [173677] in the name of Bonifacio O. De Leon; (6) in awarding moral and exemplary damages and attorneys fees to the plaintiffs-appellees.6 The Ruling of the Appellate Court On August 27, 2008, the CA rendered a decision affirmatory of that of the RTC, save for the award of damages, attorneys fees, and costs of suit which the appellate court ordered deleted. The fallo of the CA decision reads: WHEREFORE, in view of the foregoing, the assailed decision dated October 4, 2006, of the Regional Trial Court, Branch 22, Quezon City in Civil Case No. Q-04-51595 is hereby AFFIRMED with MODIFICATION, in that the award of moral and exemplary damages as well as attorneys fees, appearance fee and costs of suit are hereby DELETED. SO ORDERED.

Just like the RTC, the CA held that the Tarrosas failed to overthrow the legal presumption that the parcel of land in dispute was conjugal. The appellate court held further that the cases they cited were inapplicable. As to the deletion of the grant of moral and exemplary damages, the CA, in gist, held that no evidence was adduced to justify the award. Based on the same reason, it also deleted the award of attorneys fees and costs of suit. The Tarrosas moved but was denied reconsideration by the CA in its equally assailed resolution of October 20, 2008. Hence, they filed this petition. The Issues I Whether the [CA] gravely erred in concluding that the land purchased on installment by Bonifacio O. De Leon before marriage although some installments were paid during the marriage is conjugal and not his exclusive property. II Whether the [CA] gravely erred in ruling that the Lorenzo, et al. vs. Nicolas, et al., and Alvarez vs. Espiritu cases do not apply in the case at bar because in the latter the land involved is not a friar land unlike in the former. III Whether the [CA] gravely erred in affirming the decision of the trial court a quo which ruled that petitioners did not adduce any proof that the land was acquired solely by the efforts of Bonifacio O. De Leon. IV Whether the court of appeals gravely erred in affirming the decision of the trial court which ruled that onehalf (1/2) of the conjugal assets do not vest to Bonifacio O. De Leon because of the absence of liquidation. Our Ruling The petition lacks merit. The Subject Property is the Conjugal Property of Bonifacio and Anita The first three issues thus raised can be summed up to the question of whether or not the subject property is conjugal. Petitioners assert that, since Bonifacio purchased the lot from PHHC on installment before he married Anita, the land was Bonifacios exclusive property and not conjugal, even though some installments were paid and the title was issued to Bonifacio during the marriage. In support of their position, petitioners cite Lorenzo v. Nicolas7 and Alvarez v. Espiritu.8

We disagree. Article 160 of the 1950 Civil Code, the governing provision in effect at the time Bonifacio and Anita contracted marriage, provides that all property of the marriage is presumed to belong to the conjugal partnership unless it is proved that it pertains exclusively to the husband or the wife. For the presumption to arise, it is not, as Tan v. Court of Appeals9 teaches, even necessary to prove that the property was acquired with funds of the partnership. Only proof of acquisition during the marriage is needed to raise the presumption that the property is conjugal. 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.10 In the case at bar, ownership over what was once a PHHC lot and covered by the PHHC-Bonifacio Conditional Contract to Sell was only transferred during the marriage of Bonifacio and Anita. It is well settled that a conditional sale is akin, if not equivalent, to a contract to sell. In both types of contract, the efficacy or obligatory force of the vendors obligation to transfer title is subordinated to the happening of a future and uncertain event, usually the full payment of the purchase price, so that if the suspensive condition does not take place, the parties would stand as if the conditional obligation had never existed.11 In other words, in a contract to sell ownership is retained by the seller and is not passed to the buyer until full payment of the price, unlike in a contract of sale where title passes upon delivery of the thing sold.12 Such is the situation obtaining in the instant case. The conditional contract to sell executed by and between Bonifacio and PHHC on July 20, 1965 provided that ownership over and title to the property will vest on Bonifacio only upon execution of the final deed of sale which, in turn, will be effected upon payment of the full purchase price, to wit: 14. Titles to the property subject of this contract remains with the CORPORATION and shall pass to, and be transferred in the name of the APPLICANT only upon the execution of the final Deed of Sale provided for in the next succeeding paragraph. 15. Upon the full payment by the APPLICANT of the price of the lot above referred to together with all the interest due thereon, taxes and other charges, and upon his faithful compliance with all the conditions of this contract the CORPORATION agrees to execute in favor of the APPLICANT a final deed of sale of the aforesaid land, and the APPLICANT agrees to accept said deed, as full performance by the CORPORATION of its covenants and undertakings hereunder.13 x x x Evidently, title to the property in question only passed to Bonifacio after he had fully paid the purchase price on June 22, 1970. This full payment, to stress, was made more than two (2) years after his marriage to Anita on April 24, 1968. In net effect, the property was acquired during the existence of the marriage; as such, ownership to the property is, by law, presumed to belong to the conjugal partnership. Such presumption is rebuttable only with strong, clear, categorical, and convincing evidence.14 There must be clear evidence of the exclusive ownership of one of the spouses,15 and the burden of proof rests upon the party asserting it.16 Petitioners argument that the disputed lot was Bonifacios exclusive property, since it was registered solely in his name, is untenable. The mere registration of a property in the name of one spouse does not destroy its conjugal nature.17 What is material is the time when the property was acquired. Thus, the question of whether petitioners were able to adduce proof to overthrow the presumption is a factual issue best addressed by the trial court. As a matter of long and sound practice, factual determinations of the trial courts,18 especially when confirmed by the appellate court, are accorded great weight by the Court and, as rule, will not be disturbed on appeal, except for the most compelling reasons.19 Petitioners have not, as they really cannot, rebut the presumptive conjugal nature of the lot in

question. In this regard, the Court notes and quotes with approval the following excerpts from the trial courts disposition: The defendants, however, did not adduce any proof that the property in question was acquired solely by the efforts of [Bonifacio]. The established jurisprudence on the matter leads this Court to the conclusion that the property involved in this dispute is indeed the conjugal property of the deceased [Bonifacio] De Leon. In fact, defendant even admitted that [Bonifacio] brought into his marriage with plaintiff Anita the said land, albeit in the concept of a possessor only as it was not yet registered in his name. The property was registered only in 1972 during the existence of the marriage. However, the absence of evidence on the source of funding has called for the application of the presumption under Article 160 in favor of the plaintiffs.20 The cases petitioners cited are without governing applicability to this case simply because they involved a law specifically enacted to govern the disposition of and ownership of friar lands. In Lorenzo, the Court held that the pervading legislative intent of Act No. 1120 is "to sell the friar lands acquired by the Government to actual settlers and occupants of the same."21 The Court went on further to say in Alvarez that "under the Friar Lands Act of 1120, the equitable and beneficial title to the land passes to the purchaser the moment the first installment is paid and a certificate of sale is issued."22 Plainly, the said cases are not applicable here considering that the disputed property is not friar land.1awph!1 There can be no quibbling that Anitas conformity to the sale of the disputed lot to petitioners was never obtained or at least not formally expressed in the conveying deed. The parties admitted as much in their Joint Stipulation of Facts with Motion earlier reproduced. Not lost on the Court of course is the fact that petitioners went to the process of registering the deed after Bonifacios death in 1996, some 22 years after its execution. In the interim, petitioners could have had workbut did nottowards securing Anitas marital consent to the sale. It cannot be over-emphasized that the 1950 Civil Code is very explicit on the consequence of the husband alienating or encumbering any real property of the conjugal partnership without the wifes consent.23 To a specific point, the sale of a conjugal piece of land by the husband, as administrator, must, as a rule, be with the wifes consent. Else, the sale is not valid. So it is that in several cases we ruled that the sale by the husband of property belonging to the conjugal partnership without the consent of the wife is void ab initio, absent any showing that the latter is incapacitated, under civil interdiction, or like causes. The nullity, as we have explained, proceeds from the fact that sale is in contravention of the mandatory requirements of Art. 166 of the Code.24 Since Art. 166 of the Code requires the consent of the wife before the husband may alienate or encumber any real property of the conjugal partnership, it follows that the acts or transactions executed against this mandatory provision are void except when the law itself authorized their validity.25 Accordingly, the Deed of Sale executed on January 12, 1974 between Bonifacio and the Tarrosas covering the PHHC lot is void. Interest in the Conjugal Partnership Is Merely Inchoate until Liquidation As a final consideration, the Court agrees with the CA that the sale of one-half of the conjugal property without liquidation of the partnership is void. Prior to the liquidation of the conjugal partnership, the interest of each spouse in the conjugal assets is inchoate, a mere expectancy, which constitutes neither a legal nor an equitable estate, and does not ripen into a title until it appears that there are assets in the community as a result of the liquidation and settlement.26 The interest of each spouse is limited to the net remainder or "remanente liquido" (haber ganancial) resulting from the liquidation of the affairs of the partnership after its dissolution.27 Thus, the right of the husband or wife to one-half of the conjugal assets

does not vest until the dissolution and liquidation of the conjugal partnership, or after dissolution of the marriage, when it is finally determined that, after settlement of conjugal obligations, there are net assets left which can be divided between the spouses or their respective heirs.28 Therefore, even on the supposition that Bonifacio only sold his portion of the conjugal partnership, the sale is still theoretically void, for, as previously stated, the right of the husband or the wife to one-half of the conjugal assets does not vest until the liquidation of the conjugal partnership. Nevertheless, this Court is mindful of the fact that the Tarrosas paid a valuable consideration in the amount of PhP 19,000 for the property in question. Thus, as a matter of fairness and equity, the share of Bonifacio after the liquidation of the partnership should be liable to reimburse the amount paid by the Tarrosas. It is a well-settled principle that no person should unjustly enrich himself at the expense of another.29 WHEREFORE, the petition is DENIED. The CA Decision in CA-G.R. CV No. 88571 is AFFIRMED. Costs against petitioners. SO ORDERED.