Mathews vs Taylor

Facts:

Respondent Benjamin A. Taylor (Benjamin), a British national, married Joselyn

C. Taylor (Joselyn), a 17-year old Filipina. While their marriage was subsisting,
Joselyn bought from Diosa M. Martin a parcel of land located in Boracay.
The sale was allegedly financed by Benjamin. Joselyn and Benjamin, also
using the latters funds, constructed improvements thereon and eventually
converted the property to a vacation and tourist resort known as the Admiral
Ben Bow Inn.
All required permits and licenses for the operation of the resort were
obtained in the name of Ginna Celestino, Joselyns sister.
However, Benjamin and Joselyn had a falling out, and Joselyn ran away with
Kim Philippsen.
Joselyn executed a Special Power of Attorney (SPA) in favor of Benjamin,
authorizing the latter to maintain, sell, lease, and sub-lease and otherwise
enter into contract with third parties with respect to their Boracay property.
Joselyn as lessor and petitioner Philip Matthews as lessee, entered into an
Agreement of Lease (Agreement) involving the Boracay property for a period
of 25 years.
The agreement was signed by the parties and executed before a Notary
Public. Petitioner thereafter took possession of the property and renamed the
resort as Music Garden Resort.
Benjamin instituted an action for Declaration of Nullity of Agreement of Lease
with Damages against Joselyn and the petitioner.
Benjamin claimed that his funds were used in the acquisition and
improvement of the Boracay property, and coupled with the fact that he was
Joselyns husband, any transaction involving said property required his
consent.
Issue: Can an alien husband nullify a lease contract entered into by his
Filipina
wifebought
during
their
marriage?
Held:

The rule is clear and inflexible: aliens are absolutely not allowed to acquire
public or private lands in the Philippines, save only in constitutionally
recognized exceptions. There is no rule more settled than this constitutional
prohibition, as more and more aliens attempt to circumvent the provision by
trying to own lands through another. In a long line of cases, we have settled
issues that directly or indirectly involve the above constitutional provision. We
had cases where aliens wanted that a particular property be declared as part
of their fathers estate; that they be reimbursed the funds used in purchasing
a property titled in the name of another; that an implied trust be declared in
their (aliens) favor; and that a contract of sale be nullified for their lack of
consent. Benjamin has no right to nullify the Agreement of Lease between
Joselyn and petitioner. Benjamin, being an alien, is absolutely prohibited from

acquiring private and public lands in the Philippines. Considering that Joselyn
appeared to be the designated vendee in the Deed of Sale of said property,
she acquired sole ownership thereto. This is true even if we sustain
Benjamins claim that he provided the funds for such acquisition. By entering
into such contract knowing that it was illegal, no implied trust was created in
his favor; no reimbursement for his expenses can be allowed; and no
declaration can be made that the subject property was part of the
conjugal/community property of the spouses. In any event, he had and has no
capacity or personality to question the subsequent lease of the Boracay
property by his wife on the theory that in so doing, he was merely exercising
the prerogative of a husband in respect of conjugal property. To sustain such
a theory would countenance indirect controversion of the constitutional
prohibition. If the property were to be declared conjugal, this would accord
the alien husband a substantial interest and right over the land, as he would
then have a decisive vote as to its transfer or disposition. This is a right that
the Constitution does not permit him to have.

FACTS: Antonia Dela Pena, who was married to Antegono Dela Pena, obtained a loan
from Aguila Sons and Co. As a security for the payment of the said loan, Antonia
executed a Deed of Real Estate Mortgage in favour of Aguila on their residential lot
in Marikina. However, Antonia also executed a Deed Of absolute sale in favour of
Gemma Avila over the same property because of Antonias failure to pay her
obligation from Aguila. Gemma Avila also mortgaged the same property to Far East
Bank and Trust Company (FEBTC-BPI) to secure a loan from the bank. Antonia,
together with her son Alvin John, filed against Gemma praying for the annulment of
the said deed of sale. She claims that the said property was conjugal property and
was sold without the consent of his husband who already died by that time. She also
invokes the presumption of Conjugality under Art. 160 of the Civil Code. The RTC
ruled in favour of Antonia and upheld the presumption of conjugality. The CA ruled
otherwise. Thus, this petition.
ISSUE: W/N the said property that was sold is part of the Conjugal Partnership
HELD: The presumption mentioned in the Art. 160 of the Civil Code applies only for the
property acquired during marriage and does not operate when there is no showing as to
when the property was acquired. Moreover, the presumption in favour of the conjugality is
rebuttable, but only with strong, clear and convincing proof of exclusive ownership.
As the parties invoking the presumption of conjugality under Art. 160 of the Civil Code, the
Dela Penas did not even come close to proving that the subject property was acquired
during the Marriage between Antonia and Antegono. The record is bereft of evidence that
from which the actual acquisition of the property by Antonia was during the Marriage.

Although the title stated in its registration that it is under the name of, Antonia Dela Pena,
married to Antegono dela Pena, such is merely a description of the civil status of the wife

and cannot mean that the husband is also a registered owner. The reason for the
inconclusiveness of the said description is that it is possible that the property was acquired
when she was single but only registered when she got married.

Munoz v Ramirez

FACTS:Respondent-spouses mortgaged a residential lot (which the wife inherited) to

the GSIS to secure a housing loan (200k). Thereafter, they used the money loaned to
construct
a
residential
house
on
said
lot.
It is alleged that MUNOZ granted the spouses a 600k loan, which the latter used to pay
the debt to GSIS. The balance of the loan (400k) will be delivered by MUNOS upon
surrender of the title over the property and an affidavit of waiver of rights (over the
property) to be executed by the husband. While the spouses were able to turn over the
title, no affidavit was signed by the husband. Consequently, MUNOZ refused to give the
400k balance of the loan and since the spouses could no longer return the 200k (which
was already paid to GSIS), MUNOZ kept the title over the property and subsequently,
caused
the
issuance
of
a
new
one
in
his
own
name.
The spouses then filed a case for the annulment of the purported sale of the property in
favor of MUNOZ. The RTC ruled that the property was the wifes exclusive paraphernal
property (since she inherited it from her father) and as such, the sale is valid even
without
the
husbands
consent.
The CA reversed and ruled that while the property was originally exclusive paraphernal
property of the wife, it became conjugal property when it was used as a collateral for a
housing loan that was paid through conjugal funds. Hence, the sale is void.
ISSUE

(1):

Is

the

property

paraphernal

or

conjugal?

RULING: PARAPHERNAL. As a general rule, all property acquired during the marriage
is presumed to be conjugal unless the contrary is proved. In this case, clear evidence
that the wife inherited the lot from her father has sufficiently rebutted this presumption of
conjugalownership. Consequently, the residential lot is the wifes exclusive paraphernal
property
(pursuant
to
Article
92
and
109
of
FC).
It was error for the CA to apply Article 158 of the CC and the ruling on CalimlimCanullas. True, respondents were married during the effectivity of the CC and thus its
provisions should govern their property relations. With the enactment of the FC
however, the provisions of the latter on conjugal partnership of gains superseded those

of the CC. Thus, it is the FC that governs the present case and not the CC. And under
Article 120 of the FC (which supersedes Article 158 of the CC), when the cost of the
improvement and any resulting increase in the value are more than the value of the
property at the time of the improvement, the entire property shall belong to the conjugal
partnership, subject to reimbursement; otherwise, the property shall be retained
in ownership by the owner-spouse, likewise subject to reimbursement for the cost of
improvement.
In this case, the husband only paid a small portion of the GSIS loan (60k). Thus, it is
fairly reasonable to assume that the value of the residential lot is considerably more
than the contribution paid by the husband. Thus, the property remained the exclusive
paraphernal property of the wife at the time she contracted with MUNOZ; the written
consent
of
the
husband
was
not
necessary.
ISSUE (2): Was the transaction a sale or equitable mortgage?
RULING: EQUITABLE MORTGAGE. Under Article 1602 of the CC, a contract is
presumed an equitable mortgage when: (a) price of sale with right to repurchase is
unusually inadequate; (b) vendor remains in possession as lessee or otherwise; (c)
upon or after the expiration of the right to repurchase, another instrument extending the
period of redemption is executed; (d) purchase retains for himself a part of the purchase
price; (e) vendor binds himself to pay the taxes on the thing sold; and, (f) in any other
case it may be fairly inferred that the real intention of the parties is for the transaction to
secure
the
payment
of
a
debt.
In this case, considering that (a) the spouses remained in possession of the property
(albeit as lessees thereof); (b) MUNOZ retained a portion of the purchase price (200k);
(c) it was the spouses who paid real property taxes on the property; and, (d) it was the
wife who secure the payment of the principal debt with the subject property the
parties clearly intended an equitable mortgage and not a contract of sale.