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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

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).

These were the principles that guided the Court in deciding this
petition for review of the Decision 1 dated January 30, 1996 and the
Resolution 2 dated May 28, 1996, promulgated by the Court of Appeals
in CA-GR CV No. 41758, affirming the Decision of the lower court and
denying reconsideration, respectively.

2.
Sometime on April 22, 1988, the couple Gilda and Judie
Corpuz sold one-half portion of their Lot No. 9, Block 8, (LRC) Psd165409 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.

On May 28, 1990, Private Respondent Gilda Corpuz filed an Amended


Complainant 3 against her husband Judie Corpuz and PetitionerSpouses 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

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).

ACCORDINGLY, judgment is rendered for the plaintiff and against the


defendants,

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.)

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 plaintiffappellee'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

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:

First Issue: Void or Voidable Contract?


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.

Petitioners insist that the questioned Deed of Transfer of Rights was


validly executed by the parties-litigants in good faith and for valuable
consideration. The absence of private respondent's consent merely
rendered the Deed voidable under Article 1390 of the Civil Code, which
provides:
Art. 1390. The following contracts are voidable or annullable, even
though there may have been no damage to the contracting parties:
xxx

xxx

xxx

(2)
Those where the consent is vitiated by mistake, violence,
intimidation, undue influence or fraud.
These contracts are binding, unless they are annulled by a proper
action in court. They are susceptible of ratification.(n)
The error in petitioners' contention is evident. Article 1390, par. 2,
refers to contracts visited by vices of consent, i.e., contracts which
were entered into by a person whose consent was obtained and
vitiated through mistake, violence, intimidation, undue influence or
fraud. In this instance, private respondent's consent to the contract of
sale of their conjugal property was totally inexistent or absent. Gilda
Corpuz, on direct examination, testified thus: 11
Q
were?

Now, on March 1, 1990, could you still recall where you

I was still in Manila during that time.

xxx

xxx

xxx

ATTY. FUENTES:
Q

When did you come back to Koronadal, South Cotabato?

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 petitionersspouses, 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.

700,000.00
1,600,000.00
18th month
500,000.00

This agreement was handwritten by petitioner and signed by


Edilberto.6 When petitioner pointed out the conjugal nature of the
properties, Edilberto assured her of his wife's conformity and consent
to the sale.7 The formal typewritten Contracts to Sell were thereafter
prepared by petitioner. The following day, petitioner, the real estate
broker and Edilberto met in the latter's office for the formal signing of
the typewritten Contracts to Sell.8 After Edilberto signed the contracts,
petitioner delivered to him two checks, namely, UCPB Check No. 62807
dated April 15, 1992 for P200,000.00 and UCPB Check No. 62808 also
dated April 15, 1992 for P100,000.00 in the presence of the real estate
broker and an employee in Edilberto's office.9 The contracts were
given to Edilberto for the formal affixing of his wife's signature.
The following day, petitioner received a call from respondent Norma,
requesting a meeting to clarify some provisions of the contracts.10 To
accommodate her queries, petitioner, accompanied by her lawyer, met
with Edilberto and Norma and the real estate broker at Cafe Rizal in
Makati.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

G.R. No. 147978

January 23, 2002

THELMA A. JADER-MANALO, petitioner,


vs.
NORMA FERNANDEZ C. CAMAISA and EDILBERTO CAMAISA,
respondents.
KAPUNAN, J.:
The issue raised in this case is whether or not the husband may validly
dispose of a conjugal property without the wife's written consent.
The present controversy had its beginning when petitioner Thelma A.
Jader-Manalo allegedly came across an advertisement placed by
respondents, the Spouses Norma Fernandez C. Camaisa and Edilberto
Camaisa, in the Classified Ads Section of the newspaper BULLETIN
TODAY in its April, 1992 issue, for the sale of their ten-door apartment
in Makati, as well as that in Taytay, Rizal.
As narrated by petitioner in her complaint filed with the Regional Trial
Court of Makati, Metro Manila, she was interested in buying the two
properties so she negotiated for the purchase through a real estate
broker, Mr. Proceso Ereno, authorized by respondent spouses.1
Petitioner made a visual inspection of the said lots with the real estate
broker and was shown the tax declarations, real property tax payment
receipts, location plans, and vicinity maps relating to the properties.2
Thereafter, petitioner met with the vendors who turned out to be
respondent spouses. She made a definite offer to buy the properties to
respondent Edilberto Camaisa with the knowledge and conformity of
his wife, respondent Norma Camaisa in the presence of the real estate
broker.3 After some bargaining, petitioner and Edilberto agreed upon
the purchase price of P1,500,000.00 for the Taytay property and
P2,100,000.00 for the Makati property4 to be paid on installment basis
with downpayments of P100,000.00 and P200,000.00, respectively, on
April 15, 1992. The balance thereof was to be paid as follows5:

Taytay Property
Makati Property
6th month
P200,000.00
P300,000.00
12th month

When petitioner met again with respondent spouses and the real
estate broker at Edilberto's office for the formal affixing of Norma's
signature, she was surprised when respondent spouses informed her
that they were backing out of the agreement because they needed
"spot cash" for the full amount of the consideration.13 Petitioner
reminded respondent spouses that the contracts to sell had already
been duly perfected and Norma's refusal to sign the same would
unduly prejudice petitioner. Still, Norma refused to sign the contracts
prompting petitioner to file a complaint for specific performance and
damages against respondent spouses before the Regional Trial Court of
Makati, Branch 136 on April 29, 1992, to compel respondent Norma
Camaisa to sign the contracts to sell.
A Motion to Dismiss14 was filed by respondents which was denied by
the trial court in its Resolution of July 21, 1992.15
Respondents then filed their Answer with Compulsory Counter-claim,
alleging that it was an agreement between herein petitioner and
respondent Edilberto Camaisa that the sale of the subject properties
was still subject to the approval and conformity of his wife Norma
Camaisa.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 Judgment21 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 wife's written consent was not obtained in
the contract to sell, the subject conjugal properties belonging to
respondents; hence, the contract was null and void.
On April 14, 1993, the trial court rendered a summary judgment
dismissing the complaint on the ground that under Art. 124 of the
Family Code, the court cannot intervene to authorize the transaction in
the absence of the consent of the wife since said wife who refused to
give consent had not been shown to be incapacitated. The dispositive
portion of the trial court's decision reads:
WHEREFORE, considering these premises, judgment is hereby
rendered:
1. Dismissing the complaint and ordering the cancellation of the Notice
of Lis Pendens by reason of its filing on TCT Nos. (464860) S-8724 and
(464861) S-8725 of the Registry of Deeds at Makati and on TCT Nos.
295976 and 295971 of the Registry of Rizal.
2. Ordering plaintiff Thelma A. Jader to pay defendant spouses Norma
and Edilberto Camaisa, FIFTY THOUSAND (P50,000.00) as Moral
Damages and FIFTY THOUSAND (P50,000.00) as Attorney's Fees.

Costs against plaintiff.22


Petitioner, thus, elevated the case to the Court of Appeals. On
November 29, 2000, the Court of Appeals affirmed the dismissal by the
trial court but deleted the award of P50,000.00 as damages and
P50,000.00 as attorney's fees.
The Court of Appeals explained that the properties subject of the
contracts were conjugal properties and as such, the consent of both
spouses is necessary to give effect to the sale. Since private
respondent Norma Camaisa refused to sign the contracts, the sale was
never perfected. In fact, the downpayment was returned by respondent
spouses and was accepted by petitioner. The Court of Appeals also
stressed that the authority of the court to allow sale or encumbrance of
a conjugal property without the consent of the other spouse is
applicable only in cases where the said spouse is incapacitated or
otherwise unable to participate in the administration of the conjugal
property.
Hence, the present recourse assigning the following errors:
THE HONORABLE COURT OF APPEALS GRIEVIOUSLY ERRED IN
RENDERING SUMMARY JUDGMENT IN DISMISSING THE COMPLAINT
ENTIRELY AND ORDERING THE CANCELLATION OF NOTICE OF LIS
PENDENS ON THE TITLES OF THE SUBJECT REAL PROPERTIES;
THE HONORABLE COURT OF APPEALS GRIEVIOUSLY ERRED IN FAILING
TO CONSIDER THAT THE SALE OF REAL PROPERTIES BY RESPONDENTS
TO PETITIONER HAVE ALREADY BEEN PERFECTED, FOR AFTER THE
LATTER PAID P300,000.00 DOWNPAYMENT, RESPONDENT MRS.
CAMAISA NEVER OBJECTED TO STIPULATIONS WITH RESPECT TO PRICE,
OBJECT AND TERMS OF PAYMENT IN THE CONTRACT TO SELL ALREADY
SIGNED BY THE PETITIONER, RESPONDENT MR. CAMAISA AND
WITNESSES MARKED AS ANNEX "G" IN THE COMPLAINT EXCEPT, FOR
MINOR PROVISIONS ALREADY IMPLIED BY LAW, LIKE EJECTMENT OF
TENANTS, SUBDIVISION OF TITLE AND RESCISSION IN CASE OF
NONPAYMENT, WHICH PETITIONER READILY AGREED AND ACCEDED TO
THEIR INCLUSION;
THE HONORABLE COURT OF APPEALS GRIEVIOUSLY ERRED WHEN IT
FAILED TO CONSIDER THAT CONTRACT OF SALE IS CONSENSUAL AND
IT IS PERFECTED BY THE MERE CONSENT OF THE PARTIES AND THE
APPLICABLE PROVISIONS ARE ARTICLES 1157, 1356, 1357, 1358, 1403,
1405 AND 1475 OF THE CIVIL CODE OF THE PHILIPPINES AND
GOVERNED BY THE STATUTE OF FRAUD.23
The Court does not find error in the decisions of both the trial court and
the Court of Appeals.
Petitioner alleges that the trial court erred when it entered a summary
judgment in favor of respondent spouses there being a genuine issue
of fact. Petitioner maintains that the issue of whether the contracts to
sell between petitioner and respondent spouses was perfected is a
question of fact necessitating a trial on the merits.
The Court does not agree. A summary judgment is one granted by the
court upon motion by a party for an expeditious settlement of a case,
there appearing from the pleadings, depositions, admissions and
affidavits that there are no important questions or issues of fact
involved, and that therefore the moving party is entitled to judgment
as a matter of law.24 A perusal of the pleadings submitted by both
parties show that there is no genuine controversy as to the facts
involved therein.
Both parties admit that there were negotiations for the sale of four
parcels of land between petitioner and respondent spouses; that
petitioner and respondent Edilberto Camaisa came to an agreement as
to the price and the terms of payment, and a downpayment was paid
by petitioner to the latter; and that respondent Norma refused to sign
the contracts to sell. The issue thus posed for resolution in the trial
court was whether or not the contracts to sell between petitioner and
respondent spouses were already perfected such that the latter could
no longer back out of the agreement.
The law requires that the disposition of a conjugal property by the
husband as administrator in appropriate cases requires the written
consent of the wife, otherwise, the disposition is void. Thus, Article 124
of the Family Code provides:
Art. 124. The administration and enjoyment of the conjugal partnership
property shall belong to both spouses jointly. In case of disagreement,
the husband's decision shall prevail, subject to recourse to the court by
the wife for a proper remedy, which must be availed of within five
years from the date of the contract implementing such decision.
In the event that one spouse is incapacitated or otherwise unable to
participate in the administration of the conjugal properties, the other
spouse may assume sole powers of administration. These powers do

not include the powers of disposition or encumbrance which must have


the authority of the court or the written consent of the other spouse. In
the absence of such authority or consent the disposition or
encumbrance shall be void. However, the transaction shall be
construed as a continuing offer on the part of the consenting spouse
and the third person, and may be perfected as a binding contract upon
the acceptance by the other spouse or authorization by the court
before the offer is withdrawn by either or both offerors. (Underscoring
ours.)
The properties subject of the contracts in this case were conjugal;
hence, for the contracts to sell to be effective, the consent of both
husband and wife must concur.
Respondent Norma Camaisa admittedly did not give her written
consent to the sale. Even granting that respondent Norma actively
participated in negotiating for the sale of the subject properties, which
she denied, her written consent to the sale is required by law for its
validity. Significantly, petitioner herself admits that Norma refused to
sign the contracts to sell. Respondent Norma may have been aware of
the negotiations for the sale of their conjugal properties. However,
being merely aware of a transaction is not consent.25
Finally, petitioner argues that since respondent Norma unjustly refuses
to affix her signatures to the contracts to sell, court authorization
under Article 124 of the Family Code is warranted.
The argument is bereft of merit. Petitioner is correct insofar as she
alleges that if the written consent of the other spouse cannot be
obtained or is being withheld, the matter may be brought to court
which will give such authority if the same is warranted by the
circumstances. However, it should be stressed that court authorization
under Art. 124 is only resorted to in cases where the spouse who does
not give consent is incapacitated.26
In this case, petitioner failed to allege and prove that respondent
Norma was incapacitated to give her consent to the contracts. In the
absence of such showing of the wife's incapacity, court authorization
cannot be sought.
Under the foregoing facts, the motion for summary judgment was
proper considering that there was no genuine issue as to any material
fact. The only issue to be resolved by the trial court was whether the
contract to sell involving conjugal properties was valid without the
written consent of the wife.
WHEREFORE, the petition is hereby DENIED and the decision of the
Court of Appeals dated November 29, 2000 in CA-G.R. CV No. 43421
AFFIRMED.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Puno, Pardo, and Ynares-Santiago, JJ.,
concur.

assessment purposes under Assessment of Real Property No. 94-0512802. The Deed of Absolute Sale, however, was executed only in favor
of the late Marcelino Dailo, Jr. as vendee thereof to the exclusion of his
wife.3
On December 1, 1993, Marcelino Dailo, Jr. executed a Special Power of
Attorney (SPA) in favor of one Lilibeth Gesmundo, authorizing the latter
to obtain a loan from petitioner Homeowners Savings and Loan Bank to
be secured by the spouses Dailos house and lot in San Pablo City.
Pursuant to the SPA, Gesmundo obtained a loan in the amount of
P300,000.00 from petitioner. As security therefor, Gesmundo executed
on the same day a Real Estate Mortgage constituted on the subject
property in favor of petitioner. The abovementioned transactions,
including the execution of the SPA in favor of Gesmundo, took place
without the knowledge and consent of respondent.4
Upon maturity, the loan remained outstanding. As a result, petitioner
instituted extrajudicial foreclosure proceedings on the mortgaged
property. After the extrajudicial sale thereof, a Certificate of Sale was
issued in favor of petitioner as the highest bidder. After the lapse of
one year without the property being redeemed, petitioner, through its
vice-president, consolidated the ownership thereof by executing on
June 6, 1996 an Affidavit of Consolidation of Ownership and a Deed of
Absolute Sale.5
In the meantime, Marcelino Dailo, Jr. died on December 20, 1995. In
one of her visits to the subject property, respondent learned that
petitioner had already employed a certain Roldan Brion to clean its
premises and that her car, a Ford sedan, was razed because Brion
allowed a boy to play with fire within the premises.
Claiming that she had no knowledge of the mortgage constituted on
the subject property, which was conjugal in nature, respondent
instituted with the Regional Trial Court, Branch 29, San Pablo City, Civil
Case No. SP-2222 (97) for Nullity of Real Estate Mortgage and
Certificate of Sale, Affidavit of Consolidation of Ownership, Deed of
Sale, Reconveyance with Prayer for Preliminary Injunction and
Damages against petitioner. In the latters Answer with Counterclaim,
petitioner prayed for the dismissal of the complaint on the ground that
the property in question was the exclusive property of the late
Marcelino Dailo, Jr.
After trial on the merits, the trial court rendered a Decision on October
18, 1997. The dispositive portion thereof reads as follows:
WHEREFORE, the plaintiff having proved by the preponderance of
evidence the allegations of the Complaint, the Court finds for the
plaintiff and hereby orders:
ON THE FIRST CAUSE OF ACTION:
1. The declaration of the following documents as null and void:
(a) The Deed of Real Estate Mortgage dated December 1, 1993
executed before Notary Public Romulo Urrea and his notarial register
entered as Doc. No. 212; Page No. 44, Book No. XXI, Series of 1993.
(b) The Certificate of Sale executed by Notary Public Reynaldo
Alcantara on April 20, 1995.
(c) The Affidavit of Consolidation of Ownership executed by the
defendant

G.R. No. 153802. March 11, 2005


HOMEOWNERS SAVINGS & LOAN BANK, Petitioner,
vs.
MIGUELA C. DAILO, Respondents.
DECISION
TINGA, J.:
This is a petition for review on certiorari under Rule 45 of the Revised
Rules of Court, assailing the Decision1 of the Court of Appeals in CAG.R. CV No. 59986 rendered on June 3, 2002, which affirmed with
modification the October 18, 1997 Decision2 of the Regional Trial
Court, Branch 29, San Pablo City, Laguna in Civil Case No. SP-4748
(97).
The following factual antecedents are undisputed.
Respondent Miguela C. Dailo and Marcelino Dailo, Jr. were married on
August 8, 1967. During their marriage, the spouses purchased a house
and lot situated at Barangay San Francisco, San Pablo City from a
certain Sandra Dalida. The subject property was declared for tax

(c) The Affidavit of Consolidation of Ownership executed by the


defendant over the residential lot located at Brgy. San Francisco, San
Pablo City, covered by ARP No. 95-091-1236 entered as Doc. No. 406;
Page No. 83, Book No. III, Series of 1996 of Notary Public Octavio M.
Zayas.
(d) The assessment of real property No. 95-051-1236.
2. The defendant is ordered to reconvey the property subject of this
complaint to the plaintiff.
ON THE SECOND CAUSE OF ACTION
1. The defendant to pay the plaintiff the sum of P40,000.00
representing the value of the car which was burned.
ON BOTH CAUSES OF ACTION
1. The defendant to pay the plaintiff the sum of P25,000.00 as
attorneys fees;
2. The defendant to pay plaintiff P25,000.00 as moral damages;
3. The defendant to pay the plaintiff the sum of P10,000.00 as
exemplary damages;

4. To pay the cost of the suit.


The counterclaim is dismissed.
SO ORDERED.6
Upon elevation of the case to the Court of Appeals, the appellate court
affirmed the trial courts finding that the subject property was conjugal
in nature, in the absence of clear and convincing evidence to rebut the
presumption that the subject property acquired during the marriage of
spouses Dailo belongs to their conjugal partnership.7 The appellate
court declared as void the mortgage on the subject property because it
was constituted without the knowledge and consent of respondent, in
accordance with Article 124 of the Family Code. Thus, it upheld the trial
courts order to reconvey the subject property to respondent.8 With
respect to the damage to respondents car, the appellate court found
petitioner to be liable therefor because it is responsible for the
consequences of the acts or omissions of the person it hired to
accomplish the assigned task.9 All told, the appellate court affirmed
the trial courts Decision, but deleted the award for damages and
attorneys fees for lack of basis.10
Hence, this petition, raising the following issues for this Courts
consideration:
1. WHETHER OR NOT THE MORTGAGE CONSTITUTED BY THE LATE
MARCELINO DAILO, JR. ON THE SUBJECT PROPERTY AS CO-OWNER
THEREOF IS VALID AS TO HIS UNDIVIDED SHARE.
2. WHETHER OR NOT THE CONJUGAL PARTNERSHIP IS LIABLE FOR THE
PAYMENT OF THE LOAN OBTAINED BY THE LATE MARCELINO DAILO, JR.
THE SAME HAVING REDOUNDED TO THE BENEFIT OF THE FAMILY.11
First, petitioner takes issue with the legal provision applicable to the
factual milieu of this case. It contends that Article 124 of the Family
Code should be construed in relation to Article 493 of the Civil Code,
which states:
ART. 493. Each co-owner shall have the full ownership of his part and of
the fruits and benefits pertaining thereto, and he may therefore
alienate, assign or mortgage it, and even substitute another person in
its enjoyment, except when personal rights are involved. But the effect
of the alienation or the mortgage, with respect to the co-owners, shall
be limited to the portion which may be allotted to him in the division
upon the termination of the co-ownership.
Article 124 of the Family Code provides in part:
ART. 124. The administration and enjoyment of the conjugal
partnership property shall belong to both spouses jointly. . . .
In the event that one spouse is incapacitated or otherwise unable to
participate in the administration of the conjugal properties, the other
spouse may assume sole powers of administration. These powers do
not include the powers of disposition or encumbrance which must have
the authority of the court or the written consent of the other spouse. In
the absence of such authority or consent, the disposition or
encumbrance shall be void. . . .
Petitioner argues that although Article 124 of the Family Code requires
the consent of the other spouse to the mortgage of conjugal
properties, the framers of the law could not have intended to curtail
the right of a spouse from exercising full ownership over the portion of
the conjugal property pertaining to him under the concept of coownership.12 Thus, petitioner would have this Court uphold the validity
of the mortgage to the extent of the late Marcelino Dailo, Jr.s share in
the conjugal partnership.
In Guiang v. Court of Appeals,13 it was held that the sale of a conjugal
property requires the consent of both the husband and wife.14 In
applying Article 124 of the Family Code, this Court declared that the
absence of the consent of one renders the entire sale null and void,
including the portion of the conjugal property pertaining to the
husband who contracted the sale. The same principle in Guiang
squarely applies to the instant case. As shall be discussed next, there
is no legal basis to construe Article 493 of the Civil Code as an
exception to Article 124 of the Family Code.
Respondent and the late Marcelino Dailo, Jr. were married on August 8,
1967. In the absence of a marriage settlement, the system of relative
community or conjugal partnership of gains governed the property
relations between respondent and her late husband.15 With the
effectivity of the Family Code on August 3, 1988, Chapter 4 on
Conjugal Partnership of Gains in the Family Code was made applicable
to conjugal partnership of gains already established before its
effectivity unless vested rights have already been acquired under the
Civil Code or other laws.16

The rules on co-ownership do not even apply to the property relations


of respondent and the late Marcelino Dailo, Jr. even in a suppletory
manner. The regime of conjugal partnership of gains is a special type of
partnership, where the husband and wife place in a common fund the
proceeds, products, fruits and income from their separate properties
and those acquired by either or both spouses through their efforts or
by chance.17 Unlike the absolute community of property wherein the
rules on co-ownership apply in a suppletory manner,18 the conjugal
partnership shall be governed by the rules on contract of partnership in
all that is not in conflict with what is expressly determined in the
chapter (on conjugal partnership of gains) or by the spouses in their
marriage settlements.19 Thus, the property relations of respondent
and her late husband shall be governed, foremost, by Chapter 4 on
Conjugal Partnership of Gains of the Family Code and, suppletorily, by
the rules on partnership under the Civil Code. In case of conflict, the
former prevails because the Civil Code provisions on partnership apply
only when the Family Code is silent on the matter.
The basic and established fact is that during his lifetime, without the
knowledge and consent of his wife, Marcelino Dailo, Jr. constituted a
real estate mortgage on the subject property, which formed part of
their conjugal partnership. By express provision of Article 124 of the
Family Code, in the absence of (court) authority or written consent of
the other spouse, any disposition or encumbrance of the conjugal
property shall be void.
The aforequoted provision does not qualify with respect to the share of
the spouse who makes the disposition or encumbrance in the same
manner that the rule on co-ownership under Article 493 of the Civil
Code does. Where the law does not distinguish, courts should not
distinguish.20 Thus, both the trial court and the appellate court are
correct in declaring the nullity of the real estate mortgage on the
subject property for lack of respondents consent.
Second, petitioner imposes the liability for the payment of the principal
obligation obtained by the late Marcelino Dailo, Jr. on the conjugal
partnership to the extent that it redounded to the benefit of the
family.21
Under Article 121 of the Family Code, "[T]he conjugal partnership shall
be liable for: . . . (3) Debts and obligations contracted by either spouse
without the consent of the other to the extent that the family may
have been benefited; . . . ." For the subject property to be held liable,
the obligation contracted by the late Marcelino Dailo, Jr. must have
redounded to the benefit of the conjugal partnership. There must be
the requisite showing then of some advantage which clearly accrued to
the welfare of the spouses. Certainly, to make a conjugal partnership
respond for a liability that should appertain to the husband alone is to
defeat and frustrate the avowed objective of the new Civil Code to
show the utmost concern for the solidarity and well-being of the family
as a unit.22
The burden of proof that the debt was contracted for the benefit of the
conjugal partnership of gains lies with the creditor-party litigant
claiming as such.23 Ei incumbit probatio qui dicit, non qui negat (he
who asserts, not he who denies, must prove).24 Petitioners sweeping
conclusion that the loan obtained by the late Marcelino Dailo, Jr. to
finance the construction of housing units without a doubt redounded to
the benefit of his family, without adducing adequate proof, does not
persuade this Court. Other than petitioners bare allegation, there is
nothing from the records of the case to compel a finding that, indeed,
the loan obtained by the late Marcelino Dailo, Jr. redounded to the
benefit of the family. Consequently, the conjugal partnership cannot be
held liable for the payment of the principal obligation.
In addition, a perusal of the records of the case reveals that during the
trial, petitioner vigorously asserted that the subject property was the
exclusive property of the late Marcelino Dailo, Jr. Nowhere in the
answer filed with the trial court was it alleged that the proceeds of the
loan redounded to the benefit of the family. Even on appeal, petitioner
never claimed that the family benefited from the proceeds of the loan.
When a party adopts a certain theory in the court below, he will not be
permitted to change his theory on appeal, for to permit him to do so
would not only be unfair to the other party but it would also be
offensive to the basic rules of fair play, justice and due process.25 A
party may change his legal theory on appeal only when the factual
bases thereof would not require presentation of any further evidence
by the adverse party in order to enable it to properly meet the issue
raised in the new theory.26
WHEREFORE, the petition is DENIED. Costs against petitioner.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Chico-Nazario, JJ.,
concur.

G.R. No. 160708

October 16, 2009

PATROCINIA RAVINA AND WILFREDO RAVINA, Petitioners,


vs.
MARY ANN P. VILLA ABRILLE, for herself and in behalf of INGRID D'LYN P.
VILLA ABRILLE, INGREMARK D'WIGHT VILLA ABRILLE, INGRESOLL DIELS
VILLA ABRILLE AND INGRELYN DYAN VILLA ABRILLE, Respondents.
DECISION
QUISUMBING, Acting C.J.:
For review are the Decision1 dated February 21, 2002 and the
Resolution2 dated October 7, 2003 of the Court of Appeals in CA-G.R.
CV No. 54560. The appellate court modified the Decision3 dated
September 26, 1995 of the Regional Trial Court (RTC) of Davao City,
Branch 15.
Simply stated, the facts as found by the Court of Appeals4 are as
follows:
Respondent Mary Ann Pasaol Villa Abrille and Pedro Villa Abrille are
husband and wife. They have four children, who are also parties to the
instant case and are represented by their mother, Mary Ann.
In 1982, the spouses acquired a 555-square meter parcel of land
denominated as Lot 7, located at Kamuning Street, Juna Subdivision,
Matina, Davao City, and covered by Transfer Certificate of Title (TCT)
No. T-88674 in their names. Said lot is adjacent to a parcel of land
which Pedro acquired when he was still single and which is registered
solely in his name under TCT No. T-26471.
Through their joint efforts and the proceeds of a loan from the
Development Bank of the Philippines (DBP), the spouses built a house
on Lot 7 and Pedros lot. The house was finished in the early 1980s but
the spouses continuously made improvements, including a poultry
house and an annex.
In 1991, Pedro got a mistress and began to neglect his family. Mary
Ann was forced to sell or mortgage their movables to support the
family and the studies of her children. By himself, Pedro offered to sell
the house and the two lots to herein petitioners, Patrocinia and
Wilfredo Ravina. Mary Ann objected and notified the petitioners of her
objections, but Pedro nonetheless sold the house and the two lots
without Mary Anns consent, as evidenced by a Deed of Sale5 dated
June 21, 1991. It appears on the said deed that Mary Ann did not sign
on top of her name.
On July 5, 1991 while Mary Ann was outside the house and the four
children were in school, Pedro together with armed members of the
Civilian Armed Forces Geographical Unit (CAFGU) and acting in
connivance with petitioners6 began transferring all their belongings
from the house to an apartment.
When Mary Ann and her daughter Ingrid Villa Abrille came home, they
were stopped from entering it. They waited outside the gate until
evening under the rain. They sought help from the Talomo Police
Station, but police authorities refused to intervene, saying that it was a
family matter. Mary Ann alleged that the incident caused stress,
tension and anxiety to her children, so much so that one flunked at
school. Thus, respondents Mary Ann and her children filed a complaint
for Annulment of Sale, Specific Performance, Damages and Attorneys
Fees with Preliminary Mandatory Injunction7 against Pedro and herein
petitioners (the Ravinas) in the RTC of Davao City.
During the trial, Pedro declared that the house was built with his own
money. Petitioner Patrocinia Ravina testified that they bought the
house and lot from Pedro, and that her husband, petitioner Wilfredo
Ravina, examined the titles when they bought the property.
On September 26, 1995, the trial court ruled in favor of herein
respondent Mary Ann P. Villa Abrille as follows:
WHEREFORE, judgment is rendered as follows:
1. The sale of lot 8 covered by TCT No. 26471 by defendant Pedro
Abrille appearing in the Deed of Sale marked as Exh. "E" is void as to
one half or 277.5 square meters representing the share of plaintiff
Mary Villa Abrille.
2. That sale of Lot 7 covered by TCT No. [88674] by defendant Pedro
Villa Abrille in the Deed of Sale (Exh. "A") is valid as to one half or
277.5 square meters of the 555 square meters as one half belongs to

defendant Pedro Abrille but it is void as to the other half or 277.5


square meters as it belongs to plaintiff Mary Abrille who did not sell her
share nor give her consent to the sale.
3. That sale of the house mentioned in the Deed of Sale (Exh. "A") is
valid as far as the one half of the house representing the share of
defendant Pedro Abrille is concerned but void as to the other half which
is the share of plaintiff Mary Abrille because she did not give her
consent/sign the said sale.
4. The defendants shall jointly pay the plaintiffs.
4. A. Seventeen Thousand Pesos (P17,000.00) representing the value
of the movables and belonging[s] that were lost when unknown men
unceremoniously and without their knowledge and consent removed
their movables from their house and brought them to an apartment.
4. B. One Hundred Thousand Pesos (P 100,000.00) to plaintiff Mary
Abrille as moral damages.
4. C. Fifty Thousand Pesos (P50,000.00) to each of the four children as
moral damages, namely:
a) Ingrid Villa Abrille Fifty Thousand Pesos (P50,000.00), b) Ingremark
Villa Abrille Fifty Thousand Pesos (P50,000.00), c) Ingresoll Villa
Abrille Fifty Thousand Pesos (P50,000.00) and d) Ingrelyn Villa Abrille
Fifty Thousand Pesos (P50,000.00).
5. Ten Thousand Pesos (P10,000.00) as exemplary damages by way of
example and correction for the public good.
6. The costs of suit.8
On appeal, the Court of Appeals modified the decision, thus:
WHEREFORE, the appealed judgment is hereby MODIFIED as follows:
1. The sale of lot covered by TCT No. 26471 in favor of defendants
spouses Wilfredo and Patrocinia Ravina is declared valid.
2. The sale of lot covered by TCT No. 88674 in favor of said defendants
spouses Ravina, together with the house thereon, is declared null and
void.
3. Defendant Pedro Abrille is ordered to return the value of the
consideration for the lot covered by TCT No. 88674 and the house
thereon to co-defendants spouses Ravina.
4. Defendants spouses Ravina [a]re ordered to reconvey the lot and
house covered by TCT No. 88674 in favor of spouses Pedro and Mary
Villa Abrille and to deliver possession to them.
5. Plaintiffs are given the option to exercise their rights under Article
[450] of the New Civil Code with respect to the improvements
introduced by defendant spouses Ravina.
6. Defendants Pedro Villa Abrille and spouses Ravina are ordered to
pay jointly and severally the plaintiffs as follows:
a) One Hundred Thousand Pesos (P100,000.00) to plaintiff Mary Villa
Abrille as moral damages.
b) Fifty Thousand Pesos (P50,000.00) as moral damages to each of the
four children, namely: Ingrid Villa Abrille, Ingremark Villa Abrille,
Ingresoll Villa Abrille and Ingrelyn Villa Abrille.
c) Ten Thousand (P10,000.00) as exemplary damages by way of
example and correction for the public good.
SO ORDERED.9
Their Motion for Reconsideration having been denied, petitioners filed
this petition. Petitioners argue that:
I.
THE COURT OF APPEALS ERRED WHEN IT DECLARED x x x THE SALE OF
LOT COVERED BY TCT NO. 88674 IN FAVOR OF SPOUSES RAVINA,
TOGETHER WITH THE HOUSE THEREON, AS NULL AND VOID SINCE IT IS
CLEARLY CONTRARY TO LAW AND EVIDENCE.
II.
THE COURT OF APPEALS ERRED WHEN IT RULED THAT PETITIONERS
PATROCIN[I]A RAVINA AND WILFREDO RAVINA ARE NOT INNOCENT
PURCHASERS FOR VALUE, THE SAME BEING CONTRARY TO LAW AND
EVIDENCE.

III.
THE COURT OF APPEALS ERRED WHEN IT RULED THAT PETITIONERS
PATROCIN[I]A RAVINA AND WILFREDO RAVINA ARE LIABLE FOR
DAMAGES, THE SAME BEING CONTRARY TO LAW AND EVIDENCE.10
In essence, petitioners assail the appellate courts declaration that the
sale to them by Pedro of the lot covered by TCT No. T-88674 is null and
void. However, in addressing this issue, it is imperative to determine:
(1) whether the subject property covered by TCT No. T-88674 is an
exclusive property of Pedro or conjugal property, and (2) whether its
sale by Pedro was valid considering the absence of Mary Anns
consent.
Petitioners assert that the subject lot covered by TCT No. T-88674 was
the exclusive property of Pedro having been acquired by him through
barter or exchange.11 They allege that the subject lot was acquired by
Pedro with the proceeds of the sale of one of his exclusive properties.
Allegedly, Pedro and his sister Carmelita initially agreed to exchange
their exclusive lots covered by TCT No. T-26479 and TCT No. T-26472,
respectively. Later, however, Pedro sold the lot covered by TCT No. T26472 to one Francisca Teh Ting and purchased the property of
Carmelita using the proceeds of the sale. A new title, TCT No. T-88674,
was issued thereafter. Thus, petitioners insist that the subject lot
remains to be an exclusive property of Pedro as it was acquired or
purchased through the exclusive funds or money of the latter.
We are not persuaded. Article 160 of the New Civil Code provides, "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."
There is no issue with regard to the lot covered by TCT No. T-26471,
which was an exclusive property of Pedro, having been acquired by him
before his marriage to Mary Ann. However, the lot covered by TCT No.
T-88674 was acquired in 1982 during the marriage of Pedro and Mary
Ann. No evidence was adduced to show that the subject property was
acquired through exchange or barter. The presumption of the conjugal
nature of the property subsists in the absence of clear, satisfactory and
convincing evidence to overcome said presumption or to prove that the
subject property is exclusively owned by Pedro.12 Petitioners bare
assertion would not suffice to overcome the presumption that TCT No.
T-88674, acquired during the marriage of Pedro and Mary Ann, is
conjugal. Likewise, the house built thereon is conjugal property, having
been constructed through the joint efforts of the spouses, who had
even obtained a loan from DBP to construct the house.1avvphi1
Significantly, a sale or encumbrance of conjugal property concluded
after the effectivity of the Family Code on August 3, 1988, is governed
by Article 124 of the same Code that now treats such a disposition to
be void if done (a) without the consent of both the husband and the
wife, or (b) in case of one spouses inability, the authority of the court.
Article 124 of the Family Code, the governing law at the time the
assailed sale was contracted, is explicit:
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 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. (Emphasis
supplied.)
The particular provision in the New Civil Code giving the wife ten (10)
years to annul the alienation or encumbrance was not carried over to
the Family Code. It is thus clear that alienation or encumbrance of the
conjugal partnership property by the husband without the consent of
the wife is null and void.
Hence, just like the rule in absolute community of property, if the
husband, without knowledge and consent of the wife, sells conjugal
property, such sale is void. If the sale was with the knowledge but
without the approval of the wife, thereby resulting in a disagreement,
such sale is annullable at the instance of the wife who is given five (5)
years from the date the contract implementing the decision of the
husband to institute the case.13

Here, respondent Mary Ann timely filed the action for annulment of
sale within five (5) years from the date of sale and execution of the
deed. However, her action to annul the sale pertains only to the
conjugal house and lot and does not include the lot covered by TCT No.
T-26471, a property exclusively belonging to Pedro and which he can
dispose of freely without Mary Anns consent.

WHEREFORE, we deny the instant petition for lack of merit. The


Decision dated February 21, 2002 and the Resolution dated October 7,
2003 of the Court of Appeals in CA-G.R. CV No. 54560 are AFFIRMED.
Costs against petitioners.
SO ORDERED.

On the second assignment of error, petitioners contend that they are


buyers in good faith.14 Accordingly, they need not inquire whether the
lot was purchased by money exclusively belonging to Pedro or of the
common fund of the spouses and may rely on the certificates of title.

LEONARDO A. QUISUMBING
Acting Chief Justice

The contention is bereft of merit. As correctly held by the Court of


Appeals, a purchaser in good faith is one who buys the property of
another without notice that some other person has a right to, or
interest in, such property and pays a full and fair price for the same at
the time of such purchase, or before he has notice of the claim or
interest of some other person in the property.15 To establish his status
as a buyer for value in good faith, a person dealing with land registered
in the name of and occupied by the seller need only show that he
relied on the face of the sellers certificate of title. But for a person
dealing with land registered in the name of and occupied by the seller
whose capacity to sell is restricted, such as by Articles 166 and 173 of
the Civil Code or Article 124 of the Family Code, he must show that he
inquired into the latters capacity to sell in order to establish himself as
a buyer for value in good faith.161avvphi1

CONCHITA CARPIO MORALES


Associate Justice

In the present case, the property is registered in the name of Pedro and
his wife, Mary Ann. Petitioners cannot deny knowledge that during the
time of the sale in 1991, Pedro was married to Mary Ann. However,
Mary Anns conformity did not appear in the deed. Even assuming that
petitioners believed in good faith that the subject property is the
exclusive property of Pedro, they were apprised by Mary Anns lawyer
of her objection to the sale and yet they still proceeded to purchase
the property without Mary Anns written consent. Moreover, the
respondents were the ones in actual, visible and public possession of
the property at the time the transaction was being made. Thus, at the
time of sale, petitioners knew that Mary Ann has a right to or interest
in the subject properties and yet they failed to obtain her conformity to
the deed of sale. Hence, petitioners cannot now invoke the protection
accorded to purchasers in good faith.
Now, if a voidable contract is annulled, the restoration of what has
been given is proper. The relationship between the parties in any
contract even if subsequently annulled must always be characterized
and punctuated by good faith and fair dealing.17 Hence, in consonance
with justice and equity and the salutary principle of non-enrichment at
anothers expense, we sustain the appellate courts order directing
Pedro to return to petitioner spouses the value of the consideration for
the lot covered by TCT No. T-88674 and the house thereon.
However, this court rules that petitioners cannot claim reimbursements
for improvements they introduced after their good faith had ceased. As
correctly found by the Court of Appeals, petitioner Patrocinia Ravina
made improvements and renovations on the house and lot at the time
when the complaint against them was filed. Ravina continued
introducing improvements during the pendency of the action.18
Thus, Article 449 of the New Civil Code is applicable. It provides that,
"(h)e who builds, plants or sows in bad faith on the land of another,
loses what is built, planted or sown without right to indemnity."19
On the last issue, petitioners claim that the decision awarding
damages to respondents is not supported by the evidence on record.20
The claim is erroneous to say the least. The manner by which
respondent and her children were removed from the family home
deserves our condemnation. On July 5, 1991, while respondent was out
and her children were in school, Pedro Villa Abrille acting in connivance
with the petitioners21 surreptitiously transferred all their personal
belongings to another place. The respondents then were not allowed to
enter their rightful home or family abode despite their impassioned
pleas.
Firmly established in our civil law is the doctrine that: "Every person
must, in the exercise of his rights and in the performance of his duties,
act with justice, give everyone his due, and observe honesty and good
faith."22 When a right is exercised in a manner that does not conform
with such norms and results in damages to another, a legal wrong is
thereby committed for which the wrong doer must be held responsible.
Similarly, any person who willfully causes loss or injury to another in a
manner that is contrary to morals, good customs or public policy shall
compensate the latter for the damages caused.23 It is patent in this
case that petitioners alleged acts fall short of these established civil
law standards.

WE CONCUR:

ARTURO D. BRION
Associate Justice
Associate Justice
ROBERTO A. ABAD
Associate Justice

LUCAS P. BERSAMIN

CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, I certify that the
conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Courts
Division.
LEONARDO A. QUISUMBING
Acting Chief Justice

G.R. No. 178902

April 21, 2010

MANUEL O. FUENTES and LETICIA L. FUENTES, Petitioners,


vs.
CONRADO G. ROCA, ANNABELLE R. JOSON, ROSE MARIE R. CRISTOBAL
and PILAR MALCAMPO, Respondents.
DECISION
ABAD, J.:
This case is about a husbands sale of conjugal real property,
employing a challenged affidavit of consent from an estranged wife.
The buyers claim valid consent, loss of right to declare nullity of sale,
and prescription.
The Facts and the Case
Sabina Tarroza owned a titled 358-square meter lot in Canelar,
Zamboanga City. On October 11, 1982 she sold it to her son, Tarciano
T. Roca (Tarciano) under a deed of absolute sale.1 But Tarciano did not
for the meantime have the registered title transferred to his name.
Six years later in 1988, Tarciano offered to sell the lot to petitioners
Manuel and Leticia Fuentes (the Fuentes spouses). They arranged to
meet at the office of Atty. Romulo D. Plagata whom they asked to
prepare the documents of sale. They later signed an agreement to sell
that Atty. Plagata prepared2 dated April 29, 1988, which agreement
expressly stated that it was to take effect in six months.
The agreement required the Fuentes spouses to pay Tarciano a down
payment of P60,000.00 for the transfer of the lots title to him. And,
within six months, Tarciano was to clear the lot of structures and
occupants and secure the consent of his estranged wife, Rosario
Gabriel Roca (Rosario), to the sale. Upon Tarcianos compliance with
these conditions, the Fuentes spouses were to take possession of the
lot and pay him an additional P140,000.00 or P160,000.00, depending
on whether or not he succeeded in demolishing the house standing on
it. If Tarciano was unable to comply with these conditions, the Fuentes
spouses would become owners of the lot without any further formality
and payment.
The parties left their signed agreement with Atty. Plagata who then
worked on the other requirements of the sale. According to the lawyer,
he went to see Rosario in one of his trips to Manila and had her sign an
affidavit of consent.3 As soon as Tarciano met the other conditions,
Atty. Plagata notarized Rosarios affidavit in Zamboanga City. On
January 11, 1989 Tarciano executed a deed of absolute sale4 in favor of
the Fuentes spouses. They then paid him the additional P140,000.00
mentioned in their agreement. A new title was issued in the name of
the spouses5 who immediately constructed a building on the lot. On
January 28, 1990 Tarciano passed away, followed by his wife Rosario
who died nine months afterwards.

Eight years later in 1997, the children of Tarciano and Rosario, namely,
respondents Conrado G. Roca, Annabelle R. Joson, and Rose Marie R.
Cristobal, together with Tarcianos sister, Pilar R. Malcampo,
represented by her son, John Paul M. Trinidad (collectively, the Rocas),
filed an action for annulment of sale and reconveyance of the land
against the Fuentes spouses before the Regional Trial Court (RTC) of
Zamboanga City in Civil Case 4707. The Rocas claimed that the sale to
the spouses was void since Tarcianos wife, Rosario, did not give her
consent to it. Her signature on the affidavit of consent had been
forged. They thus prayed that the property be reconveyed to them
upon reimbursement of the price that the Fuentes spouses paid
Tarciano.6
The spouses denied the Rocas allegations. They presented Atty.
Plagata who testified that he personally saw Rosario sign the affidavit
at her residence in Paco, Manila, on September 15, 1988. He admitted,
however, that he notarized the document in Zamboanga City four
months later on January 11, 1989.7 All the same, the Fuentes spouses
pointed out that the claim of forgery was personal to Rosario and she
alone could invoke it. Besides, the four-year prescriptive period for
nullifying the sale on ground of fraud had already lapsed.
Both the Rocas and the Fuentes spouses presented handwriting
experts at the trial. Comparing Rosarios standard signature on the
affidavit with those on various documents she signed, the Rocas
expert testified that the signatures were not written by the same
person. Making the same comparison, the spouses expert concluded
that they were.8
On February 1, 2005 the RTC rendered judgment, dismissing the case.
It ruled that the action had already prescribed since the ground cited
by the Rocas for annulling the sale, forgery or fraud, already prescribed
under Article 1391 of the Civil Code four years after its discovery. In
this case, the Rocas may be deemed to have notice of the fraud from
the date the deed of sale was registered with the Registry of Deeds
and the new title was issued. Here, the Rocas filed their action in 1997,
almost nine years after the title was issued to the Fuentes spouses on
January 18, 1989.9
Moreover, the Rocas failed to present clear and convincing evidence of
the fraud. Mere variance in the signatures of Rosario was not
conclusive proof of forgery.10 The RTC ruled that, although the Rocas
presented a handwriting expert, the trial court could not be bound by
his opinion since the opposing expert witness contradicted the same.
Atty. Plagatas testimony remained technically unrebutted.11
Finally, the RTC noted that Atty. Plagatas defective notarization of the
affidavit of consent did not invalidate the sale. The law does not
require spousal consent to be on the deed of sale to be valid. Neither
does the irregularity vitiate Rosarios consent. She personally signed
the affidavit in the presence of Atty. Plagata.12
On appeal, the Court of Appeals (CA) reversed the RTC decision. The
CA found sufficient evidence of forgery and did not give credence to
Atty. Plagatas testimony that he saw Rosario sign the document in
Quezon City. Its jurat said differently. Also, upon comparing the
questioned signature with the specimen signatures, the CA noted
significant variance between them. That Tarciano and Rosario had been
living separately for 30 years since 1958 also reinforced the conclusion
that her signature had been forged.
Since Tarciano and Rosario were married in 1950, the CA concluded
that their property relations were governed by the Civil Code under
which an action for annulment of sale on the ground of lack of spousal
consent may be brought by the wife during the marriage within 10
years from the transaction. Consequently, the action that the Rocas,
her heirs, brought in 1997 fell within 10 years of the January 11, 1989
sale.
Considering, however, that the sale between the Fuentes spouses and
Tarciano was merely voidable, the CA held that its annulment entitled
the spouses to reimbursement of what they paid him plus legal interest
computed from the filing of the complaint until actual payment. Since
the Fuentes spouses were also builders in good faith, they were
entitled under Article 448 of the Civil Code to payment of the value of
the improvements they introduced on the lot. The CA did not award
damages in favor of the Rocas and deleted the award of attorneys fees
to the Fuentes spouses.13
Unsatisfied with the CA decision, the Fuentes spouses came to this
court by petition for review.14
The Issues Presented
The case presents the following issues:

1. Whether or not Rosarios signature on the document of consent to


her husband Tarcianos sale of their conjugal land to the Fuentes
spouses was forged;
2. Whether or not the Rocas action for the declaration of nullity of that
sale to the spouses already prescribed; and
3. Whether or not only Rosario, the wife whose consent was not had,
could bring the action to annul that sale.
The Courts Rulings
First. The key issue in this case is whether or not Rosarios signature on
the document of consent had been forged. For, if the signature were
genuine, the fact that she gave her consent to her husbands sale of
the conjugal land would render the other issues merely academic.
The CA found that Rosarios signature had been forged. The CA
observed a marked difference between her signature on the affidavit of
consent15 and her specimen signatures.16 The CA gave no weight to
Atty. Plagatas testimony that he saw Rosario sign the document in
Manila on September 15, 1988 since this clashed with his declaration
in the jurat that Rosario signed the affidavit in Zamboanga City on
January 11, 1989.
The Court agrees with the CAs observation that Rosarios signature
strokes on the affidavit appears heavy, deliberate, and forced. Her
specimen signatures, on the other hand, are consistently of a lighter
stroke and more fluid. The way the letters "R" and "s" were written is
also remarkably different. The variance is obvious even to the
untrained eye.
Significantly, Rosarios specimen signatures were made at about the
time that she signed the supposed affidavit of consent. They were,
therefore, reliable standards for comparison. The Fuentes spouses
presented no evidence that Rosario suffered from any illness or disease
that accounted for the variance in her signature when she signed the
affidavit of consent. Notably, Rosario had been living separately from
Tarciano for 30 years since 1958. And she resided so far away in
Manila. It would have been quite tempting for Tarciano to just forge her
signature and avoid the risk that she would not give her consent to the
sale or demand a stiff price for it.
What is more, Atty. Plagata admittedly falsified the jurat of the affidavit
of consent. That jurat declared that Rosario swore to the document and
signed it in Zamboanga City on January 11, 1989 when, as Atty. Plagata
testified, she supposedly signed it about four months earlier at her
residence in Paco, Manila on September 15, 1988. While a defective
notarization will merely strip the document of its public character and
reduce it to a private instrument, that falsified jurat, taken together
with the marks of forgery in the signature, dooms such document as
proof of Rosarios consent to the sale of the land. That the Fuentes
spouses honestly relied on the notarized affidavit as proof of Rosarios
consent does not matter. The sale is still void without an authentic
consent.
Second. Contrary to the ruling of the Court of Appeals, the law that
applies to this case is the Family Code, not the Civil Code. Although
Tarciano and Rosario got married in 1950, Tarciano sold the conjugal
property to the Fuentes spouses on January 11, 1989, a few months
after the Family Code took effect on August 3, 1988.
When Tarciano married Rosario, the Civil Code put in place the system
of conjugal partnership of gains on their property relations. While its
Article 165 made Tarciano the sole administrator of the conjugal
partnership, Article 16617 prohibited him from selling commonly
owned real property without his wifes consent. Still, if he sold the
same without his wifes consent, the sale is not void but merely
voidable. Article 173 gave Rosario the right to have the sale annulled
during the marriage within ten years from the date of the sale. Failing
in that, she or her heirs may demand, after dissolution of the marriage,
only the value of the property that Tarciano fraudulently sold. Thus:
Art. 173. The wife may, during the marriage, and within ten years from
the transaction questioned, ask the courts for the annulment of any
contract of the husband entered into without her consent, when such
consent is required, or any act or contract of the husband which tends
to defraud her or impair her interest in the conjugal partnership
property. Should the wife fail to exercise this right, she or her heirs,
after the dissolution of the marriage, may demand the value of
property fraudulently alienated by the husband.
But, as already stated, the Family Code took effect on August 3, 1988.
Its Chapter 4 on Conjugal Partnership of Gains expressly superseded
Title VI, Book I of the Civil Code on Property Relations Between
Husband and Wife.18 Further, the Family Code provisions were also
made to apply to already existing conjugal partnerships without
prejudice to vested rights.19 Thus:

Art. 105. x x x The provisions of this Chapter shall also apply to


conjugal partnerships of gains already established between spouses
before the effectivity of this Code, without prejudice to vested rights
already acquired in accordance with the Civil Code or other laws, as
provided in Article 256. (n)
Consequently, when Tarciano sold the conjugal lot to the Fuentes
spouses on January 11, 1989, the law that governed the disposal of
that lot was already the Family Code.
In contrast to Article 173 of the Civil Code, Article 124 of the Family
Code does not provide a period within which the wife who gave no
consent may assail her husbands sale of the real property. It simply
provides that without the other spouses written consent or a court
order allowing the sale, the same would be void. Article 124 thus
provides:
Art. 124. x x x In the event that one spouse is incapacitated or
otherwise unable to participate in the administration of the conjugal
properties, the other spouse may assume sole powers of
administration. These powers do not include the powers of disposition
or encumbrance which must have the authority of the court or the
written consent of the other spouse. In the absence of such authority
or consent, the disposition or encumbrance shall be void. x x x
Under the provisions of the Civil Code governing contracts, a void or
inexistent contract has no force and effect from the very beginning.
And this rule applies to contracts that are declared void by positive
provision of law,20 as in the case of a sale of conjugal property without
the other spouses written consent. A void contract is equivalent to
nothing and is absolutely wanting in civil effects. It cannot be validated
either by ratification or prescription.21
But, although a void contract has no legal effects even if no action is
taken to set it aside, when any of its terms have been performed, an
action to declare its inexistence is necessary to allow restitution of
what has been given under it.22 This action, according to Article 1410
of the Civil Code does not prescribe. Thus:
Art. 1410. The action or defense for the declaration of the inexistence
of a contract does not prescribe.
Here, the Rocas filed an action against the Fuentes spouses in 1997 for
annulment of sale and reconveyance of the real property that Tarciano
sold without their mothers (his wifes) written consent. The passage of
time did not erode the right to bring such an action.
Besides, even assuming that it is the Civil Code that applies to the
transaction as the CA held, Article 173 provides that the wife may bring
an action for annulment of sale on the ground of lack of spousal
consent during the marriage within 10 years from the transaction.
Consequently, the action that the Rocas, her heirs, brought in 1997 fell
within 10 years of the January 11, 1989 sale. It did not yet prescribe.
The Fuentes spouses of course argue that the RTC nullified the sale to
them based on fraud and that, therefore, the applicable prescriptive
period should be that which applies to fraudulent transactions, namely,
four years from its discovery. Since notice of the sale may be deemed
given to the Rocas when it was registered with the Registry of Deeds in
1989, their right of action already prescribed in 1993.
But, if there had been a victim of fraud in this case, it would be the
Fuentes spouses in that they appeared to have agreed to buy the
property upon an honest belief that Rosarios written consent to the
sale was genuine. They had four years then from the time they learned
that her signature had been forged within which to file an action to
annul the sale and get back their money plus damages. They never
exercised the right.
If, on the other hand, Rosario had agreed to sign the document of
consent upon a false representation that the property would go to their
children, not to strangers, and it turned out that this was not the case,
then she would have four years from the time she discovered the fraud
within which to file an action to declare the sale void. But that is not
the case here. Rosario was not a victim of fraud or misrepresentation.
Her consent was simply not obtained at all. She lost nothing since the
sale without her written consent was void. Ultimately, the Rocas
ground for annulment is not forgery but the lack of written consent of
their mother to the sale. The forgery is merely evidence of lack of
consent.
Third. The Fuentes spouses point out that it was to Rosario, whose
consent was not obtained, that the law gave the right to bring an
action to declare void her husbands sale of conjugal land. But here,
Rosario died in 1990, the year after the sale. Does this mean that the
right to have the sale declared void is forever lost?

The answer is no. As stated above, that sale was void from the
beginning. Consequently, the land remained the property of Tarciano
and Rosario despite that sale. When the two died, they passed on the
ownership of the property to their heirs, namely, the Rocas.23 As
lawful owners, the Rocas had the right, under Article 429 of the Civil
Code, to exclude any person from its enjoyment and disposal.1avvphi1
In fairness to the Fuentes spouses, however, they should be entitled,
among other things, to recover from Tarcianos heirs, the Rocas, the
P200,000.00 that they paid him, with legal interest until fully paid,
chargeable against his estate.
Further, the Fuentes spouses appear to have acted in good faith in
entering the land and building improvements on it. Atty. Plagata, whom
the parties mutually entrusted with closing and documenting the
transaction, represented that he got Rosarios signature on the
affidavit of consent. The Fuentes spouses had no reason to believe that
the lawyer had violated his commission and his oath. They had no way
of knowing that Rosario did not come to Zamboanga to give her
consent. There is no evidence that they had a premonition that the
requirement of consent presented some difficulty. Indeed, they willingly
made a 30 percent down payment on the selling price months earlier
on the assurance that it was forthcoming.
Further, the notarized document appears to have comforted the
Fuentes spouses that everything was already in order when Tarciano
executed a deed of absolute sale in their favor on January 11, 1989. In
fact, they paid the balance due him. And, acting on the documents
submitted to it, the Register of Deeds of Zamboanga City issued a new
title in the names of the Fuentes spouses. It was only after all these
had passed that the spouses entered the property and built on it. He is
deemed a possessor in good faith, said Article 526 of the Civil Code,
who is not aware that there exists in his title or mode of acquisition any
flaw which invalidates it.
As possessor in good faith, the Fuentes spouses were under no
obligation to pay for their stay on the property prior to its legal
interruption by a final judgment against them.24 What is more, they
are entitled under Article 448 to indemnity for the improvements they
introduced into the property with a right of retention until the
reimbursement is made. Thus:
Art. 448. The owner of the land on which anything has been built, sown
or planted in good faith, shall have the right to appropriate as his own
the works, sowing or planting, after payment of the indemnity provided
for in Articles 546 and 548, or to oblige the one who built or planted to
pay the price of the land, and the one who sowed, the proper rent.
However, the builder or planter cannot be obliged to buy the land if its
value is considerably more than that of the building or trees. In such
case, he shall pay reasonable rent, if the owner of the land does not
choose to appropriate the building or trees after proper indemnity. The
parties shall agree upon the terms of the lease and in case of
disagreement, the court shall fix the terms thereof. (361a)
The Rocas shall of course have the option, pursuant to Article 546 of
the Civil Code,25 of indemnifying the Fuentes spouses for the costs of
the improvements or paying the increase in value which the property
may have acquired by reason of such improvements.
WHEREFORE, the Court DENIES the petition and AFFIRMS WITH
MODIFICATION the decision of the Court of Appeals in CA-G.R. CV
00531 dated February 27, 2007 as follows:
1. The deed of sale dated January 11, 1989 that Tarciano T. Roca
executed in favor of Manuel O. Fuentes, married to Leticia L. Fuentes,
as well as the Transfer Certificate of Title T-90,981 that the Register of
Deeds of Zamboanga City issued in the names of the latter spouses
pursuant to that deed of sale are DECLARED void;
2. The Register of Deeds of Zamboanga City is DIRECTED to reinstate
Transfer Certificate of Title 3533 in the name of Tarciano T. Roca,
married to Rosario Gabriel;
3. Respondents Gonzalo G. Roca, Annabelle R. Joson, Rose Marie R.
Cristobal, and Pilar Malcampo are ORDERED to pay petitioner spouses
Manuel and Leticia Fuentes the P200,000.00 that the latter paid
Tarciano T. Roca, with legal interest from January 11, 1989 until fully
paid, chargeable against his estate;
4. Respondents Gonzalo G. Roca, Annabelle R. Joson, Rose Marie R.
Cristobal, and Pilar Malcampo are further ORDERED, at their option, to
indemnify petitioner spouses Manuel and Leticia Fuentes with their
expenses for introducing useful improvements on the subject land or
pay the increase in value which it may have acquired by reason of
those improvements, with the spouses entitled to the right of retention
of the land until the indemnity is made; and

5. The RTC of Zamboanga City from which this case originated is


DIRECTED to receive evidence and determine the amount of indemnity
to which petitioner spouses Manuel and Leticia Fuentes are entitled.
SO ORDERED.
ROBERTO A. ABAD
Associate Justice
WE CONCUR:
REYNATO S. PUNO
Chief Justice
ANTONIO T. CARPIO
Associate Justice
RENATO C. CORONA
Associate Justice
CONCHITA CARPIO MORALES
Associate Justice
(On Leave)
PRESBITERO J. VELASCO, JR.
Associate Justice
ANTONIO EDUARDO B. NACHURA
Associate Justice
TERESITA J. LEONARDO-DE CASTRO
Associate Justice
ARTURO D. BRION
Associate Justice
DIOSDADO M. PERALTA
Associate Justice
LUCAS P. BERSAMIN
Associate Justice
MARIANO C. DEL CASTILLO
Associate Justice
MARTIN S. VILLARAMA, JR.
Associate Justice
JOSE PORTUGAL PEREZ
Associate Justice
JOSE CATRAL MENDOZA
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, it is hereby
certified that the conclusions in the above Decision had been reached
in consultation before the case was assigned to the writer of the
opinion of the Court.
REYNATO S. PUNO
Chief Justice

G.R. No. 166496

November 9, 2006

JOSEFA BAUTISTA FERRER, Petitioner,


vs.
SPS. MANUEL M. FERRER & VIRGINIA FERRER and SPS. ISMAEL M.
FERRER and FLORA FERRER, Respondents.
DECISION
CHICO-NAZARIO, J.:
Before this Court is an Appeal by Certiorari which assails the Decision1
of the Court of Appeals dated 16 August 2004 in CA-G.R. SP No. 78525,
reversing and setting aside the Order2 dated 16 December 2002 of the
Regional Trial Court (RTC), Mandaluyong City, Branch 212 in Civil Case
No. MC02-1780. The Court of Appeals ordered the dismissal of the
Complaint3 filed by petitioner Josefa Bautista Ferrer against

respondents Sps. Manuel M. Ferrer and Virginia Ferrer, and Sps. Ismael
M. Ferrer and Flora Ferrer in the aforesaid Civil Case No. MC02-1780.

amounting to lack or excess of jurisdiction on the RTC in denying the


dismissal.

In her Complaint for payment of conjugal improvements, sum of


money, and accounting with prayer for injunction and damages,
petitioner alleged that she is the widow of Alfredo Ferrer (Alfredo), a
half-brother of respondents Manuel M. Ferrer (Manuel) and Ismael M.
Ferrer (Ismael). Before her marriage to Alfredo, the latter acquired a
piece of lot, covered by Transfer Certificate of Title (TCT) No. 67927.4
He applied for a loan with the Social Security System (SSS) to build
improvements thereon, including a residential house and a two-door
apartment building. However, it was during their marriage that
payment of the loan was made using the couples conjugal funds. From
their conjugal funds, petitioner posited, they constructed a warehouse
on the lot. Moreover, petitioner averred that respondent Manuel
occupied one door of the apartment building, as well as the
warehouse; however, in September 1991, he stopped paying rentals
thereon, alleging that he had acquired ownership over the property by
virtue of a Deed of Sale executed by Alfredo in favor of respondents,
Manuel and Ismael and their spouses. TCT No. 67927 was cancelled,
and TCT. No. 2728 was issued and registered in the names of
respondents.

On 16 August 2004, the Court of Appeals rendered a Decision granting


the Petition. It held that petitioners Complaint failed to state a cause
of action. The appellate court rationalized as follows:

It is petitioners contention that on 2 October 1989, when her husband


was already bedridden, respondents Ismael and Flora Ferrer made him
sign a document, purported to be his last will and testament. The
document, however, was a Deed of Sale covering Alfredos lot and the
improvements thereon. Learning of this development, Alfredo filed with
the RTC of Pasig, a Complaint for Annulment of the said sale against
respondents, docketed as Civil Case No. 61327.5 On 22 June 1993, the
RTC dismissed the same.6 The RTC found that the terms and conditions
of the Deed of Sale are not contrary to law, morals, good customs, and
public policy, and should be complied with by the parties in good faith,
there being no compelling reason
under the law to do otherwise. The dismissal was affirmed by the Court
of Appeals. Subsequently, on 7 November 1994, this Court, in G.R. No.
L-117067, finding no reversible error committed by the appellate court
in affirming the dismissal of the RTC, affirmed the Decision of the Court
of Appeals.7
Further, in support of her Complaint, petitioner alluded to a portion of
the Decision dated 22 June 1993 of the RTC in Civil Case No. 61327,
which stated, to wit:
In determining which property is the principal and which is the
accessory, the property of greater value shall be considered the
principal. In this case, the lot is the principal and the improvements the
accessories. Since Article 120 of the Family Code provides the rule that
the ownership of accessory follows the ownership of the principal, then
the subject lot with all its improvements became an exclusive and
capital property of Alfredo with an obligation to reimburse the conjugal
partnership of the cost of improvements at the time of liquidation of
[the] conjugal partnership. Clearly, Alfredo has all the rights to sell the
subject property by himself without need of Josefas consent.8
According to petitioner, the ruling of the RTC shows that, when Alfredo
died on 29 September 1999, or at the time of the liquidation of the
conjugal partnership, she had the right to be reimbursed for the cost of
the improvements on Alfredos lot. She alleged that the cost of the
improvements amounted to P500,000.00; hence, one-half thereof
should be reimbursed and paid by respondents as they are now the
registered owners of Alfredos lot. She averred that respondents cannot
claim lack of knowledge about the fact that the improvements were
constructed using conjugal funds as they had occupied one of the
apartment buildings on Alfredos lot, and even paid rentals to
petitioner. In addition, petitioner prayed that respondents be ordered
to render an accounting from September, 1991, on the income of the
boarding house constructed thereon which they had appropriated for
themselves, and to remit one-half thereof as her share. Finally,
petitioner sought from respondents moral and exemplary damages,
litigation and incidental expenses.
For their part, respondents filed a Motion to Dismiss,9 contending that
petitioner had no cause of action against them, and that the cause of
action was barred by prior judgment.
On 16 December 2002, the RTC rendered an Order,10 denying the
Motion to Dismiss. According to the RTC, no pronouncement as to the
improvements constructed on Alfredos lot has been made in Civil Case
No. 61327, and the payment of petitioners share in the conjugal
partnership constitutes a separate cause of action. A subsequent
Order11 dated 17 January 2003 was issued by the RTC, denying
respondents Motion for Reconsideration.
Aggrieved, respondents elevated the case to the Court of Appeals by
way of a Petition for Certiorari, alleging grave abuse of discretion

[W]e believe that the instant complaint is not the proper action for the
respondent to enforce her right of reimbursement of the cost of the
improvement[s] on the subject property. As correctly pointed out by
the petitioners, the same should be made and directed in the
settlement of estate of her deceased husband Alfredo Ferrer pursuant
to Article 12912 of the Family Code. Such being the case, it appears
that the complaint herein fails to state a cause of action against the
petitioners, the latter not being the proper parties against whom the
subject action for reimbursement must be directed to. A complaint
states a cause of action where it contains three essential elements of a
cause of action, namely: (1) the legal right of the plaintiff; (2) the
correlative obligation of the defendant, and (3) the act or omission of
the defendant in violation of said legal right. If these elements are
absent, the complaint becomes vulnerable to a motion to dismiss on
the ground of failure to state a cause of action. Albeit the respondent
herein has the legal right to be reimbursed of the cost of the
improvements of the subject property, it is not the petitioners but the
estate of her deceased husband which has the obligation to pay the
same. The complaint herein is therefore dismissible for failure to state
a cause of action against the petitioners. Needless to say, the
respondent is not without any further recourse as she may file her
claim against the estate of her deceased husband.
In light of the foregoing, we find that the public respondent committed
grave abuse of discretion in denying the petitioners motion to dismiss
for failure to state a cause of action.13
Aggrieved, petitioner filed a Motion for Reconsideration thereon.
However, on 17 December 2004, the Court of Appeals rendered a
Resolution14 denying the motion.
Hence, the present recourse.
Petitioner submits the following grounds for the allowance of the
instant Petition, to wit:
A. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT
PETITIONERS COMPLAINT FAILS TO STATE A CAUSE OF ACTION
AGAINST THE RESPONDENTS, THE LATTER NOT BEING THE PROPER
PARTIES AGAINST WHOM THE SUBJECT ACTION FOR REIMBURSEMENT
MUST BE DIRECTED TO.
B. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE
PUBLIC RESPONDENT, HON. RIZALINA T. CAPCO-UMALI, COMMITTED
GRAVE ABUSE OF DISCRETION IN DENYING THE [RESPONDENTS]
MOTION TO DISMISS FOR FAILURE TO STATE A CAUSE OF ACTION.15
Both arguments raise the sole issue of whether the Court of Appeals
erred in dismissing petitioners Complaint for failure to state a cause of
action.
Section 1(g) Rule 1616 of the 1997 Rules of Civil Procedure makes it
clear that failure to make a sufficient allegation of a cause of action in
the complaint warrants the dismissal thereof. Section 2, Rule 2 of the
1997 Rules of Civil Procedure defines a cause of action as the act or
omission by which a party violates the right of another. It is the delict
or the wrongful act or omission committed by the defendant in
violation of the primary right of the plaintiff.17
A cause of action has the following essential elements, viz:
(1) A right in favor of the plaintiff by whatever means and under
whatever law it arises or is created;
(2) An obligation on the part of the named defendant to respect or not
to violate such right; and
(3) Act or omission on the part of such defendant in violation of the
right of the plaintiff or constituting a breach of the obligation of the
defendant to the plaintiff for which the latter may maintain an action
for recovery of damages or other appropriate relief.18
A complaint states a cause of action only when it has the three
indispensable elements.19
In the determination of the presence of these elements, inquiry is
confined to the four corners of the complaint. Only the statements in
the Complaint may be properly considered.20 The absence of any of
these elements makes a complaint vulnerable to a Motion to Dismiss
on the ground of a failure to state a cause of action.21

After a reading of the allegations contained in petitioners Complaint,


we are convinced that the same failed to state a cause of action.
In the case at bar, petitioner asserts a legal right in her favor by relying
on the Decision of the RTC in Civil Case No. 61327. It can be recalled
that the aforesaid case is an action for Annulment filed by Alfredo and
petitioner against the respondents to seek annulment of the Deed of
Sale, executed by Alfredo in respondents favor and covering the
herein subject premises. The Complaint was dismissed by the RTC, and
subsequently affirmed by the Court of Appeals and by this Court in G.R.
No. L-117067.
According to petitioner, while the RTC in Civil Case No. 61327
recognized that the improvements constructed on Alfredos lots were
deemed as Alfredos exclusive and capital property, the court also held
that petitioner, as Alfredos spouse, has the right to claim
reimbursement from the estate of Alfredo. It is argued by petitioner
that her husband had no other property, and his only property had
been sold to the respondents; hence, she has the legal right to claim
for reimbursement from the respondents who are now the owners of
the lot and the improvements thereon. In fine, petitioner asseverates
that the Complaint cannot be dismissed on the ground of failure to
state a cause of action because the respondents have the correlative
obligation to pay the value of the improvements.
Petitioner was not able to show that there is an obligation on the part
of the respondents to respect or not to violate her right. While we could
concede that Civil Case No. 61327 made a reference to the right of the
spouse as contemplated in Article 12022 of the Family Code to be
reimbursed for the cost of the improvements, the obligation to
reimburse rests on the spouse upon whom ownership of the entire
property is vested. There is no obligation on the part of the purchaser
of the property, in case the property is sold by the owner-spouse.
Indeed, Article 120 provides the solution in determining the ownership
of the improvements that are made on the separate property of the
spouses at the expense of the partnership or through the acts or
efforts of either or both spouses. Thus, when the cost of the
improvement and any resulting increase in value are more than the
value of the property at the time of the improvement, the entire
property of one of the spouses shall belong to the conjugal partnership,
subject to reimbursement of the value of the property of the ownerspouse at the time of the improvement; otherwise, said property shall
be retained in ownership by the owner-spouse, likewise subject to
reimbursement of the cost of the improvement. The subject property
was precisely declared as the exclusive property of Alfredo on the basis
of Article 120 of the Family Code.
What is incontrovertible is that the respondents, despite the allegations
contained in the Complaint that they are the buyers of the subject
premises, are not petitioners spouse nor can they ever be deemed as
the owner-spouse upon whom the obligation to reimburse petitioner for
her costs rested. It is the owner-spouse who has the obligation to
reimburse the conjugal partnership or the spouse who expended the
acts or efforts, as the case may be. Otherwise stated, respondents do
not have the obligation to respect petitioners right to be reimbursed.
On this matter, we do not find an act or omission on the part of
respondents in violation of petitioners rights. The right of the
respondents to acquire as buyers the subject premises from Alfredo
under the assailed Deed of Sale in Civil Case No. 61327 had been laid
to rest. This is because the validity of the Deed of Sale had already
been determined and upheld with finality. The same had been similarly
admitted by petitioner in her Complaint. It can be said, thus, that
respondents act of acquiring the subject property by sale was not in
violation of petitioners rights. The same can also be said of the
respondents objection to reimburse petitioner. Simply, no correlative
obligation exists on the part of the respondents to reimburse the
petitioner. Corollary thereto, neither can it be said that their refusal to
reimburse constituted a violation of petitioners rights. As has been
shown in the foregoing, no obligation by the respondents under the law
exists. Petitioners Complaint failed to state a cause of action against
the respondents, and for this reason, the Court of Appeals was not in
error in dismissing the same.
WHEREFORE, the Petition is DENIED. The Decision dated 16 August
2004 and the Resolution dated 17 December 2004 of the Court of
Appeals in CA G.R. SP. No. 78525 are AFFIRMED. Costs de oficio.
SO ORDERED.
MINITA V. CHICO-NAZARIO
Associate Justice
WE CONCUR:
ARTEMIO V. PANGANIBAN
Chief Justice

Chairperson
CONSUELO YNARES-SANTIAGO
Associate Justice
MA. ALICIA AUSTRIA-MARTINEZ
Associate Justice
ROMEO J. CALLEJO, SR.
Associate Justice
CERTIFICATION
Pursuant to Article VIII, Section 13 of the Constitution, it is hereby
certified that the conclusions in the above Decision were reached in
consultation before the case was assigned to the writer of the opinion
of the Courts Division.
ARTEMIO V. PANGANIBAN
Chief Justice

G.R. No. 149615 August 29, 2006


IN RE: PETITION FOR SEPARATION OF PROPERTY ELENA
BUENAVENTURA MULLER, Petitioner,
vs.
HELMUT MULLER, Respondent.
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari 1 assails the February 26, 2001
Decision 2 of the Court of Appeals in CA-G.R. CV No. 59321 affirming
with modification the August 12, 1996 Decision 3 of the Regional Trial
Court of Quezon City, Branch 86 in Civil Case No. Q-94-21862, which
terminated the regime of absolute community of property between
petitioner and respondent, as well as the Resolution 4 dated August 13,
2001 denying the motion for reconsideration.
The facts are as follows:
Petitioner Elena Buenaventura Muller and respondent Helmut Muller
were married in Hamburg, Germany on September 22, 1989. The
couple resided in Germany at a house owned by respondents parents
but decided to move and reside permanently in the Philippines in 1992.
By this time, respondent had inherited the house in Germany from his
parents which he sold and used the proceeds for the purchase of a
parcel of land in Antipolo, Rizal at the cost of P528,000.00 and the
construction of a house amounting to P2,300,000.00. The Antipolo
property was registered in the name of petitioner under Transfer
Certificate of Title No. 219438 5 of the Register of Deeds of Marikina,
Metro Manila.
Due to incompatibilities and respondents alleged womanizing,
drinking, and maltreatment, the spouses eventually separated. On
September 26, 1994, respondent filed a petition 6 for separation of
properties before the Regional Trial Court of Quezon City.
On August 12, 1996, the trial court rendered a decision which
terminated the regime of absolute community of property between the
petitioner and respondent. It also decreed the separation of properties
between them and ordered the equal partition of personal properties
located within the country, excluding those acquired by gratuitous title
during the marriage. With regard to the Antipolo property, the court
held that it was acquired using paraphernal funds of the respondent.
However, it ruled that respondent cannot recover his funds because
the property was purchased in violation of Section 7, Article XII of the
Constitution. Thus
However, pursuant to Article 92 of the Family Code, properties
acquired by gratuitous title by either spouse during the marriage shall
be excluded from the community property. The real property, therefore,
inherited by petitioner in Germany is excluded from the absolute
community of property of the herein spouses. Necessarily, the
proceeds of the sale of said real property as well as the personal
properties purchased thereby, belong exclusively to the petitioner.
However, the part of that inheritance used by the petitioner for
acquiring the house and lot in this country cannot be recovered by the
petitioner, its acquisition being a violation of Section 7, Article XII of
the Constitution which provides that "save in cases of hereditary
succession, no private lands shall be transferred or conveyed except to
individuals, corporations or associations qualified to acquire or hold
lands of the public domain." The law will leave the parties in the
situation where they are in without prejudice to a voluntary partition by
the parties of the said real property. x x x
xxxx
As regards the property covered by Transfer Certificate of Title No.
219438 of the Registry of Deeds of Marikina, Metro Manila, situated in
Antipolo, Rizal and the improvements thereon, the Court shall not
make any pronouncement on constitutional grounds. 7
Respondent appealed to the Court of Appeals which rendered the
assailed decision modifying the trial courts Decision. It held that
respondent merely prayed for reimbursement for the purchase of the
Antipolo property, and not acquisition or transfer of ownership to him.
It also considered petitioners ownership over the property in trust for
the respondent. As regards the house, the Court of Appeals ruled that
there is nothing in the Constitution which prohibits respondent from
acquiring the same. The dispositive portion of the assailed decision
reads:

WHEREFORE, in view of the foregoing, the Decision of the lower court


dated August 12, 1996 is hereby MODIFIED. Respondent Elena
Buenaventura Muller is hereby ordered to REIMBURSE the petitioner
the amount of P528,000.00 for the acquisition of the land and the
amount of P2,300,000.00 for the construction of the house situated in
Atnipolo, Rizal, deducting therefrom the amount respondent spent for
the preservation, maintenance and development of the aforesaid real
property including the depreciation cost of the house or in the
alternative to SELL the house and lot in the event respondent does not
have the means to reimburse the petitioner out of her own money and
from the proceeds thereof, reimburse the petitioner of the cost of the
land and the house deducting the expenses for its maintenance and
preservation spent by the respondent. Should there be profit, the same
shall be divided in proportion to the equity each has over the property.
The case is REMANDED to the lower court for reception of evidence as
to the amount claimed by the respondents for the preservation and
maintenance of the property.
SO ORDERED. 8
Hence, the instant petition for review raising the following issues:
I
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING
THAT THE RESPONDENT HEREIN IS ENTITLED TO REIMBURSEMENT OF
THE AMOUNT USED TO PURCHASE THE LAND AS WELL AS THE COSTS
FOR THE CONSTRUCTION OF THE HOUSE, FOR IN SO RULING, IT
INDIRECTLY ALLOWED AN ACT DONE WHICH OTHERWISE COULD NOT
BE DIRECTLY x x x DONE, WITHOUT DOING VIOLENCE TO THE
CONSTITUTIONAL PROSCRIPTION THAT AN ALIEN IS PROHIBITED FROM
ACQUIRING OWNERSHIP OF REAL PROPERTIES LOCATED IN THE
PHILIPPINES.
II
THE COURT OF APPEALS GRAVELY ERRED IN SUSTAINING
RESPONDENTS CAUSE OF ACTION WHICH IS ACTUALLY A DESPERATE
ATTEMPT TO OBTAIN OWNERSHIP OVER THE LOT IN QUESTION,
CLOTHED UNDER THE GUISE OF CLAIMING REIMBURSEMENT.
Petitioner contends that respondent, being an alien, is disqualified to
own private lands in the Philippines; that respondent was aware of the
constitutional prohibition but circumvented the same; and that
respondents purpose for filing an action for separation of property is to
obtain exclusive possession, control and disposition of the Antipolo
property.
Respondent claims that he is not praying for transfer of ownership of
the Antipolo property but merely reimbursement; that the funds paid
by him for the said property were in consideration of his marriage to
petitioner; that the funds were given to petitioner in trust; and that
equity demands that respondent should be reimbursed of his personal
funds.
The issue for resolution is whether respondent is entitled to
reimbursement of the funds used for the acquisition of the Antipolo
property.
The petition has merit.
Section 7, Article XII of the 1987 Constitution states:
Save in cases of hereditary succession, no private lands shall be
transferred or conveyed except to individuals, corporations, or
associations qualified to acquire or hold lands of the public domain.
Aliens, whether individuals or corporations, are disqualified from
acquiring lands of the public domain. Hence, they are also disqualified
from acquiring private lands. 9 The primary purpose of the
constitutional provision is the conservation of the national patrimony.
In the case of Krivenko v. Register of Deeds, 10 the Court held:
Under section 1 of Article XIII of the Constitution, "natural resources,
with the exception of public agricultural land, shall not be alienated,"
and with respect to public agricultural lands, their alienation is limited
to Filipino citizens. But this constitutional purpose conserving
agricultural resources in the hands of Filipino citizens may easily be
defeated by the Filipino citizens themselves who may alienate their
agricultural lands in favor of aliens. It is partly to prevent this result
that section 5 is included in Article XIII, and it reads as follows:
"Sec. 5. Save in cases of hereditary succession, no private agricultural
land will be transferred or assigned except to individuals, corporations,
or associations qualified to acquire or hold lands of the public domain
in the Philippines."

This constitutional provision closes the only remaining avenue through


which agricultural resources may leak into aliens hands. It would
certainly be futile to prohibit the alienation of public agricultural lands
to aliens if, after all, they may be freely so alienated upon their
becoming private agricultural lands in the hands of Filipino citizens. x x
x
xxxx
If the term "private agricultural lands" is to be construed as not
including residential lots or lands not strictly agricultural, the result
would be that "aliens may freely acquire and possess not only
residential lots and houses for themselves but entire subdivisions, and
whole towns and cities," and that "they may validly buy and hold in
their names lands of any area for building homes, factories, industrial
plants, fisheries, hatcheries, schools, health and vacation resorts,
markets, golf courses, playgrounds, airfields, and a host of other uses
and purposes that are not, in appellants words, strictly agricultural."
(Solicitor Generals Brief, p. 6.) That this is obnoxious to the
conservative spirit of the Constitution is beyond question.

wife any share of the money used for the purchase or charge her with
unauthorized disposition or expenditure of conjugal funds is not now
inquired into; that would be, in the premises, a purely academic
exercise. (Emphasis added)
WHEREFORE, in view of the foregoing, the instant petition is GRANTED.
The Decision dated February 26, 2001 of the Court of Appeals in CAG.R. CV No. 59321 ordering petitioner Elena Buenaventura Muller to
reimburse respondent Helmut Muller the amount of P528,000 for the
acquisition of the land and the amount of P2,300,000 for the
construction of the house in Antipolo City, and the Resolution dated
August 13, 2001 denying reconsideration thereof, are REVERSED and
SET ASIDE. The August 12, 1996 Decision of the Regional Trial Court of
Quezon City, Branch 86 in Civil Case No. Q-94-21862 terminating the
regime of absolute community between the petitioner and respondent,
decreeing a separation of property between them and ordering the
partition of the personal properties located in the Philippines equally, is
REINSTATED.
SO ORDERED.

Respondent was aware of the constitutional prohibition and expressly


admitted his knowledge thereof to this Court. 11 He declared that he
had the Antipolo property titled in the name of petitioner because of
the said prohibition. 12 His attempt at subsequently asserting or
claiming a right on the said property cannot be sustained.

CONSUELO YNARES-SANTIAGO

The Court of Appeals erred in holding that an implied trust was created
and resulted by operation of law in view of petitioners marriage to
respondent. Save for the exception provided in cases of hereditary
succession, respondents disqualification from owning lands in the
Philippines is absolute. Not even an ownership in trust is allowed.
Besides, where the purchase is made in violation of an existing statute
and in evasion of its express provision, no trust can result in favor of
the party who is guilty of the fraud. 13 To hold otherwise would allow
circumvention of the constitutional prohibition.

ARTEMIO V. PANGANIBAN

Invoking the principle that a court is not only a court of law but also a
court of equity, is likewise misplaced. It has been held that equity as a
rule will follow the law and will not permit that to be done indirectly
which, because of public policy, cannot be done directly. 14 He who
seeks equity must do equity, and he who comes into equity must come
with clean hands. The latter is a frequently stated maxim which is also
expressed in the principle that he who has done inequity shall not have
equity. It signifies that a litigant may be denied relief by a court of
equity on the ground that his conduct has been inequitable, unfair and
dishonest, or fraudulent, or deceitful as to the controversy in issue. 15
Thus, in the instant case, respondent cannot seek reimbursement on
the ground of equity where it is clear that he willingly and knowingly
bought the property despite the constitutional prohibition.
Further, the distinction made between transfer of ownership as
opposed to recovery of funds is a futile exercise on respondents part.
To allow reimbursement would in effect permit respondent to enjoy the
fruits of a property which he is not allowed to own. Thus, it is likewise
proscribed by law. As expressly held in Cheesman v. Intermediate
Appellate Court: 16
Finally, the fundamental law prohibits the sale to aliens of residential
land. Section 14, Article XIV of the 1973 Constitution ordains that,
"Save in cases of hereditary succession, no private land shall be
transferred or conveyed except to individuals, corporations, or
associations qualified to acquire or hold lands of the public domain."
Petitioner Thomas Cheesman was, of course, charged with knowledge
of this prohibition. Thus, assuming that it was his intention that the lot
in question be purchased by him and his wife, he acquired no right
whatever over the property by virtue of that purchase; and in
attempting to acquire a right or interest in land, vicariously and
clandestinely, he knowingly violated the Constitution; the sale as to
him was null and void. In any event, he had and has no capacity or
personality to question the subsequent sale of the same property by
his wife on the theory that in so doing he is merely exercising the
prerogative of a husband in respect of conjugal property. To sustain
such a theory would permit indirect controversion of the constitutional
prohibition. If the property were to be declared conjugal, this would
accord to the alien husband a not insubstantial interest and right over
land, as he would then have a decisive vote as to its transfer or
disposition. This is a right that the Constitution does not permit him to
have.
As already observed, the finding that his wife had used her own money
to purchase the property cannot, and will not, at this stage of the
proceedings be reviewed and overturned. But even if it were a fact that
said wife had used conjugal funds to make the acquisition, the
considerations just set out to militate, on high constitutional grounds,
against his recovering and holding the property so acquired, or any
part thereof. And whether in such an event, he may recover from his

Associate Justice
WE CONCUR:

Chief Justice
Chairperson
MA. ALICIA AUSTRIA-MARTINEZ, ROMEO J. CALLEJO, SR.
Associate Justice Associate Justice
MINITA V. CHICO-NAZARIO
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, it is hereby
certified that the conclusions in the above Decision were reached in
consultation before the case was assigned to the writer of the opinion
of the Courts Division.
ARTEMIO V. PANGANIBAN
Chief Justice

be paid the sum of P50,000.00 as his share in the stocks of the store in
full settlement thereof.
The plaintiff shall be allowed to occupy the bodega until the time the
owner of the lot on which it stands shall construct a building thereon;
c. The motorcycles shall be divided between them such that the
Kawasaki shall be owned by the plaintiff while the Honda Dream shall
be for the defendant;
d. The passenger jeep shall be for the plaintiff who shall pay the
defendant the sum of P75,000.00 as his share thereon and in full
settlement thereof;
e. The house and lot shall be to the common child.
2. This settlement is only partial, i.e., without prejudice to the litigation
of other conjugal properties that have not been mentioned;
xxxx
The said Compromise Agreement was given judicial imprimatur by the
respondent judge in the assailed Judgment On Compromise
Agreement, which was erroneously dated January 2, 2002.2
However, petitioner filed an Omnibus Motion dated January 15, 2002,
praying for the repudiation of the Compromise Agreement and the
reconsideration of the Judgment on Compromise Agreement by the
respondent judge on the grounds that his previous lawyer did not
intelligently and judiciously apprise him of the consequential effects of
the Compromise Agreement.
G.R. NO. 155409

June 8, 2007

VIRGILIO MAQUILAN, petitioner,


vs.
DITA MAQUILAN, respondent.
DECISION
AUSTRIA-MARTINEZ, J.:
Before the Court is a Petition for Review on Certiorari under Rule 45 of
the Rules of Court assailing the Decision1 dated August 30, 2002
promulgated by the Court of Appeals (CA) in CA-G.R. SP No. 69689,
which affirmed the Judgment on Compromise Agreement dated January
2, 2002 of the Regional Trial Court (RTC), Branch 3, Nabunturan,
Compostela Valley, and the RTC Orders dated January 21, 2002 and
February 7, 2002 (ORDERS) in Civil Case No. 656.
The facts of the case, as found by the CA, are as follows:
Herein petitioner and herein private respondent are spouses who once
had a blissful married life and out of which were blessed to have a son.
However, their once sugar coated romance turned bitter when
petitioner discovered that private respondent was having illicit sexual
affair with her paramour, which thus, prompted the petitioner to file a
case of adultery against private respondent and the latters paramour.
Consequently, both the private respondent and her paramour were
convicted of the crime charged and were sentenced to suffer an
imprisonment ranging from one (1) year, eight (8) months, minimum of
prision correccional as minimum penalty, to three (3) years, six (6)
months and twenty one (21) days, medium of prision correccional as
maximum penalty.
Thereafter, private respondent, through counsel, filed a Petition for
Declaration of Nullity of Marriage, Dissolution and Liquidation of
Conjugal Partnership of Gains and Damages on June 15, 2001 with the
Regional Trial Court, Branch 3 of Nabunturan, Compostela Valley,
docketed as Civil Case No. 656, imputing psychological incapacity on
the part of the petitioner.
During the pre-trial of the said case, petitioner and private respondent
entered into a COMPROMISE AGREEMENT in the following terms, to wit:
1. In partial settlement of the conjugal partnership of gains, the parties
agree to the following:
a. P500,000.00 of the money deposited in the bank jointly in the name
of the spouses shall be withdrawn and deposited in favor and in trust
of their common child, Neil Maquilan, with the deposit in the joint
account of the parties.
The balance of such deposit, which presently stands at P1,318,043.36,
shall be withdrawn and divided equally by the parties;
b. The store that is now being occupied by the plaintiff shall be allotted
to her while the bodega shall be for the defendant. The defendant shall

The respondent Judge in the assailed Order dated January 21, 2002,
denied the aforementioned Omnibus Motion.
Displeased, petitioner filed a Motion for Reconsideration of the
aforesaid Order, but the same was denied in the assailed Order dated
February 7, 2002.3 (Emphasis supplied)
The petitioner filed a Petition for Certiorari and Prohibition with the CA
under Rule 65 of the Rules of Court claiming that the RTC committed
grave error and abuse of discretion amounting to lack or excess of
jurisdiction (1) in upholding the validity of the Compromise Agreement
dated January 11, 2002; (2) when it held in its Order dated February 7,
2002 that the Compromise Agreement was made within the cooling-off
period; (3) when it denied petitioners Motion to Repudiate
Compromise Agreement and to Reconsider Its Judgment on
Compromise Agreement; and (4) when it conducted the proceedings
without the appearance and participation of the Office of the Solicitor
General and/or the Provincial Prosecutor.4
On August 30, 2002, the CA dismissed the Petition for lack of merit.
The CA held that the conviction of the respondent of the crime of
adultery does not ipso facto disqualify her from sharing in the conjugal
property, especially considering that she had only been sentenced with
the penalty of prision correccional, a penalty that does not carry the
accessory penalty of civil interdiction which deprives the person of the
rights to manage her property and to dispose of such property inter
vivos; that Articles 43 and 63 of the Family Code, which pertain to the
effects of a nullified marriage and the effects of legal separation,
respectively, do not apply, considering, too, that the Petition for the
Declaration of the Nullity of Marriage filed by the respondent invoking
Article 36 of the Family Code has yet to be decided, and, hence, it is
premature to apply Articles 43 and 63 of the Family Code; that,
although adultery is a ground for legal separation, nonetheless, Article
63 finds no application in the instant case since no petition to that
effect was filed by the petitioner against the respondent; that the
spouses voluntarily separated their property through their Compromise
Agreement with court approval under Article 134 of the Family Code;
that the Compromise Agreement, which embodies the voluntary
separation of property, is valid and binding in all respects because it
had been voluntarily entered into by the parties; that, furthermore,
even if it were true that the petitioner was not duly informed by his
previous counsel about the legal effects of the Compromise
Agreement, this point is untenable since the mistake or negligence of
the lawyer binds his client, unless such mistake or negligence amounts
to gross negligence or deprivation of due process on the part of his
client; that these exceptions are not present in the instant case; that
the Compromise Agreement was plainly worded and written in simple
language, which a person of ordinary intelligence can discern the
consequences thereof, hence, petitioners claim that his consent was
vitiated is highly incredible; that the Compromise Agreement was
made during the existence of the marriage of the parties since it was
submitted during the pendency of the petition for declaration of nullity
of marriage; that the application of Article 2035 of the Civil Code is
misplaced; that the cooling-off period under Article 58 of the Family
Code has no bearing on the validity of the Compromise Agreement;
that the Compromise Agreement is not contrary to law, morals, good

customs, public order, and public policy; that this agreement may not
be later disowned simply because of a change of mind; that the
presence of the Solicitor General or his deputy is not indispensable to
the execution and validity of the Compromise Agreement, since the
purpose of his presence is to curtail any collusion between the parties
and to see to it that evidence is not fabricated, and, with this in mind,
nothing in the Compromise Agreement touches on the very merits of
the case of declaration of nullity of marriage for the court to be wary of
any possible collusion; and, finally, that the Compromise Agreement is
merely an agreement between the parties to separate their conjugal
properties partially without prejudice to the outcome of the pending
case of declaration of nullity of marriage.
Hence, herein Petition, purely on questions of law, raising the following
issues:
I.
WHETHER OF NOT A SPOUSE CONVICTED OF EITHER CONCUBINAGE OR
ADULTERY, CAN STILL SHARE IN THE CONJUGAL PARTNERSHIP;
II
WHETHER OR NOT A COMPROMISE AGREEMENT ENTERED INTO BY
SPOUSES, ONE OF WHOM WAS CONVICTED OF ADULTERY, GIVING THE
CONVICTED SPOUSE A SHARE IN THE CONJUGAL PROPERTY, VALID AND
LEGAL;
III
WHETHER OR NOT A JUDGMENT FOR ANNULMENT AND LEGAL
SEPARATION IS A PRE-REQUISITE BEFORE A SPOUSE CONVICTED OF
EITHER CONCUBINAGE OR ADULTERY, BE DISQUALIFIED AND
PROHIBITED FROM SHARING IN THE CONJUGAL PROPERTY;
IV
WHETHER OR NOT THE DISQUALIFICATION OF A CONVICTED SPOUSE
OF ADULTERY FROM SHARING IN A CONJUGAL PROPERTY, CONSTITUTES
CIVIL INTERDICTION.5
The petitioner argues that the Compromise Agreement should not have
been given judicial imprimatur since it is against law and public policy;
that the proceedings where it was approved is null and void, there
being no appearance and participation of the Solicitor General or the
Provincial Prosecutor; that it was timely repudiated; and that the
respondent, having been convicted of adultery, is therefore disqualified
from sharing in the conjugal property.
The Petition must fail.
The essential question is whether the partial voluntary separation of
property made by the spouses pending the petition for declaration of
nullity of marriage is valid.
First. The petitioner contends that the Compromise Agreement is void
because it circumvents the law that prohibits the guilty spouse, who
was convicted of either adultery or concubinage, from sharing in the
conjugal property. Since the respondent was convicted of adultery, the
petitioner argues that her share should be forfeited in favor of the
common child under Articles 43(2)6 and 637 of the Family Code.
To the petitioner, it is the clear intention of the law to disqualify the
spouse convicted of adultery from sharing in the conjugal property;
and because the Compromise Agreement is void, it never became final
and executory.
Moreover, the petitioner cites Article 20358 of the Civil Code and
argues that since adultery is a ground for legal separation, the
Compromise Agreement is therefore void.
These arguments are specious. The foregoing provisions of the law are
inapplicable to the instant case.
Article 43 of the Family Code refers to Article 42, to wit:
Article 42. The subsequent marriage referred to in the preceding
Article9 shall be automatically terminated by the recording of the
affidavit of reappearance of the absent spouse, unless there is a
judgment annulling the previous marriage or declaring it void ab initio.
A sworn statement of the fact and circumstances of reappearance shall
be recorded in the civil registry of the residence of the parties to the
subsequent marriage at the instance of any interested person, with
due notice to the spouses of the subsequent marriage and without
prejudice to the fact of reappearance being judicially determined in
case such fact is disputed.

where a subsequent marriage is terminated because of the


reappearance of an absent spouse; while Article 63 applies to the
effects of a decree of legal separation. The present case involves a
proceeding where the nullity of the marriage is sought to be declared
under the ground of psychological capacity.
Article 2035 of the Civil Code is also clearly inapplicable. The
Compromise Agreement partially divided the properties of the conjugal
partnership of gains between the parties and does not deal with the
validity of a marriage or legal separation. It is not among those that are
expressly prohibited by Article 2035.
Moreover, the contention that the Compromise Agreement is
tantamount to a circumvention of the law prohibiting the guilty spouse
from sharing in the conjugal properties is misplaced. Existing law and
jurisprudence do not impose such disqualification.
Under Article 143 of the Family Code, separation of property may be
effected voluntarily or for sufficient cause, subject to judicial approval.
The questioned Compromise Agreement which was judicially approved
is exactly such a separation of property allowed under the law. This
conclusion holds true even if the proceedings for the declaration of
nullity of marriage was still pending. However, the Court must stress
that this voluntary separation of property is subject to the rights of all
creditors of the conjugal partnership of gains and other persons with
pecuniary interest pursuant to Article 136 of the Family Code.
Second. Petitioners claim that since the proceedings before the RTC
were void in the absence of the participation of the provincial
prosecutor or solicitor, the voluntary separation made during the
pendency of the case is also void. The proceedings pertaining to the
Compromise Agreement involved the conjugal properties of the
spouses. The settlement had no relation to the questions surrounding
the validity of their marriage. Nor did the settlement amount to a
collusion between the parties.
Article 48 of the Family Code states:
Art. 48. In all cases of annulment or declaration of absolute nullity of
marriage, the Court shall order the prosecuting attorney or fiscal
assigned to it to appear on behalf of the State to take steps to prevent
collusion between the parties and to take care that the evidence is not
fabricated or suppressed. (Emphasis supplied)
Section 3(e) of Rule 9 of the 1997 Rules of Court provides:
SEC. 3. Default; declaration of.- x x x x
xxxx
(e) Where no defaults allowed. If the defending party in action for
annulment or declaration of nullity of marriage or for legal separation
fails to answer, the court shall order the prosecuting attorney to
investigate whether or not a collusion between the parties exists if
there is no collusion, to intervene for the State in order to see to it that
the evidence submitted is not fabricated. (Emphasis supplied
Truly, the purpose of the active participation of the Public Prosecutor or
the Solicitor General is to ensure that the interest of the State is
represented and protected in proceedings for annulment and
declaration of nullity of marriages by preventing collusion between the
parties, or the fabrication or suppression of evidence.10 While the
appearances of the Solicitor General and/or the Public Prosecutor are
mandatory, the failure of the RTC to require their appearance does not
per se nullify the Compromise Agreement. This Court fully concurs with
the findings of the CA:
x x x. It bears emphasizing that the intendment of the law in requiring
the presence of the Solicitor General and/or State prosecutor in all
proceedings of legal separation and annulment or declaration of nullity
of marriage is to curtail or prevent any possibility of collusion between
the parties and to see to it that their evidence respecting the case is
not fabricated. In the instant case, there is no exigency for the
presence of the Solicitor General and/or the State prosecutor because
as already stated, nothing in the subject compromise agreement
touched into the very merits of the case of declaration of nullity of
marriage for the court to be wary of any possible collusion between the
parties. At the risk of being repetiti[ve], the compromise agreement
pertains merely to an agreement between the petitioner and the
private respondent to separate their conjugal properties partially
without prejudice to the outcome of the pending case of declaration of
nullity of marriage.11
Third. The conviction of adultery does not carry the accessory of civil
interdiction. Article 34 of the Revised Penal Code provides for the
consequences of civil interdiction:

Art. 34. Civil Interdiction. Civil interdiction shall deprive the offender
during the time of his sentence of the rights of parental authority, or
guardianship, either as to the person or property of any ward, of
marital authority, of the right to manage his property and of the right
to dispose of such property by any act or any conveyance inter vivos.
Under Article 333 of the same Code, the penalty for adultery is prision
correccional in its medium and maximum periods. Article 333 should
be read with Article 43 of the same Code. The latter provides:
Art. 43. Prision correccional Its accessory penalties. The penalty of
prision correccional shall carry with it that of suspension from public
office, from the right to follow a profession or calling, and that of
perpetual special disqualification from the right of suffrage, if the
duration of said imprisonment shall exceed eighteen months. The
offender shall suffer the disqualification provided in this article
although pardoned as to the principal penalty, unless the same shall
have been expressly remitted in the pardon.
It is clear, therefore, and as correctly held by the CA, that the crime of
adultery does not carry the accessory penalty of civil interdiction which
deprives the person of the rights to manage her property and to
dispose of such property inter vivos.
Fourth. Neither could it be said that the petitioner was not intelligently
and judiciously informed of the consequential effects of the
compromise agreement, and that, on this basis, he may repudiate the
Compromise Agreement. The argument of the petitioner that he was
not duly informed by his previous counsel about the legal effects of the
voluntary settlement is not convincing. Mistake or vitiation of consent,
as now claimed by the petitioner as his basis for repudiating the
settlement, could hardly be said to be evident. In Salonga v. Court of
Appeals,12 this Court held:
[I]t is well-settled that the negligence of counsel binds the client. This
is based on the rule that any act performed by a lawyer within the
scope of his general or implied authority is regarded as an act of his
client. Consequently, the mistake or negligence of petitioners' counsel
may result in the rendition of an unfavorable judgment against them.
Exceptions to the foregoing have been recognized by the Court in
cases where reckless or gross negligence of counsel deprives the client
of due process of law, or when its application "results in the outright
deprivation of one's property through a technicality." x x x x13
None of these exceptions has been sufficiently shown in the present
case.
WHEREFORE, the Petition is DENIED. The Decision of the Court of
Appeals is AFFIRMED with MODIFICATION that the subject Compromise
Agreement is VALID without prejudice to the rights of all creditors and
other persons with pecuniary interest in the properties of the conjugal
partnership of gains.

The Factual Antecedents


Petitioner, a Dutch National, and respondent, a Filipina, married in
March 29, 1980. After several years, the RTC of Negros Oriental, Branch
32, declared the nullity of their marriage in the Decision5 dated
November 10, 2000 on the basis of the formers psychological
incapacity as contemplated in Article 36 of the Family Code.
Consequently, petitioner filed a Petition for Dissolution of Conjugal
Partnership6 dated December 14, 2000 praying for the distribution of
the following described properties claimed to have been acquired
during the subsistence of their marriage, to wit:
By Purchase:
a. Lot 1, Block 3 of the consolidated survey of Lots 2144 & 2147 of the
Dumaguete Cadastre, covered by Transfer Certificate of Title (TCT) No.
22846, containing an area of 252 square meters (sq.m.), including a
residential house constructed thereon.
b. Lot 2142 of the Dumaguete Cadastre, covered by TCT No. 21974,
containing an area of 806 sq.m., including a residential house
constructed thereon.
c. Lot 5845 of the Dumaguete Cadastre, covered by TCT No. 21306,
containing an area of 756 sq.m.
d. Lot 4, Block 4 of the consolidated survey of Lots 2144 & 2147 of the
Dumaguete Cadastre, covered by TCT No. 21307, containing an area of
45 sq.m.
By way of inheritance:
e. 1/7 of Lot 2055-A of the Dumaguete Cadastre, covered by TCT No.
23567, containing an area of 2,635 sq.m. (the area that appertains to
the conjugal partnership is 376.45 sq.m.).
f. 1/15 of Lot 2055-I of the Dumaguete Cadastre, covered by TCT No.
23575, containing an area of 360 sq.m. (the area that appertains to the
conjugal partnership is 24 sq.m.).7
In defense,8 respondent averred that, with the exception of their two
(2) residential houses on Lots 1 and 2142, she and petitioner did not
acquire any conjugal properties during their marriage, the truth being
that she used her own personal money to purchase Lots 1, 2142, 5845
and 4 out of her personal funds and Lots 2055-A and 2055-I by way of
inheritance.9 She submitted a joint affidavit executed by her and
petitioner attesting to the fact that she purchased Lot 2142 and the
improvements thereon using her own money.10 Accordingly,
respondent sought the dismissal of the petition for dissolution as well
as payment for attorneys fees and litigation expenses.11
During trial, petitioner testified that while Lots 1, 2142, 5845 and 4
were registered in the name of respondent, these properties were
acquired with the money he received from the Dutch government as
his disability benefit12 since respondent did not have sufficient income
to pay for their acquisition. He also claimed that the joint affidavit they
submitted before the Register of Deeds of Dumaguete City was
contrary to Article 89 of the Family Code, hence, invalid.13
For her part, respondent maintained that the money used for the
purchase of the lots came exclusively from her personal funds, in
particular, her earnings from selling jewelry as well as products from
Avon, Triumph and Tupperware.14 She further asserted that after she
filed for annulment of their marriage in 1996, petitioner transferred to
their second house and brought along with him certain personal
properties, consisting of drills, a welding machine, grinders, clamps,
etc. She alleged that these tools and equipment have a total cost of
P500,000.00.15

G.R. No. 195670

December 3, 2012

WILLEM BEUMER, Petitioner,


vs.
AVELINA AMORES, Respondent.
DECISION
PERLAS-BERNABE, J.:
Before the Court is a Petition for Review on Certiorari1 under Rule 45 of
the Rules of CoLlli assailing the October 8, 2009 Decision2 and January
24, 2011 Resolution3 of the court of Appeals (CA) in CA-G.R. CV No.
01940, which affirmed the February 28, 2007 Decision4 of the Regional
Trial Court (RTC) of Negros Oriental, Branch 34 in Civil Case No. I 2884.
The foregoing rulings dissolved the conjugal partnership of gains of
Willem Beumer (petitioner) and Avelina Amores (respondent) and
distributed the properties forming part of the said property regime.

The RTC Ruling


On February 28, 2007, the RTC of Negros Oriental, Branch 34 rendered
its Decision, dissolving the parties conjugal partnership, awarding all
the parcels of land to respondent as her paraphernal properties; the
tools and equipment in favor of petitioner as his exclusive properties;
the two (2) houses standing on Lots 1 and 2142 as co-owned by the
parties, the dispositive of which reads:
WHEREFORE, judgment is hereby rendered granting the dissolution of
the conjugal partnership of gains between petitioner Willem Beumer
and respondent Avelina Amores considering the fact that their
marriage was previously annulled by Branch 32 of this Court. The
parcels of land covered by Transfer Certificate of Titles Nos. 22846,
21974, 21306, 21307, 23567 and 23575 are hereby declared
paraphernal properties of respondent Avelina Amores due to the fact
that while these real properties were acquired by onerous title during
their marital union, Willem Beumer, being a foreigner, is not allowed by

law to acquire any private land in the Philippines, except through


inheritance.
The personal properties, i.e., tools and equipment mentioned in the
complaint which were brought out by Willem from the conjugal
dwelling are hereby declared to be exclusively owned by the petitioner.
The two houses standing on the lots covered by Transfer Certificate of
Title Nos. 21974 and 22846 are hereby declared to be co-owned by the
petitioner and the respondent since these were acquired during their
marital union and since there is no prohibition on foreigners from
owning buildings and residential units. Petitioner and respondent are,
thereby, directed to subject this court for approval their project of
partition on the two houses aforementioned.
The Court finds no sufficient justification to award the counterclaim of
respondent for attorneys fees considering the well settled doctrine
that there should be no premium on the right to litigate. The prayer for
moral damages are likewise denied for lack of merit.
No pronouncement as to costs.
SO ORDERED.16
It ruled that, regardless of the source of funds for the acquisition of
Lots 1, 2142, 5845 and 4, petitioner could not have acquired any right
whatsoever over these properties as petitioner still attempted to
acquire them notwithstanding his knowledge of the constitutional
prohibition against foreign ownership of private lands.17 This was
made evident by the sworn statements petitioner executed purporting
to show that the subject parcels of land were purchased from the
exclusive funds of his wife, the herein respondent.18 Petitioners plea
for reimbursement for the amount he had paid to purchase the
foregoing properties on the basis of equity was likewise denied for not
having come to court with clean hands.
The CA Ruling
Petitioner elevated the matter to the CA, contesting only the RTCs
award of Lots 1, 2142, 5845 and 4 in favor of respondent. He insisted
that the money used to purchase the foregoing properties came from
his own capital funds and that they were registered in the name of his
former wife only because of the constitutional prohibition against
foreign ownership. Thus, he prayed for reimbursement of one-half (1/2)
of the value of what he had paid in the purchase of the said properties,
waiving the other half in favor of his estranged ex-wife.19
On October 8, 2009, the CA promulgated a Decision20 affirming in toto
the judgment rendered by the RTC of Negros Oriental, Branch 34. The
CA stressed the fact that petitioner was "well-aware of the
constitutional prohibition for aliens to acquire lands in the
Philippines."21 Hence, he cannot invoke equity to support his claim for
reimbursement.
Consequently, petitioner filed the instant Petition for Review on
Certiorari assailing the CA Decision due to the following error:
UNDER THE FACTS ESTABLISHED, THE COURT ERRED IN NOT
SUSTAINING THE PETITIONERS ATTEMPT AT SUBSEQUENTLY
ASSERTING OR CLAIMING A RIGHT OF HALF OR WHOLE OF THE
PURCHASE PRICE USED IN THE PURCHASE OF THE REAL PROPERTIES
SUBJECT OF THIS CASE.22 (Emphasis supplied)
The Ruling of the Court
The petition lacks merit.
The issue to be resolved is not of first impression. In In Re: Petition For
Separation of Property-Elena Buenaventura Muller v. Helmut Muller23
the Court had already denied a claim for reimbursement of the value of
purchased parcels of Philippine land instituted by a foreigner Helmut
Muller, against his former Filipina spouse, Elena Buenaventura Muller. It
held that Helmut Muller cannot seek reimbursement on the ground of
equity where it is clear that he willingly and knowingly bought the
property despite the prohibition against foreign ownership of Philippine
land24 enshrined under Section 7, Article XII of the 1987 Philippine
Constitution which reads:
Section 7. Save in cases of hereditary succession, no private lands
shall be transferred or conveyed except to individuals, corporations, or
associations qualified to acquire or hold lands of the public domain.
Undeniably, petitioner openly admitted that he "is well aware of the
above-cited constitutional prohibition"25 and even asseverated that,
because of such prohibition, he and respondent registered the subject
properties in the latters name.26 Clearly, petitioners actuations
showed his palpable intent to skirt the constitutional prohibition. On
the basis of such admission, the Court finds no reason why it should

not apply the Muller ruling and accordingly, deny petitioners claim for
reimbursement.
As also explained in Muller, the time-honored principle is that he who
seeks equity must do equity, and he who comes into equity must come
with clean hands. Conversely stated, he who has done inequity shall
not be accorded equity. Thus, a litigant may be denied relief by a court
of equity on the ground that his conduct has been inequitable, unfair
and dishonest, or fraudulent, or deceitful.27
In this case, petitioners statements regarding the real source of the
funds used to purchase the subject parcels of land dilute the veracity
of his claims: While admitting to have previously executed a joint
affidavit that respondents personal funds were used to purchase Lot
1,28 he likewise claimed that his personal disability funds were used to
acquire the same. Evidently, these inconsistencies show his
untruthfulness. Thus, as petitioner has come before the Court with
unclean hands, he is now precluded from seeking any equitable refuge.
In any event, the Court cannot, even on the grounds of equity, grant
reimbursement to petitioner given that he acquired no right
whatsoever over the subject properties by virtue of its unconstitutional
purchase. It is well-established that equity as a rule will follow the law
and will not permit that to be done indirectly which, because of public
policy, cannot be done directly.29 Surely, a contract that violates the
Constitution and the law is null and void, vests no rights, creates no
obligations and produces no legal effect at all.30 Corollary thereto,
under Article 1412 of the Civil Code,31 petitioner cannot have the
subject properties deeded to him or allow him to recover the money he
had spent for the purchase thereof. The law will not aid either party to
an illegal contract or agreement; it leaves the parties where it finds
them.32 Indeed, one cannot salvage any rights from an
unconstitutional transaction knowingly entered into.
Neither can the Court grant petitioners claim for reimbursement on
the basis of unjust enrichment.33 As held in Frenzel v. Catito, a case
also involving a foreigner seeking monetary reimbursement for money
spent on purchase of Philippine land, the provision on unjust
enrichment does not apply if the action is proscribed by the
Constitution, to wit:
Futile, too, is petitioner's reliance on Article 22 of the New Civil Code
which reads:
Art. 22. Every person who through an act of performance by another,
or any other means, acquires or comes into possession of something at
the expense of the latter without just or legal ground, shall return the
same to him.1wphi1
The provision is expressed in the maxim: "MEMO CUM ALTERIUS DETER
DETREMENTO PROTEST" (No person should unjustly enrich himself at
the expense of another). An action for recovery of what has been paid
without just cause has been designated as an accion in rem verso. This
provision does not apply if, as in this case, the action is proscribed by
the Constitution or by the application of the pari delicto doctrine. It
may be unfair and unjust to bar the petitioner from filing an accion in
rem verso over the subject properties, or from recovering the money
he paid for the said properties, but, as Lord Mansfield stated in the
early case of Holman v. Johnson: "The objection that a contract is
immoral or illegal as between the plaintiff and the defendant, sounds
at all times very ill in the mouth of the defendant. It is not for his sake,
however, that the objection is ever allowed; but it is founded in general
principles of policy, which the defendant has the advantage of,
contrary to the real justice, as between him and the plaintiff."34
(Citations omitted)
Nor would the denial of his claim amount to an injustice based on his
foreign citizenship.35 Precisely, it is the Constitution itself which
demarcates the rights of citizens and non-citizens in owning Philippine
land. To be sure, the constitutional ban against foreigners applies only
to ownership of Philippine land and not to the improvements built
thereon, such as the two (2) houses standing on Lots 1 and 2142 which
were properly declared to be co-owned by the parties subject to
partition. Needless to state, the purpose of the prohibition is to
conserve the national patrimony36 and it is this policy which the Court
is duty-bound to protect.
WHEREFORE, the petition is DENIED. Accordingly, the assailed October
8, 2009 Decision and January 24, 2011 Resolution of the Court of
Appeals in CA-G.R. CV No. 01940 are AFFIRMED.
SO ORDERED.
ESTELA M. PERLAS-BERNABE
Associate Justice
WE CONCUR:

ANTONIO T. CARPIO
Associate Justice
Chairperson
ARTURO D. BRION
Associate Justice
MARIANO C. DEL CASTILLO
Associate Justice
JOSE PORTUGAL PEREZ
Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion
of the Court's Division.
ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the Division
Chairperson's Attestation, I certify that the conclusions in the above
Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Court's Division.
MARIA LOURDES P. A. SERENO
Chief Justice

G.R. No. 122749

July 31, 1996

ANTONIO A. S. VALDEZ, petitioner,


vs.
REGIONAL TRIAL COURT, BRANCH 102, QUEZON CITY, and CONSUELO
M. GOMEZ-VALDEZ, respondents.

VITUG, J.:p
The petition for new bewails, purely on the question of law, an alleged
error committed by the Regional Trial Court in Civil Case No. Q-9212539. Petitioner avers that the court a quo has failed to apply the
correct law that should govern the disposition of a family dwelling in a
situation where a marriage is declared void ab initio because of
psychological incapacity on the part of either or both parties in the
contract.
The pertinent facts giving rise to this incident are, by large, not in
dispute.
Antonio Valdez and Consuelo Gomez were married on 05 January 1971.
Begotten during the marriage were five children. In a petition, dated 22
June 1992, Valdez sought the declaration of nullity of the marriage
pursuant to Article 36 of the Family code (docketed Civil Case No. Q92-12539, Regional Trial Court of Quezon City, Branch 102). After the
hearing the parties following the joinder of issues, the trial court, 1 in
its decision of 29 July 1994, granted the petition, viz:
WHEREFORE, judgment is hereby rendered as follows:
(1)
The marriage of petitioner Antonio Valdez and respondent
Consuelo Gomez-Valdez is hereby declared null and void under Article
36 of the Family Code on the ground of their mutual psychological
incapacity to comply with their essential marital obligations;
(2)
The three older children, Carlos Enrique III, Antonio Quintin
and Angela Rosario shall choose which parent they would want to stay
with.
Stella Eloisa and Joaquin Pedro shall be placed in the custody of their
mother, herein respondent Consuelo Gomez-Valdes.
The petitioner and respondent shall have visitation rights over the
children who are in the custody of the other.
(3)
The petitioner and the respondent are directed to start
proceedings on the liquidation of their common properties as defined
by Article 147 of the Family Code, and to comply with the provisions of
Articles 50, 51, and 52 of the same code, within thirty (30) days from
notice of this decision.
Let a copy of this decision be furnished the Local Civil Registrar of
Mandaluyong, Metro Manila, for proper recording in the registry of
marriages. 2 (Emphasis ours.)
Consuelo Gomez sought a clarification of that portion of the decision
directing compliance with Articles 50, 51 and 52 of the Family Code.
She asserted that the Family Code contained no provisions on the
procedure for the liquidation of common property in "unions without
marriage." Parenthetically, during the hearing of the motion, the
children filed a joint affidavit expressing their desire to remain with
their father, Antonio Valdez, herein petitioner.
In an order, dated 05 May 1995, the trial court made the following
clarification:
Consequently, considering that Article 147 of the Family Code explicitly
provides that the property acquired by both parties during their union,
in the absence of proof to the contrary, are presumed to have been
obtained through the joint efforts of the parties and will be owned by
them in equal shares, plaintiff and defendant will own their "family
home" and all their properties for that matter in equal shares.
In the liquidation and partition of properties owned in common by the
plaintiff and defendant, the provisions on ownership found in the Civil
Code shall apply. 3 (Emphasis supplied.)
In addressing specifically the issue regarding the disposition of the
family dwelling, the trial court said:

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

considered as having contributed thereto jointly if said party's "efforts


consisted in the care and maintenance of the family household." 8
Unlike the conjugal partnership of gains, the fruits of the couple's
separate property are not included in the co-ownership.

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

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

Petitioner moved for a reconsideration of the order. The motion was


denied on 30 October 1995.
In his recourse to this Court, petitioner submits that Articles 50, 51 and
52 of the Family Code should be held controlling: he argues that:
I
Article 147 of the Family Code does not apply to cases where the
parties are psychologically incapacitated.
II
Articles 50, 51 and 52 in relation to Articles 102 and 129 of the Family
Code govern the disposition of the family dwelling in cases where a
marriage is declared void ab initio, including a marriage declared void
by reason of the psychological incapacity of the spouses.
III
Assuming arguendo that Article 147 applies to marriages declared void
ab initio on the ground of the psychological incapacity of a spouse, the
same may be read consistently with Article 129.
IV
It is necessary to determine the parent with whom majority of the
children wish to stay. 5
The trial court correctly applied the law. In a void marriage, regardless
of the cause thereof, the property relations of the parties during the
period of cohabitation is governed by the provisions of Article 147 or
Article 148, such as the case may be, of the Family Code. Article 147 is
a remake of Article 144 of the Civil Code as interpreted and so applied
in previous cases; 6 it provides:
Art. 147. When a man and a woman who are capacitated to marry
each other, live exclusively with each other as husband and wife
without the benefit of marriage or under a void marriage, their wages
and salaries shall be owned by them in equal shares and the property
acquired by both of them through their work or industry shall be
governed by the rules on co-ownership.
In the absence of proof to the contrary, properties acquired while they
lived together shall be presumed to have been obtained by their joint
efforts, work or industry, and shall be owned by them in equal shares.
For purposes of this Article, a party who did not participate in the
acquisition by the other party of any property shall be deemed to have
contributed jointly in the acquisition thereof in the former's efforts
consisted in the care and maintenance of the family and of the
household.
Neither party can encumber or dispose by acts inter vivos of his or her
share in the property acquired during cohabitation and owned in
common, without the consent of the other, until after the termination
of their cohabitation.
When only one of the parties to a void marriage is in good faith, the
share of the party in bad faith in the ownership shall be forfeited in
favor of their common children. In case of default of or waiver by any
or all of the common children or their descendants, each vacant share
shall belong to the innocent party. In all cases, the forfeiture shall take
place upon the termination of the cohabitation.
This particular kind of co-ownership applies when a man and a woman,
suffering no illegal impediment to marry each other, so exclusively live
together as husband and wife under a void marriage or without the
benefit of marriage. The term "capacitated" in the provision (in the first
paragraph of the law) refers to the legal capacity of a party to contract
marriage, i.e., any "male or female of the age of eighteen years or
upwards not under any of the impediments mentioned in Articles 37
and 38" 7 of the Code.
Under this property regime, property acquired by both spouses through
their work and industry shall be governed by the rules on equal coownership. Any property acquired during the union is prima facie
presumed to have been obtained through their joint efforts. A party
who did not participate in the acquisition of the property shall be

(a)
Neither party can dispose or encumber by act intervivos his
or her share in co-ownership property, without consent of the other,
during the period of cohabitation; and
(b)
In the case of a void marriage, any party in bad faith shall
forfeit his or her share in the co-ownership in favor of their common
children; in default thereof or waiver by any or all of the common
children, each vacant share shall belong to the respective surviving
descendants, or still in default thereof, to the innocent party. The
forfeiture shall take place upon the termination of the cohabitation 9 or
declaration of nullity of the marriage. 10
When the common-law spouses suffer from a legal impediment to
marry or when they do not live exclusively with each other (as husband
and wife), only the property acquired by both of them through their
actual joint contribution of money, property or industry shall be owned
in common and in proportion to their respective contributions. Such
contributions and corresponding shares, however, are prima facie
presumed to be equal. The share of any party who is married to
another shall accrue to the absolute community or conjugal
partnership, as the case may be, if so existing under a valid marriage.
If the party who has acted in bad faith is not validly married to another,
his or her share shall be forfeited in the manner already heretofore
expressed. 11
In deciding to take further cognizance of the issue on the settlement of
the parties' common property, the trial court acted neither imprudently
nor precipitately; a court which has jurisdiction to declare the marriage
a nullity must be deemed likewise clothed in authority to resolve
incidental and consequential matters. Nor did it commit a reversible
error in ruling that petitioner and private respondent own the "family
home" and all their common property in equal shares, as well as in
concluding that, in the liquidation and partition of the property owned
in common by them, the provisions on co-ownership under the Civil
Code, not Articles 50, 51 and 52, in relation to Articles 102 and 129, 12
of the Family Code, should aptly prevail. The rules set up to govern the
liquidation of either the absolute community or the conjugal
partnership of gains, the property regimes recognized for valid and
voidable marriages (in the latter case until the contract is annulled),
are irrelevant to the liquidation of the co-ownership that exists
between common-law spouses. The first paragraph of Articles 50 of the
Family Code, applying paragraphs (2), (3), (4) and 95) of Article 43, 13
relates only, by its explicit terms, to voidable marriages and,
exceptionally, to void marriages under Article 40 14 of the Code, i.e.,
the declaration of nullity of a subsequent marriage contracted by a
spouse of a prior void marriage before the latter is judicially declared
void. The latter is a special rule that somehow recognizes the
philosophy and an old doctrine that void marriages are inexistent from
the very beginning and no judicial decree is necessary to establish
their nullity. In now requiring for purposes of remarriage, the
declaration of nullity by final judgment of the previously contracted
void marriage, the present law aims to do away with any continuing
uncertainty on the status of the second marriage. It is not then illogical
for the provisions of Article 43, in relation to Articles 41 15 and 42, 16
of the Family Code, on the effects of the termination of a subsequent
marriage contracted during the subsistence of a previous marriage to
be made applicable pro hac vice. In all other cases, it is not to be
assumed that the law has also meant to have coincident property
relations, on the one hand, between spouses in valid and voidable
marriages (before annulment) and, on the other, between common-law
spouses or spouses of void marriages, leaving to ordain, on the latter
case, the ordinary rules on co-ownership subject to the provisions of
the Family Code on the "family home," i.e., the provisions found in Title
V, Chapter 2, of the Family Code, remain in force and effect regardless
of the property regime of the spouses.
WHEREFORE, the questioned orders, dated 05 May 1995 and 30
October 1995, of the trial court are AFFIRMED. No costs.
Padilla, Kapunan and Hermosisima, Jr., JJ., concur.
Bellosillo, J., is on leave.

G.R. No. 50837

December 28, 1992

NARCISO BUENAVENTURA and MARIA BUENAVENTURA, Petitioners,


vs.
HON. COURT OF APPEALS and MANOTOK REALTY, INC. Respondents.

MELO, J.:
Before Us is a petition for review on certiorari of a Decision of the
Special Former Ninth Division of the Court of Appeals rendered on
February 19, 1979, in CA-G.R. No. 08249-SP (Reyes, Sundiam [P], and
Cortez, JJ; Rollo, [pp. 22-28) ordering the dismissal of the complaint in
Civil Case No. C-6095 filed by herein petitioners against Lorenzo Caia.
Francisco Caia-Rivera, the National Housing Authority (formerly
PHHC). Francisco M. Custodio, and respondent Manotok Realty, Inc.,
before then Court of First Instance of Rizal, Branch XXXIII, Caloocan
City.
The relevant antecedents, as narrated by respondent court, are as
follows:
(1)
During his lifetime, Julian Caia, was the occupant and
tenant of a parcel of land, owned by the Republic of the Philippines but
administered at first by the then Rural Progress Administration and
later by the Peoples Homesite and Housing Corporation (PHHC)
described as Lot 20 of Consolidated Sub-division plan LRC Pcs-1828,
and in Transfer Certificate of Title No. 365557 of the Registry of Deeds
of Caloocan City, with an area of 25,776 square meters;
(2)
The Republic of the Philippines acquired the aforesaid lot,
together with other lots in the Gonzales Estate by Expropriation to be
resold to qualified and bonafide tenants-occupants and, to achieve this
end, the President of the Philippines, on August 30, 1961, designated
the PHHC with the task of selling and transferring the said lots to
qualified tenants concerned and/or their lawful heirs;
(3)
Julian Caia had a brother, Justo Caia. The latter had three
children, namely, Emeteria Caia Buenaventura, Lorenzo Caia and
Francisca Caia. Emeteria Caia Buenaventura died as early as July 11,
1937 and was survived by Maria Buenaventura and Narciso
Buenaventura, the Private Respondents in this case;
(4)
However the Gonzales Estate still had to be sub-divided into
lots; but before the subdivision of the property and the subdivision plan
thereof could be approved and said lot transferred to Julian Caia, the
latter died on December 17, 1961. Justo Caia, the brother, died later
on May 3, 1962;
(5)
Thus, at the time Julian Caia died, he was survived as his
sole heirs, by his brother, Justo Caia and the latter's children, Lorenzo
Caia and Francisca Caia: also surviving him were the private
respondents Narciso Buenaventura and Maria Buenaventura, the
children of Emeteria Buenaventura who died earlier in 1937;
(6)
On November 4, 1965, the People Homesite and Housing
Corporation executed a 'Deed of Absolutes Sale' over the said lot to
Lorenzo Caia and Francisca Caia-Rivera, as the sole heirs and
successor-in-interest of Julian Caia for and in consideration of the
purchase price of P96,048.80 (a certified xerox copy of the aforesaid
Deed is hereto attached as Annex 'A' hereof):

(7)
By virtue of the said sale, Lorenzo Caia and Francisca
Caia-Rivera were issued, on November 5, 1965. Transfer Certificate of
Title No. 21013 over the said lot by the Registry of Deeds of Caloocan
City (certified xerox copy of the aforesaid title is hereto attached as
Annex "B" hereof);
(8)
On January 26, 1966, Lorenzo Caia and Francisca CaiaRivera executed a 'Deed of Absolutes Sale' over the said lot in favor of
Francisco M. Custodio after which the latter was issued on January 26,
1966. Transfer Certificate of Title No. 21484 of the Registry of Deeds of
Caloocan City (a certified xerox copy of the aforesaid Deed of Absolute
Sale and Transfer Certificate of tile are hereto attached as Annexes "C"
and ''D" hereof respectively);
(9)
On January 26, 1966, Francisco Custodio executed a 'Deed of
Absolute Sale' over the said lot in favor of the Petitioner for which the
latter was issued on January 26, 1966. Transfer Certificate of Title No.
2145 of the Registry of Deeds of Caloocan City (a certified xerox copy
of the said Deed of Absolute Sale and Title are hereto attached as
Annexes "E" and "F" hereof respectively);
(10)
On December 24, 1976, Private Respondents [now
petitioners] filed a complaint with the respondent court docketed as
Civil Case No. C-6095 entitled 'Narciso Buenaventura and Maria
Buenaventura vs. Lorenzo Caia, Francisca Caia, National Housing
Authority (formerly PHHC). Francisco M. Custodio. Manotok Realty, Inc.'
for Annulment of Titles, Contracts and/or Sales. Reconveyance and
Damages (a copy of the aforesaid complaint attached hereto as Annex
"G" hereof);
(11)
The Petitioner [now private respondent Manotok Realty]
subsequently filed with the Respondent Court a 'Motion to Dismiss' the
aforesaid complaint on the ground of, inter alia, prescription (a copy of
the aforesaid motion is hereto attached as Annex "H" hereof);
(12)
The Private Respondents, however filed their Opposition to
the aforesaid motion of the Petitioner (a copy of the aforesaid
opposition is hereto attached as Annex "'1"' hereof);
(13)
On July 28, 1977, the Respondent Court issued an Order
denying the aforesaid Motion of the Petitioner (a certified xerox copy of
the aforesaid order is hereto attached as Annex "J" hereof);
(14)
The Petitioner thereafter filed a 'Motion for Reconsideration'
of the aforesaid Order, to which the private respondents filed their
opposition. The petitioner however, filed its Reply to the aforesaid
opposition of the private respondents despite which the respondent
court, on July 21, 1978 issued an order denying the aforesaid motion of
the petitioner (a copy of each aforesaid motion, opposition and reply
are hereto attached as Annexes "K","'L" and "M", hereof respectively;
while a certified xerox copy of the aforesaid Order is hereto attached
as Annex 'N' hereof). Decision, pp. 1-3: rollo, pp. 22-24.).
Aggrieved by the rules of the trial court, herein private respondents
filed a petitioner with the Court of Appeals which later granted the
petitioner and ordered the dismissal of the complaint of then private
respondents, now herein petitioners, on the ground that their action
has already prescribed. A subsequent motion for reconsideration was
to no avail.
Hence, the instant petition.
Both sides offer conflicting opinions on the applicability of Article 1410
of the Civil Code of the Philippines.
The Court of Appeals, in directing the dismissal of the complaint filed
by they petitioners in the court of origin, held that Article 1410 of the
Civil Code on imprescriptibility of actions is not applicable because
fraud in the transfer of the property was alleged in petitioner's
complaint. The Court of Appeals was, of course, referring to paragraph
20 of the Complaint which reads:
20.
That in executing the said 'Deed of Absolute Sale' over Lot
20 in favor of defendants Lorenzo Caia and Francisca Caia-Rivera,
defendant NHA acted with evident bad faith, gross negligence and
carelessness, while defendants Lorenzo Caia and Francisca Caia
acted with false representations, fraud and deceit and the three
defendants connived, conspired and schemed to deprive the plaintiffs
of their rights over 1/3 portion of Lot 20 of the Gonzales Estate
administered by defendant NHA, to the damage and prejudice of the
herein plaintiffs; (Rollo, p. 17).
Respondent court further stated that due to the allegation that fraud
was supposedly employed in the execution of the deed of sale and
thereafter in the issuance of Transfer Certificate of Title No. 21484,
there was created in favor of then private respondents, now
petitioners, an implied or constructive trust, such that the action for
reconveyance must be filed by the defrauded party within the a period

of ten (10) years from the date of issuance of the title, otherwise, the
action prescribed. Consequently, respondent court held that because
the complaint in Civil Case No. C-6095 was filed only on December 28,
1976 or after more than ten years from the issuance of the transfer
certificate of title on January 26, 1966, the assertion for recovery of
property based on fraudulent transfer and registration can no longer be
entertained (Rollo, pp. 27-28).
Petitioners, on the other hand, argue otherwise. They claim that the
action for reconveyance is based both on the grounds of fraud and
simulation of contracts, hence, it cannot be made subject to the rule on
prescription of action. (Rollo, p. 15).
We agree with respondent court.
Petitioners' allegation in their complaint filed in the court of origin, that
fraud was employed in the execution of a deed of sale and
subsequently, in the issuance of a transfer certificate of title, renders
their action for reconveyance susceptible to prescription either within 4
years or 10 years. In the present case, even if one bends backwards
and considers the circumstances alleged as having created an implied
or constructive trust, such that the action for reconveyance would
prescribed in the longer period of 10 years (Duque vs. Doming, 80
SCRA 654 [1977]; Cerantes vs. Court of Appeals, 76 SCRA 514 [1977];
Jaramil vs. Court of Appeals 78 SCRA 420 [1977]), still petitioners'
action is plainly time-barred. Considering that the deed of sale
executed by the Philippine Homesite and Housing Corporation in favor
of Lorenzo Caia and Francisca Caia-Rivera was executed on
November 4, 1965 and on the following day, Transfer Certificate of Title
No. 21484 was issued in favor of the vendees (private respondents),
the party allegedly defrauded in the transaction, herein petitioners,
had only 10 years or until September 5, 1975 within which to file the
appropriate action. In the instant case, the action was filed only on
December 28, 1976, which was beyond the prescribed period set by
law.
Verily, the principle on prescription of actions is designed to cover
situations such as the case at bar, where there have been a series of
transfers to innocent purchasers for value. To set aside these
transactions only to accommodate a party who has slept on his rights
is anathema to good order.
Independently of the principal of prescription of actions working
against petitioners, the doctrine of laches may further be counted
against them, which latter tenet finds application even to
imprescriptible actions. Thus, in Rafols vs. Barba (199 SCRA 146
[1982]), We find the following words of wisdom:
In the least, plaintiffs-appellants are already guilty of laches as would
effectively derail there cause of action. While it is true that technically,
the action to annul a void or inexistent contract does not prescribe, it
may nonetheless be barred by laches. As was stated in Nielson & Co. v.
Lepanto Consolidated Mining Co., L-21601. December 17, 1966, 18
SCRA [1040]:
The defense of laches applied independently of prescription. Laches is
different from the statute of limitations. Prescription is concerned with
the fact of delay, whereas laches is concerned with the effect of delay.
Prescription is a matter of time; laches is principally a question of
inequity of permitting a claim to be enforced, this inequity being
founded on the same change in the condition of the property or the
relation of the parties. Prescription is statutory; laches is not. Laches
applies in equity, whereas prescription is based on fixed time; laches is
not.
The essential elements of the principle of laches are all present herein,
to wit:
... (1) conduct on the part of the defendant, or one under whom he
claims, giving rise to the situation that led to the complaint for which
the complaint seeks a remedy: (2) delay in asserting the complainant's
rights, the complainant having had knowledge or notice of the
defendant's conduct and having been afforded an opportunity to
institute a suit; (3) lack of knowledge or notice on the part of the
defendant that the complainant would assert the right on which he
bases his suit; and (4) injury or prejudice to the defendant in the event
relief is accorded to the complainant or the suit is not held barred.
(Yusingco vs. Ong Hing Lian, 42 SCRA 589.)
The defendant-appellee purchased the parcel of land in question giving
rise to the complaint of herein plaintiffs-appellants. The latter delayed
the assertion of their supposed right to annul the sale for a period of
over fifteen (15) years despite knowledge or notice of such sale. They
had all the opportunity within that period of time to take action to set
aside or annul the sale. Defendant-appellee was never apprised of any
intention on the part of plaintiffs-appellants to annul the sale until this
action was filed. Finally, the defendant-appellee stands to lose the

property in question if the suit filed against him by plaintiffs-appellants


shall be deemed barred. (at pp. 154-155.)
WHEREFORE, premises considered,. the judgment appealed from is
hereby AFFIRMED in toto.
SO ORDERED.
Gutierrez, Jr., (Chairman), Bidin, Davide, Jr., and Romero, JJ., concur.

G.R. No. 146294

July 31, 2006

JOHN ABING, petitioner,


vs.
JULIET WAEYAN, respondent.
DECISION
GARCIA, J.:
In this appeal by way of a petition for review under Rule 45 of the Rules
of Court, petitioner John Abing (John, hereafter) seeks to set aside the
Decision1 dated October 24, 2000 of the Court of Appeals (CA) in CAG.R. SP No. 48675, reversing that of the Regional Trial Court (RTC) of
Benguet, Branch 64, which affirmed an earlier decision of the Municipal
Trial Court (MTC) of Mankayan, Benguet in an ejectment suit thereat
commenced by the petitioner against the respondent.
In the main, the controversy is between a man and a woman who,
during the good old days, lived together as husband and wife without
the benefit of marriage. During their cohabitation, they acquired
properties. Later, they parted ways, and with it this litigation between
them involving one of their common properties.
The facts:
Sometime in 1986, John and respondent Juliet Waeyan (Juliet, for short)
met and fell in love with each other. In time, the duo cohabited as
husband and wife without the benefit of marriage. Together, the couple
bought a 2-storey residential house from one Benjamin Macua which
was erected on a lot owned by a certain Alejandro Dio on Aurora
Street, Mankayan, Benguet. Consequent to the purchase, the tax
declaration of the 2-storey house was transferred in the name of Juliet.
On December 2, 1991, Juliet left for overseas employment in Korea.
She would send money to John who deposited the same in their joint
bank account.
In 1992, the original 2-storey residential house underwent renovation.
To it was annexed a new structure which housed a sari-sari store. This
new structure and the sari-sari store thereat are the properties
involved in this case.

In 1994, Juliet returned from Korea and continued to live with John. She
managed the sari-sari store while John worked as a mine employee of
the Lepanto Consolidated Mining, Inc.
In 1995, the relationship between the two turned from bad to worse.
Hence, they decided to partition their properties. For the purpose, they
executed on October 7, 1995 a Memorandum of Agreement.
Unfortunately, the document was left unsigned by the parties although
signed by the witnesses thereto. Under their unsigned agreement, John
shall leave the couples' dwelling with Juliet paying him the amount of
P428,870.00 representing John's share in all their properties. On the
same date October 7, 1995 Juliet paid John the sum of P232,397.66
by way of partial payment of his share, with the balance of
P196,472.34 to be paid by Juliet in twelve monthly installment
beginning November 1995.
Juliet, however, failed to make good the balance. On account thereof,
John demanded of her to vacate the annex structure housing the sarisari store. Juliet refused, prompting John to file an ejectment suit
against her before the MTC of Mankayan, Benguet.
In his complaint, John alleged that he alone spent for the construction
of the annex structure with his own funds and thru money he borrowed
from his relatives. In fact, he added that the tax declaration for the
structure was under his name. On this premise, John claimed exclusive
ownership of the subject structure, which thereby gave him the right to
eject Juliet therefrom upon the latter's failure to pay the agreed
balance due him under the aforementioned Memorandum of
Agreement.
In her answer, Juliet countered that their original house was renovated
thru their common funds and that the subject structure annexed
thereto was merely an attachment or an extension of their original
residential house, hence the same pertained to the two of them in
common.
In a decision2 dated March 15, 1997, the MTC, on its finding that the
money used in the construction of the structure in question solely
came from John, ruled that the same exclusively pertained to the
latter, and accordingly ordered Juliet's eviction therefrom, including the
sari-sari store thereat, and required her to surrender possession
thereof to John, thus:
WHEREFORE, judgment is rendered in favor of the plaintiff (John) and
against the defendant (Juliet).
Defendant is hereby ordered to vacate the premises of the store in
litigation covered by Tax Declaration No. 96-001-00445 in the name of
the Plaintiff and turn over possession thereof to the latter.
Defendant is hereby further ordered to pay the Plaintiff the sum of
P2,500.00 a month from the time she withheld possession of the store
in litigation in June 1996 until she vacates the same and turn over
possession thereof to the Plaintiff.
Defendant is finally ordered, to pay the sum of P5,000.00 to the
Plaintiff by way of Attorney's fees; and to pay the costs.
SO ORDERED.
On Juliet's appeal to the RTC, the latter, in its decision of July 29, 1995,
affirmed that of the MTC. Undaunted, Juliet then went to the CA in CAG.R. SP No. 48675.
As stated at the threshold hereof, the CA, in its Decision of October 24,
2000,3 reversed that of the RTC, to wit:
WHEREFORE, the petition is GRANTED. The assailed decision of the
Regional Trial Court is hereby reversed and set aside. Petitioner, Juliet
Waeyan is entitled to possess the property and maintain therein her
business.
SO ORDERED.
Partly says the CA in its reversal disposition:
It is undisputed that the parties lived together as husband and wife
without the benefit of marriage from 1986 to 1995 and that they
acquired certain properties which must be divided between them upon
the termination of their common law relationship.
xxx

xxx

xxx

. . . their property relations cannot be governed by the provision of the


Civil Code on conjugal partnership... but by the rule on co-ownership.
xxx

xxx

xxx

. . . the parties' share in respect of the properties they have


accumulated during their cohabitation shall be equal unless there is
proof to the contrary.
To the CA, John's evidence failed to establish that he alone spent for
the construction of the annex structure. Hence, the same pertained to
both, and being a co-owner herself, Juliet cannot be evicted therefrom,
adding that if ever, John's cause of action should have been for a sum
of money "because he claims that Juliet still owes him the payment for
the extension." According to the CA, ejectment cannot lie against Juliet
because Juliet's possession of the premises in dispute was not by virtue
of a contract, express or implied, nor did she obtain such possession
thru force, intimidation, threat, strategy or stealth.
Hence, John's present recourse, submitting that the CA erred in
1. not giving effect to the parties' Memorandum of Agreement which
should have been binding between them albeit unsigned by both;
2. in holding that the subject premises (annex structure housing the
sari-sari store) is owned by the two of them in common;
3. in ruling that the parties should settle their common properties in a
separate action for partition even as the community character of the
subject premises has not been proven.
We AFFIRM with modification.
Essentially, the issues raised center on the core question of whether or
not the property subject of the suit pertains to the exclusive ownership
of petitioner, John. Departing from the factual findings of the two
courts before it, the CA found that the premises in dispute is owned in
common by Juliet and John, the latter having failed to establish by the
required quantum of proof that the money spent for the construction
thereof solely came from him. Being a co-owner of the same structure,
Juliet may not be ejected therefrom.
While the question raised is essentially one of fact, of which the Court
normally eschews from, yet, given the conflicting factual findings of the
three courts below, the Court shall go by the exception4 to the general
rule and proceed to make its own assessment of the evidence.
First and foremost, it is undisputed that the parties hereto lived
together as husband and wife from 1986 to 1995 without the benefit of
marriage. Neither is it disputed that sometime in December 1991, Juliet
left for Korea and worked thereat, sending money to John which the
latter deposited in their joint account. In fact, Juliet was still in Korea
when the annex structure was constructed in 1992.
Other than John's bare allegation that he alone, thru his own funds and
money he borrowed from his relatives, spent for the construction of the
annex structure, evidence is wanting to support such naked claim. For
sure, John even failed to reveal how much he spent therefor. Neither
did he divulge the names of the alleged relatives from whom he made
his borrowings, let alone the amount of money he borrowed from them.
All that petitioner could offer by way of reinforcing his claim of
spending his own funds and borrowed money in putting up the subject
structure was the affidavit executed by a certain Manuel Macaraeg to
the effect that petitioner borrowed P30,000.00 from him. Even then,
Macaraeg stated in his affidavit that it was sometime in 1990 when
John borrowed said amount from him. With the petitioner's own
admission that the subject structure was constructed only in 1992, or
two years after he borrowed P30,000.00 from Macaraeg, it is even
doubtful whether the amount he allegedly borrowed from the latter
went into the construction of the structure in dispute. More, it is noted
that while petitioner was able to present in evidence the Macaraeg
affidavit, he failed to introduce similar affidavits, if any, of his close
relatives from whom he claimed to have made similar borrowings. For
sure, not a single relative came forward to confirm petitioner's tale. In
short, there is a paucity of evidence, testimonial or documentary, to
support petitioner's self-serving allegation that the annex structure
which housed the sari-sari store was put up thru his own funds and/or
money borrowed by him. Sure, petitioner has in his favor the tax
declaration covering the subject structure. We have, however, ruled
time and again that tax declarations do not prove ownership but at
best an indicia of claims of ownership.5 Payment of taxes is not proof
of ownership, any more than indicating possession in the concept of an
owner.6 Neither tax receipts nor declaration of ownership for taxation
purposes are evidence of ownership or of the right to possess realty
when not supported by other effective proofs.7
In this connection, Article 147 of the Family Code is instructive. It
reads:
Art. 147. When a man and a woman who are capacitated to marry each
other, live exclusively with each other as husband and wife without the
benefit of marriage or under a void marriage, their wages and salaries

shall be owned by them in equal shares and the property acquired by


both of them through their work or industry shall be governed by the
rules on co-ownership.
In the absence of proof to the contrary, properties acquired while they
lived together shall be presumed to have been obtained by their joint
efforts, work or industry, and shall be owned by them in equal shares.
For purposes of this Article, a party who did not participate in the
acquisition by other party of any property shall be deemed to have
contributed jointly in the acquisition thereof if the former's efforts
consisted in the care and maintenance of the family and of the
household.
The law is clear. In the absence, as here, of proofs to the contrary, any
property acquired by common-law spouses during their period of
cohabitation is presumed to have been obtained thru their joint efforts
and is owned by them in equal shares. Their property relationship is
governed by the rules on co-ownership. And under this regime, they
owned their properties in common "in equal shares." Being herself a
co-owner of the structure in question, Juliet, as correctly ruled by the
CA, may not be ejected therefrom.
True it is that under Article 4878 of the Civil Code, a co-owner may
bring an action for ejectment against a co-owner who takes exclusive
possession and asserts exclusive ownership of a common property. It
bears stressing, however, that in this case, evidence is totally wanting
to establish John's or Juliet's exclusive ownership of the property in
question. Neither did Juliet obtain possession thereof by virtue of a
contract, express or implied, or thru intimidation, threat, strategy or
stealth. As borne by the record, Juliet was in possession of the subject
structure and the sari-sari store thereat by virtue of her being a coowner thereof. As such, she is as much entitled to enjoy its possession
and ownership as John.
We, however, disagree with the ruling of the CA that the subject
Memorandum of Agreement, being unsigned by Juliet and John, has no
binding effect between them.
It is a matter of record that pursuant to said Agreement, Juliet did pay
John the amount of P232,397.66, as initial payment for John's share in
their common properties, with the balance of P196,472.34 payable in
twelve monthly installments beginning November 1995. It is also a
matter of record that the Agreement was signed by the witnesses
thereto. Hence, the irrelevant circumstances that the Agreement was
left unsigned by Juliet and John cannot adversely affect its binding
force or effect between them, as evidently, Juliet's initial payment of
P232,397.66 to John was in fulfillment of what the parties had agreed
upon thereunder. However, and as correctly held by the CA, Juliet's
failure to pay John the balance of the latter's share in their common
properties could at best give rise to an action for a sum of money
against Juliet, or for rescission of the said agreement and not for
ejectment.
WHEREFORE, the petition is DENIED and the assailed CA Decision is
AFFIRMED, except that portion thereof denying effect to the parties'
Memorandum of Agreement for being unsigned by both.
Costs against petitioner.
SO ORDERED.
Puno, Chairperson, Sandoval-Gutierrez, Corona, Azcuna, J.J., concur.
G.R. No. 163744

February 29, 2008

METROPOLITAN BANK AND TRUST CO., petitioner,


vs.
NICHOLSON PASCUAL a.k.a. NELSON PASCUAL, respondent.
DECISION
VELASCO, JR., J.:
Respondent Nicholson Pascual and Florencia Nevalga were married on
January 19, 1985. During the union, Florencia bought from spouses
Clarito and Belen Sering a 250-square meter lot with a three-door
apartment standing thereon located in Makati City. Subsequently,
Transfer Certificate of Title (TCT) No. S-101473/T-510 covering the
purchased lot was canceled and, in lieu thereof, TCT No. 1562831 of
the Registry of Deeds of Makati City was issued in the name of
Florencia, "married to Nelson Pascual" a.k.a. Nicholson Pascual.
In 1994, Florencia filed a suit for the declaration of nullity of marriage
under Article 36 of the Family Code, docketed as Civil Case No. Q-9523533. After trial, the Regional Trial Court (RTC), Branch 94 in Quezon
City rendered, on July 31, 1995, a Decision,2 declaring the marriage of
Nicholson and Florencia null and void on the ground of psychological

incapacity on the part of Nicholson. In the same decision, the RTC, inter
alia, ordered the dissolution and liquidation of the ex-spouses conjugal
partnership of gains. Subsequent events saw the couple going their
separate ways without liquidating their conjugal partnership.
On April 30, 1997, Florencia, together with spouses Norberto and Elvira
Oliveros, obtained a PhP 58 million loan from petitioner Metropolitan
Bank and Trust Co. (Metrobank). To secure the obligation, Florencia and
the spouses Oliveros executed several real estate mortgages (REMs)
on their properties, including one involving the lot covered by TCT No.
156283. Among the documents Florencia submitted to procure the loan
were a copy of TCT No. 156283, a photocopy of the marriage-nullifying
RTC decision, and a document denominated as "Waiver" that Nicholson
purportedly executed on April 9, 1995. The waiver, made in favor of
Florencia, covered the conjugal properties of the ex-spouses listed
therein, but did not incidentally include the lot in question.
Due to the failure of Florencia and the spouses Oliveros to pay their
loan obligation when it fell due, Metrobank, on November 29, 1999,
initiated foreclosure proceedings under Act No. 3135, as amended,
before the Office of the Notary Public of Makati City. Subsequently,
Metrobank caused the publication of the notice of sale on three issues
of Remate.3 At the auction sale on January 21, 2000, Metrobank
emerged as the highest bidder.
Getting wind of the foreclosure proceedings, Nicholson filed on June 28,
2000, before the RTC in Makati City, a Complaint to declare the nullity
of the mortgage of the disputed property, docketed as Civil Case No.
00-789 and eventually raffled to Branch 65 of the court. In it, Nicholson
alleged that the property, which is still conjugal property, was
mortgaged without his consent.
Metrobank, in its Answer with Counterclaim and Cross-Claim,4 alleged
that the disputed lot, being registered in Florencias name, was
paraphernal. Metrobank also asserted having approved the mortgage
in good faith.
Florencia did not file an answer within the reglementary period and,
hence, was subsequently declared in default.
The RTC Declared the REM Invalid
After trial on the merits, the RTC rendered, on September 24, 2001,
judgment finding for Nicholson. The fallo reads:
PREMISES CONSIDERED, the Court renders judgment declaring the real
estate mortgage on the property covered by [TCT] No. 156283 of the
Registry of Deeds for the City of Makati as well as all proceedings
thereon null and void.

The RTC dismissed Metrobanks counterclaim and cross-claim against


the ex-spouses.
Metrobanks motion for reconsideration was denied. Undeterred,
Metrobank appealed to the Court of Appeals (CA), the appeal docketed
as CA-G.R. CV No. 74874.
The CA Affirmed with Modification the RTCs Decision
On January 28, 2004, the CA rendered a Decision affirmatory of that of
the RTC, except for the award therein of moral damages and attorneys
fees which the CA ordered deleted. The dispositive portion of the CAs
Decision reads:
WHEREFORE, premises considered, the appealed decision is hereby
AFFIRMED WITH MODIFICATION with respect to the award of moral
damages and attorneys fees which is hereby DELETED.
SO ORDERED.6
Like the RTC earlier held, the CA ruled that Metrobank failed to
overthrow the presumption established in Art. 116 of the Family Code.
And also decreed as going against Metrobank was Florencias failure to
comply with the prescriptions of the succeeding Art. 124 of the Code
on the disposition of conjugal partnership property. Art. 124 states:
Art. 124. The administration and enjoyment of the conjugal partnership
property shall belong to both spouses jointly. In case of disagreement,
the husbands decision shall prevail, subject to recourse to the court by
the wife for proper remedy x x x.
In the event that one spouse is incapacitated or otherwise unable to
participate in the administration of the conjugal properties, the other
spouse may assume sole powers of administration. These powers do
not include disposition or encumbrance without authority of the court
or written consent of the other spouse. In the absence of such
authority or consent, the disposition or encumbrance shall be void.
However, the transaction shall be construed as a continuing offer on
the part of the consenting spouse and the third person, and may be
perfected as a binding contract upon the acceptance by the other
spouse or authorization by the court before the offer is withdrawn by
either or both offerors.
As to the deletion of the award of moral damages and attorneys fees,
the CA, in gist, held that Metrobank did not enter into the mortgage
contract out of ill-will or for some fraudulent purpose, moral obliquity,
or like dishonest considerations as to justify damages.
Metrobank moved but was denied reconsideration by the CA.

The Court further orders defendants [Metrobank and Florencia] jointly


and severally to pay plaintiff [Nicholson]:

Thus, Metrobank filed this Petition for Review on Certiorari under Rule
45, raising the following issues for consideration:

1. PhP100,000.00 by way of moral damages;

a. Whether or not the [CA] erred in declaring subject property as


conjugal by applying Article 116 of the Family Code.

2. PhP75,000.00 by way of attorneys fees; and


3. The costs.
SO ORDERED.5
Even as it declared the invalidity of the mortgage, the trial court found
the said lot to be conjugal, the same having been acquired during the
existence of the marriage of Nicholson and Florencia. In so ruling, the
RTC invoked Art. 116 of the Family Code, providing that "all property
acquired during the marriage, whether the acquisition appears to have
been made, contracted or registered in the name of one or both
spouses, is presumed to be conjugal unless the contrary is proved." To
the trial court, Metrobank had not overcome the presumptive conjugal
nature of the lot. And being conjugal, the RTC concluded that the
disputed property may not be validly encumbered by Florencia without
Nicholsons consent.
The RTC also found the deed of waiver Florencia submitted to
Metrobank to be fatally defective. For let alone the fact that Nicholson
denied executing the same and that the signature of the notarizing
officer was a forgery, the waiver document was allegedly executed on
April 9, 1995 or a little over three months before the issuance of the
RTC decision declaring the nullity of marriage between Nicholson and
Florencia.
The trial court also declared Metrobank as a mortgagee in bad faith on
account of negligence, stating the observation that certain data
appeared in the supporting contract documents, which, if properly
scrutinized, would have put the bank on guard against approving the
mortgage. Among the data referred to was the date of execution of the
deed of waiver.

b. Whether or not the [CA] erred in not holding that the declaration of
nullity of marriage between the respondent Nicholson Pascual and
Florencia Nevalga ipso facto dissolved the regime of community of
property of the spouses.
c. Whether or not the [CA] erred in ruling that the petitioner is an
innocent purchaser for value.7
Our Ruling
A modification of the CAs Decision is in order.
The Disputed Property is Conjugal
It is Metrobanks threshold posture that Art. 160 of the Civil Code
providing that "[a]ll property of the marriage is presumed to belong to
the conjugal partnership, unless it be prove[n] that it pertains
exclusively to the husband or to the wife," applies. To Metrobank, Art.
116 of the Family Code could not be of governing application inasmuch
as Nicholson and Florencia contracted marriage before the effectivity
of the Family Code on August 3, 1988. Citing Manongsong v. Estimo,8
Metrobank asserts that the presumption of conjugal ownership under
Art. 160 of the Civil Code applies when there is proof that the property
was acquired during the marriage. Metrobank adds, however, that for
the presumption of conjugal ownership to operate, evidence must be
adduced to prove that not only was the property acquired during the
marriage but that conjugal funds were used for the acquisition, a
burden Nicholson allegedly failed to discharge.
To bolster its thesis on the paraphernal nature of the disputed property,
Metrobank cites Francisco v. Court of Appeals9 and Jocson v. Court of
Appeals,10 among other cases, where this Court held that a property

registered in the name of a certain person with a description of being


married is no proof that the property was acquired during the spouses
marriage.
On the other hand, Nicholson, banking on De Leon v. Rehabilitation
Finance Corporation11 and Wong v. IAC,12 contends that Metrobank
failed to overcome the legal presumption that the disputed property is
conjugal. He asserts that Metrobanks arguments on the matter of
presumption are misleading as only one postulate needs to be shown
for the presumption in favor of conjugal ownership to arise, that is, the
fact of acquisition during marriage. Nicholson dismisses, as
inapplicable, Francisco and Jocson, noting that they are relevant only
when there is no indication as to the exact date of acquisition of the
property alleged to be conjugal.
As a final point, Nicholson invites attention to the fact that Metrobank
had virtually recognized the conjugal nature of the property in at least
three instances. The first was when the bank lumped him with
Florencia in Civil Case No. 00-789 as co-mortgagors and when they
were referred to as "spouses" in the petition for extrajudicial
foreclosure of mortgage. Then came the published notice of foreclosure
sale where Nicholson was again designated as co-mortgagor. And third,
in its demand-letter13 to vacate the disputed lot, Metrobank addressed
Nicholson and Florencia as "spouses," albeit the finality of the decree
of nullity of marriage between them had long set in.
We find for Nicholson.
First, while Metrobank is correct in saying that Art. 160 of the Civil
Code, not Art. 116 of the Family Code, is the applicable legal provision
since the property was acquired prior to the enactment of the Family
Code, it errs in its theory that, before conjugal ownership could be
legally presumed, there must be a showing that the property was
acquired during marriage using conjugal funds. Contrary to
Metrobanks submission, the Court did not, in Manongsong,14 add the
matter of the use of conjugal funds as an essential requirement for the
presumption of conjugal ownership to arise. Nicholson is correct in
pointing out that only proof of acquisition during the marriage is
needed to raise the presumption that the property is conjugal. Indeed,
if proof on the use of conjugal is still required as a necessary condition
before the presumption can arise, then the legal presumption set forth
in the law would veritably be a superfluity. As we stressed in Castro v.
Miat:
Petitioners also overlook Article 160 of the New Civil Code. It provides
that "all property of the marriage is presumed to be conjugal
partnership, unless it be prove[n] that it pertains exclusively to the
husband or to the wife." This article does not require proof that the
property was acquired with funds of the partnership. The presumption
applies even when the manner in which the property was acquired
does not appear.15 (Emphasis supplied.)
Second, Francisco and Jocson do not reinforce Metrobanks theory.
Metrobank would thrust on the Court, invoking the two cases, the
argument that the registration of the property in the name of
"Florencia Nevalga, married to Nelson Pascual" operates to describe
only the marital status of the title holder, but not as proof that the
property was acquired during the existence of the marriage.
Metrobank is wrong. As Nicholson aptly points out, if proof obtains on
the acquisition of the property during the existence of the marriage,
then the presumption of conjugal ownership applies. The correct lesson
of Francisco and Jocson is that proof of acquisition during the marital
coverture is a condition sine qua non for the operation of the
presumption in favor of conjugal ownership. When there is no showing
as to when the property was acquired by the spouse, the fact that a
title is in the name of the spouse is an indication that the property
belongs exclusively to said spouse.16
The Court, to be sure, has taken stock of Nicholsons arguments
regarding Metrobank having implicitly acknowledged, thus being in
virtual estoppel to question, the conjugal ownership of the disputed lot,
the bank having named the former in the foreclosure proceedings
below as either the spouse of Florencia or her co-mortgagor. It is felt,
however, that there is no compelling reason to delve into the matter of
estoppel, the same having been raised only for the first time in this
petition. Besides, however Nicholson was designated below does not
really change, one way or another, the classification of the lot in
question.
Termination of Conjugal Property Regime does
not ipso facto End the Nature of Conjugal Ownership
Metrobank next maintains that, contrary to the CAs holding, Art. 129
of the Family Code is inapplicable. Art. 129 in part reads:
Art. 129. Upon the dissolution of the conjugal partnership regime, the
following procedure shall apply:

xxxx
(7) The net remainder of the conjugal partnership properties shall
constitute the profits, which shall be divided equally between husband
and wife, unless a different proportion or division was agreed upon in
the marriage settlements or unless there has been a voluntary waiver
or forfeiture of such share as provided in this Code.
Apropos the aforequoted provision, Metrobank asserts that the waiver
executed by Nicholson, effected as it were before the dissolution of the
conjugal property regime, vested on Florencia full ownership of all the
properties acquired during the marriage.
Nicholson counters that the mere declaration of nullity of marriage,
without more, does not automatically result in a regime of complete
separation when it is shown that there was no liquidation of the
conjugal assets.
We again find for Nicholson.
While the declared nullity of marriage of Nicholson and Florencia
severed their marital bond and dissolved the conjugal partnership, the
character of the properties acquired before such declaration continues
to subsist as conjugal properties until and after the liquidation and
partition of the partnership. This conclusion holds true whether we
apply Art. 129 of the Family Code on liquidation of the conjugal
partnerships assets and liabilities which is generally prospective in
application, or Section 7, Chapter 4, Title IV, Book I (Arts. 179 to 185)
of the Civil Code on the subject, Conjugal Partnership of Gains. For, the
relevant provisions of both Codes first require the liquidation of the
conjugal properties before a regime of separation of property reigns.
In Dael v. Intermediate Appellate Court, we ruled that pending its
liquidation following its dissolution, the conjugal partnership of gains is
converted into an implied ordinary co-ownership among the surviving
spouse and the other heirs of the deceased.17
In this pre-liquidation scenario, Art. 493 of the Civil Code shall govern
the property relationship between the former spouses, where:
Each co-owner shall have the full ownership of his part and of the fruits
and benefits pertaining thereto, and he may therefore alienate, assign
or mortgage it, and even substitute another person in its enjoyment,
except when personal rights are involved. But the effect of the
alienation or the mortgage, with respect to the co-owners, shall be
limited to the portion which may be allotted to him in the division upon
the termination of the co-ownership. (Emphasis supplied.)
In the case at bar, Florencia constituted the mortgage on the disputed
lot on April 30, 1997, or a little less than two years after the dissolution
of the conjugal partnership on July 31, 1995, but before the liquidation
of the partnership. Be that as it may, what governed the property
relations of the former spouses when the mortgage was given is the
aforequoted Art. 493. Under it, Florencia has the right to mortgage or
even sell her one-half (1/2) undivided interest in the disputed property
even without the consent of Nicholson. However, the rights of
Metrobank, as mortgagee, are limited only to the 1/2 undivided portion
that Florencia owned. Accordingly, the mortgage contract insofar as it
covered the remaining 1/2 undivided portion of the lot is null and void,
Nicholson not having consented to the mortgage of his undivided half.
The conclusion would have, however, been different if Nicholson
indeed duly waived his share in the conjugal partnership. But, as found
by the courts a quo, the April 9, 1995 deed of waiver allegedly
executed by Nicholson three months prior to the dissolution of the
marriage and the conjugal partnership of gains on July 31, 1995 bore
his forged signature, not to mention that of the notarizing officer. A
spurious deed of waiver does not transfer any right at all, albeit it may
become the root of a valid title in the hands of an innocent buyer for
value.
Upon the foregoing perspective, Metrobanks right, as mortgagee and
as the successful bidder at the auction of the lot, is confined only to
the 1/2 undivided portion thereof heretofore pertaining in ownership to
Florencia. The other undivided half belongs to Nicholson. As owner pro
indiviso of a portion of the lot in question, Metrobank may ask for the
partition of the lot and its property rights "shall be limited to the
portion which may be allotted to [the bank] in the division upon the
termination of the co-ownership."18 This disposition is in line with the
well-established principle that the binding force of a contract must be
recognized as far as it is legally possible to do soquando res non
valet ut ago, valeat quantum valere potest.19
In view of our resolution on the validity of the auction of the lot in favor
of Metrobank, there is hardly a need to discuss at length whether or
not Metrobank was a mortgagee in good faith. Suffice it to state for the
nonce that where the mortgagee is a banking institution, the general

rule that a purchaser or mortgagee of the land need not look beyond
the four corners of the title is inapplicable.20 Unlike private individuals,
it behooves banks to exercise greater care and due diligence before
entering into a mortgage contract. The ascertainment of the status or
condition of the property offered as security and the validity of the
mortgagors title must be standard and indispensable part of the
banks operation.21 A bank that failed to observe due diligence cannot
be accorded the status of a bona fide mortgagee,22 as here.
But as found by the CA, however, Metrobanks failure to comply with
the due diligence requirement was not the result of a dishonest
purpose, some moral obliquity or breach of a known duty for some
interest or ill-will that partakes of fraud that would justify damages.
WHEREFORE, the petition is PARTLY GRANTED. The appealed Decision
of the CA dated January 28, 2004, upholding with modification the
Decision of the RTC, Branch 65 in Makati City, in Civil Case No. 00-789,
is AFFIRMED with the MODIFICATION that the REM over the lot covered
by TCT No. 156283 of the Registry of Deeds of Makati City is hereby
declared valid only insofar as the pro indiviso share of Florencia
thereon is concerned.
As modified, the Decision of the RTC shall read:
PREMISES CONSIDERED, the real estate mortgage on the property
covered by TCT No. 156283 of the Registry of Deeds of Makati City and
all proceedings thereon are NULL and VOID with respect to the
undivided 1/2 portion of the disputed property owned by Nicholson, but
VALID with respect to the other undivided 1/2 portion belonging to
Florencia.
The claims of Nicholson for moral damages and attorneys fees are
DENIED for lack of merit.
No pronouncement as to costs.
SO ORDERED.

A DECREE OF ABSOLUTE NULLITY OF MARRIAGE shall only be issued


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

G.R. No. 178044

January 19, 2011

ALAIN M. DIO , Petitioner,


vs.
MA. CARIDAD L. DIO, Respondent.
DECISION
CARPIO, J.:
The Case
Before the Court is a petition for review1 assailing the 18 October 2006
Decision2 and the 12 March 2007 Order3 of the Regional Trial Court of
Las Pias City, Branch 254 (trial court) in Civil Case No. LP-01-0149.
The Antecedent Facts

Let copies of this Decision be furnished the parties, the Office of the
Solicitor General, Office of the City Prosecutor, Las Pias City and the
Office of the Local Civil Registrar of Las Pias City, for their information
and guidance.
SO ORDERED.4
Petitioner filed a motion for partial reconsideration questioning the
dissolution of the absolute community of property and the ruling that
the decree of annulment shall only be issued upon compliance with
Articles 50 and 51 of the Family Code.
In its 12 March 2007 Order, the trial court partially granted the motion
and modified its 18 October 2006 Decision as follows:
WHEREFORE, in view of the foregoing, judgment is hereby rendered:
1) Declaring the marriage between plaintiff ALAIN M. DIO and
defendant MA. CARIDAD L. DIO on January 14, 1998, and all its effects
under the law, as NULL and VOID from the beginning; and

Alain M. Dio (petitioner) and Ma. Caridad L. Dio (respondent) were


childhood friends and sweethearts. They started living together in 1984
until they decided to separate in 1994. In 1996, petitioner and
respondent decided to live together again. On 14 January 1998, they
were married before Mayor Vergel Aguilar of Las Pias City.

2) Dissolving the regime of absolute community of property.

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


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

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

Extrajudicial service of summons was effected upon respondent who,


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

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

On 30 April 2002, the Office of the Las Pias prosecutor found that
there were no indicative facts of collusion between the parties and the
case was set for trial on the merits.
Dr. Nedy L. Tayag (Dr. Tayag), a clinical psychologist, submitted a
psychological report establishing that respondent was suffering from
Narcissistic Personality Disorder which was deeply ingrained in her
system since her early formative years. Dr. Tayag found that
respondents disorder was long-lasting and by nature, incurable.
In its 18 October 2006 Decision, the trial court granted the petition on
the ground that respondent was psychologically incapacited to comply
with the essential marital obligations at the time of the celebration of
the marriage.
The Decision of the Trial Court
The trial court ruled that based on the evidence presented, petitioner
was able to establish respondents psychological incapacity. The trial
court ruled that even without Dr. Tayags psychological report, the
allegations in the complaint, substantiated in the witness stand, clearly
made out a case of psychological incapacity against respondent. The
trial court found that respondent committed acts which hurt and
embarrassed petitioner and the rest of the family, and that respondent
failed to observe mutual love, respect and fidelity required of her under
Article 68 of the Family Code. The trial court also ruled that respondent
abandoned petitioner when she obtained a divorce abroad and married
another man.
The dispositive portion of the trial courts decision reads:
WHEREFORE, in view of the foregoing, judgment is hereby rendered:
1. Declaring the marriage between plaintiff ALAIN M. DIO and
defendant MA. CARIDAD L. DIO on January 14, 1998, and all its effects
under the law, as NULL and VOID from the beginning; and
2. Dissolving the regime of absolute community of property.

A DECREE OF ABSOLUTE NULLITY OF MARRIAGE shall be issued after


liquidation, partition and distribution of the parties properties under
Article 147 of the Family Code.

Hence, the petition before this Court.


The Issue

The Ruling of this Court


The petition has merit.
Petitioner assails the ruling of the trial court ordering that a decree of
absolute nullity of marriage shall only be issued after liquidation,
partition, and distribution of the parties properties under Article 147 of
the Family Code. Petitioner argues that Section 19(1) of the Rule on
Declaration of Absolute Nullity of Null Marriages and Annulment of
Voidable Marriages6 (the Rule) does not apply to Article 147 of the
Family Code.
We agree with petitioner.
The Court has ruled in Valdes v. RTC, Branch 102, Quezon City that in a
void marriage, regardless of its cause, the property relations of the
parties during the period of cohabitation is governed either by Article
147 or Article 148 of the Family Code.7 Article 147 of the Family Code
applies to union of parties who are legally capacitated and not barred
by any impediment to contract marriage, but whose marriage is
nonetheless void,8 such as petitioner and respondent in the case
before the Court.
Article 147 of the Family Code provides:
Article 147. When a man and a woman who are capacitated to marry
each other, live exclusively with each other as husband and wife
without the benefit of marriage or under a void marriage, their wages
and salaries shall be owned by them in equal shares and the property
acquired by both of them through their work or industry shall be
governed by the rules on co-ownership.
In the absence of proof to the contrary, properties acquired while they
lived together shall be presumed to have been obtained by their joint
efforts, work or industry, and shall be owned by them in equal shares.
For purposes of this Article, a party who did not participate in the
acquisition by the other party of any property shall be deemed to have
contributed jointly in the acquisition thereof if the formers efforts
consisted in the care and maintenance of the family and of the
household.
Neither party can encumber or dispose by acts inter vivos of his or her
share in the property acquired during cohabitation and owned in

common, without the consent of the other, until after the termination
of their cohabitation.
When only one of the parties to a void marriage is in good faith, the
share of the party in bad faith in the co-ownership shall be forfeited in
favor of their common children. In case of default of or waiver by any
or all of the common children or their descendants, each vacant share
shall belong to the respective surviving descendants. In the absence of
descendants, such share shall belong to the innocent party. In all
cases, the forfeiture shall take place upon termination of the
cohabitation.
For Article 147 of the Family Code to apply, the following elements
must be present:
1. The man and the woman must be capacitated to marry each other;
2. They live exclusively with each other as husband and wife; and
3. Their union is without the benefit of marriage, or their marriage is
void.9
All these elements are present in this case and there is no question
that Article 147 of the Family Code applies to the property relations
between petitioner and respondent.
We agree with petitioner that the trial court erred in ordering that a
decree of absolute nullity of marriage shall be issued only after
liquidation, partition and distribution of the parties properties under
Article 147 of the Family Code. The ruling has no basis because Section
19(1) of the Rule does not apply to cases governed under Articles 147
and 148 of the Family Code. Section 19(1) of the Rule provides:
Sec. 19. Decision. - (1) If the court renders a decision granting the
petition, it shall declare therein that the decree of absolute nullity or
decree of annulment shall be issued by the court only after compliance
with Articles 50 and 51 of the Family Code as implemented under the
Rule on Liquidation, Partition and Distribution of Properties.
The pertinent provisions of the Family Code cited in Section 19(1) of
the Rule are:
Article 50. The effects provided for in paragraphs (2), (3), (4) and (5) of
Article 43 and in Article 44 shall also apply in proper cases to
marriages which are declared void ab initio or annulled by final
judgment under Articles 40 and 45.10
The final judgment in such cases shall provide for the liquidation,
partition and distribution of the properties of the spouses, the custody
and support of the common children, and the delivery of their
presumptive legitimes, unless such matters had been adjudicated in
previous judicial proceedings.
All creditors of the spouses as well as of the absolute community of the
conjugal partnership shall be notified of the proceedings for liquidation.
In the partition, the conjugal dwelling and the lot on which it is
situated, shall be adjudicated in accordance with the provisions of
Articles 102 and 129.
Article 51. In said partition, the value of the presumptive legitimes of
all common children, computed as of the date of the final judgment of
the trial court, shall be delivered in cash, property or sound securities,
unless the parties, by mutual agreement judicially approved, had
already provided for such matters.
The children of their guardian, or the trustee of their property, may ask
for the enforcement of the judgment.
The delivery of the presumptive legitimes herein prescribed shall in no
way prejudice the ultimate successional rights of the children accruing
upon the death of either or both of the parents; but the value of the
properties already received under the decree of annulment or absolute
nullity shall be considered as advances on their legitime.
It is clear from Article 50 of the Family Code that Section 19(1) of the
Rule applies only to marriages which are declared void ab initio or
annulled by final judgment under Articles 40 and 45 of the Family
Code. In short, Article 50 of the Family Code does not apply to
marriages which are declared void ab initio under Article 36 of the
Family Code, which should be declared void without waiting for the
liquidation of the properties of the parties.
Article 40 of the Family Code contemplates a situation where a second
or bigamous marriage was contracted.1avvphil Under Article 40, "[t]he
absolute nullity of a previous marriage may be invoked for purposes of
remarriage on the basis solely of a final judgment declaring such
previous marriage void." Thus we ruled:

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


invoked for purposes of contracting a second marriage, the sole basis
acceptable in law, for said projected marriage to be free from legal
infirmity, is a final judgment declaring a previous marriage void.11
Article 45 of the Family Code, on the other hand, refers to voidable
marriages, meaning, marriages which are valid until they are set aside
by final judgment of a competent court in an action for annulment.12
In both instances under Articles 40 and 45, the marriages are governed
either by absolute community of property13 or conjugal partnership of
gains14 unless the parties agree to a complete separation of property
in a marriage settlement entered into before the marriage. Since the
property relations of the parties is governed by absolute community of
property or conjugal partnership of gains, there is a need to liquidate,
partition and distribute the properties before a decree of annulment
could be issued. That is not the case for annulment of marriage under
Article 36 of the Family Code because the marriage is governed by the
ordinary rules on co-ownership.
In this case, petitioners marriage to respondent was declared void
under Article 3615 of the Family Code and not under Article 40 or 45.
Thus, what governs the liquidation of properties owned in common by
petitioner and respondent are the rules on co-ownership. In Valdes, the
Court ruled that the property relations of parties in a void marriage
during the period of cohabitation is governed either by Article 147 or
Article 148 of the Family Code.16 The rules on co-ownership apply and
the properties of the spouses should be liquidated in accordance with
the Civil Code provisions on co-ownership. Under Article 496 of the
Civil Code, "[p]artition may be made by agreement between the
parties or by judicial proceedings. x x x." It is not necessary to liquidate
the properties of the spouses in the same proceeding for declaration of
nullity of marriage.
WHEREFORE, we AFFIRM the Decision of the trial court with the
MODIFICATION that the decree of absolute nullity of the marriage shall
be issued upon finality of the trial courts decision without waiting for
the liquidation, partition, and distribution of the parties properties
under Article 147 of the Family Code.

hearing, Aguila testified that on 17 April 2007 someone informed her of


the existence of the Discovered Properties. Thereafter, she verified the
information and secured copies of TCTs of the Discovered Properties.
When asked to clarify, Aguila testified that Rubina C. Salas (Rubina) is
Salas common-law wife.11
On 8 February 2008, Salas filed an Opposition to the Manifestation12
alleging that there is no conjugal property to be partitioned based on
Aguilas petition. According to Salas, Aguilas statement was a judicial
admission and was not made through palpable mistake. Salas claimed
that Aguila waived her right to the Discovered Properties. Salas
likewise enumerated properties he allegedly waived in favor of Aguila,
to wit:(1) parcels of land with improvements located in Sugar Landing
Subdivision, Alangilan, Batangas City; No. 176 Brias Street, Nasugbu,
Batangas; P. Samaniego Street, Silangan, Nasugbu, Batangas; and
Batangas City, financed by Filinvest; (2) cash amounting to
P200,000.00; and (3) motor vehicles, specifically Honda City and
Toyota Tamaraw FX(collectively, "Waived Properties"). Thus, Salas
contended that the conjugal properties were deemed partitioned.
The Ruling of the Regional Trial Court
In its 26 September 2008 Order, the RTC ruled in favor of Aguila. The
dispositive portion of the Order reads:
WHEREFORE, foregoing premises being considered, the petitioner and
the respondent are hereby directed to partition between themselves by
proper instruments of conveyance, the following properties, without
prejudice to the legitime of their legitimate child, Joan Jisselle Aguila
Salas:
G.R. No. 202370

September 23, 2013

JUAN SEVILLA SALAS, JR., Petitioner,


vs.
EDEN VILLENA AGUILA, Respondent.
DECISION
CARPIO, J.:
The Case
This petition for review on certiorari1 assails the 16 March 2012
Decision2 and the 28 June 2012 Resolution3 of the Court of Appeals
(CA) in CA-G.R. CV No. 95322. The CA affirmed the 26 September 2008
Order4 of the Regional Trial Court of Nasugbu, Batangas, Branch 14
(RTC), in Civil Case No. 787.
The Facts
On 7 September 1985, petitioner Juan Sevilla Salas, Jr. (Salas) and
respondent Eden Villena Aguila (Aguila) were married. On 7 June 1986,
Aguila gave birth to their daughter, Joan Jiselle. Five months later,
Salas left their conjugal dwelling. Since then, he no longer
communicated with Aguila or their daughter.
On 7 October 2003, Aguila filed a Petition for Declaration of Nullity of
Marriage (petition) citing psychological incapacity under Article 36 of
the Family Code. The petition states that they "have no conjugal
properties whatsoever."5 In the Return of Summons dated 13 October
2003, the sheriff narrated that Salas instructed his mother Luisa Salas
to receive the copy of summons and the petition.6
On 7 May 2007, the RTC rendered a Decision7 declaring the nullity of
the marriage of Salas and Aguila (RTC Decision). The RTC Decision
further provides for the "dissolution of their conjugal partnership of
gains, if any."8
On 10 September 2007, Aguila filed a Manifestation and Motion9
stating that she discovered: (a) two 200-square-meter parcels of land
with improvements located in San Bartolome, Quezon City, covered by
Transfer Certificate of Title (TCT) No. N-259299-A and TCT No. N255497; and (b) a 108-square-meter parcel of land with improvement
located in Tondo, Manila, covered by TCT No. 243373 (collectively,
"Discovered Properties"). The registered owner of the Discovered
Properties is "Juan S.Salas, married to Rubina C. Salas." The
manifestation was set for hearing on 21 September 2007. However,
Salas notice of hearing was returned unserved with the remark, "RTS
Refused To Receive."
On 19 September 2007, Salas filed a Manifestation with Entry of
Appearance10 requesting for an Entry of Judgment of the RTC Decision
since no motion for reconsideration or appeal was filed and no conjugal
property was involved.
On 21 September 2007, the hearing for Aguilas manifestation ensued,
with Aguila, her counsel and the state prosecutor present. During the

(1) A parcel of land registered in the name of Juan S. Salas married to


Rubina C. Salas located in San Bartolome, Quezon City and covered by
TCT No. N-259299-A marked as Exhibit "A" and its improvements;
(2) A parcel of land registered in the name of Juan S.Salas married to
Rubina C. Salas located in San Bartolome, Quezon City and covered by
TCT No. N-255497 marked as Exhibit "B" and its improvements;
(3) A parcel of land registered in the name of Juan S.Salas married to
Rubina Cortez Salas located in Tondo and covered by TCT No. 243373Ind. marked as Exhibit "D" and its improvements.
Thereafter, the Court shall confirm the partition so agreed upon bythe
parties, and such partition, together with the Order of the Court
confirming the same, shall be recorded in the Registry of Deeds of the
place in which the property is situated.
SO ORDERED.13
The RTC held that pursuant to the Rules,14 even upon entry of
judgment granting the annulment of marriage, the court can proceed
with the liquidation, partition and distribution of the conjugal
partnership of gains if it has not been judicially adjudicated upon, as in
this case. The RTC found that the Discovered Properties are among the
conjugal properties to be partitioned and distributed between Salas
and Aguila. However, the RTC held that Salas failed to prove the
existence of the Waived Properties.
On 11 November 2008, Rubina filed a Complaint-in-Intervention,
claiming that: (1) she is Rubina Cortez, a widow and unmarried to
Salas; (2) the Discovered Properties are her paraphernal properties; (3)
Salas did not contribute money to purchase the Discovered Properties
as he had no permanent job in Japan; (4) the RTC did not acquire
jurisdiction over her as she was not a party in the case; and (5) she
authorized her brother to purchase the Discovered Properties but
because he was not well-versed with legal documentation, he
registered the properties in the name of "Juan S. Salas, married to
Rubina C. Salas."
In its 16 December 2009 Order, the RTC denied the Motion for
Reconsideration filed by Salas. The RTC found that Salas failed to prove
his allegation that Aguila transferred the Waived Properties to third
persons. The RTC emphasized that it cannot go beyond the TCTs, which
state that Salas is the registered owner of the Discovered Properties.
The RTC further held that Salas and Rubina were at fault for failing to
correct the TCTs, if they were not married as they claimed.
Hence, Salas filed an appeal with the CA.
The Ruling of the Court of Appeals
On 16 March 2012, the CA affirmed the order of the RTC.15 The CA
ruled that Aguilas statement in her petition is not a judicial admission.
The CA pointed out that the petition was filed on 7 October 2003, but
Aguila found the Discovered Properties only on 17 April 2007 or before
the promulgation of the RTC decision. Thus, the CA concluded that
Aguila was palpably mistaken in her petition and it would be unfair to

punish her over a matter that she had no knowledge of at the time she
made the admission. The CA also ruled that Salas was not deprived of
the opportunity to refute Aguilas allegations in her manifestation, even
though he was not present in its hearing. The CA likewise held that
Rubina cannot collaterally attack a certificate of title.
In a Resolution dated 28 June 2012,16 the CA denied the Motion for
Reconsideration17 filed by Salas. Hence, this petition.
The Issues
Salas seeks a reversal and raises the following issues for resolution:
1. The Court of Appeals erred in affirming the trial courts decision
ordering the partition of the parcels of land covered by TCT Nos. N259299-A and N-255497 in Quezon City and as well as the property in
Manila covered by TCT No. 243373 between petitioner and respondent.
2. The Court of Appeals erred in affirming the trial courts decision in
not allowing Rubina C. Cortez to intervene in this case18
The Ruling of the Court
The petition lacks merit.
Since the original manifestation was an action for partition, this Court
cannot order a division of the property, unless it first makes a
determination as to the existence of a co-ownership.19 Thus, the
settlement of the issue of ownership is the first stage in this action.20
Basic is the rule that the party making an allegation in a civil case has
the burden of proving it by a preponderance of evidence.21 Salas
alleged that contrary to Aguilas petition stating that they had no
conjugal property, they actually acquired the Waived Properties during
their marriage. However, the RTC found, and the CA affirmed, that
Salas failed to prove the existence and acquisition of the Waived
Properties during their marriage:
A perusal of the record shows that the documents submitted by [Salas]
as the properties allegedly registered in the name of [Aguila] are
merely photocopies and not certified true copies, hence, this Court
cannot admit the same as part of the records of this case. These are
the following:
(1) TCT No. T-65876 a parcel of land located at Poblacion, Nasugbu,
Batangas, registered in the name of Eden A. Salas, married to Juan
Salas Jr. which is cancelled by TCT No. T-105443 in the name of Joan
Jiselle A. Salas, single;
(2) TCT No. T-68066 a parcel of land situated in the Barrio of Landing,
Nasugbu, Batangas, registered in the name of Eden A. Salas, married
to Juan S. Salas Jr.
Moreover, [Aguila] submitted original copy of Certification issued by
Ms. Erlinda A. Dasal, Municipal Assessor of Nasugbu, Batangas,
certifying that [Aguila] has no real property (land and improvement)
listed in the Assessment Roll for taxation purposes, as of September
17, 2008.
Such evidence, in the absence of proof to the contrary, has the
presumption of regularity. x x x.
Suffice it to say that such real properties are existing and registered in
the name of [Aguila], certified true copies thereof should have been
the ones submitted to this Court. Moreover, there is also a presumption
that properties registered in the Registry of Deeds are also declared in
the Assessment Roll for taxation purposes.22
On the other hand, Aguila proved that the Discovered Properties were
acquired by Salas during their marriage.1wphi1 Both the RTC and the
CA agreed that the Discovered Properties registered in Salas name
were acquired during his marriage with Aguila. The TCTs of the
Discovered Properties were entered on 2 July 1999 and 29 September
2003, or during the validity of Salas and Aguilas marriage. In
Villanueva v. Court of Appeals,23 we held that the question of whether
the properties were acquired during the marriage is a factual issue.
Factual findings of the RTC, particularly if affirmed by the CA, are
binding on us, except under compelling circumstances not present in
this case.24
On Salas allegation that he was not accorded due process for failing to
attend the hearing of Aguilas manifestation, we find the allegation
untenable. The essence of due process is opportunity to be heard. We
hold that Salas was given such opportunity when he filed his opposition
to the manifestation, submitted evidence and filed his appeal.
On both Salas and Rubinas contention that Rubina owns the
Discovered Properties, we likewise find the contention unmeritorious.

The TCTs state that "Juan S. Salas, married to Rubina C. Salas" is the
registered owner of the Discovered Properties. A Torrens title is
generally a conclusive evidence of the ownership of the land referred
to, because there is a strong presumption that it is valid and regularly
issued.25 The phrase "married to" is merely descriptive of the civil
status of the registered owner.26 Furthermore, Salas did not initially
dispute the ownership of the Discovered Properties in his opposition to
the manifestation. It was only when Rubina intervened that Salas
supported Rubinas statement that she owns the Discovered
Properties.
Considering that Rubina failed to prove her title or her legal interest in
the Discovered Properties, she has no right to intervene in this case.
The Rules of Court provide that only "a person who has a legal interest
in the matter in litigation, or in the success of either of the parties, or
an interest against both, or is so situated as to be adversely affected
by a distribution or other disposition of property in the custody of the
court or of an officer thereof may, with leave of court, be allowed to
intervene in the action."27
In Dio v. Dio,28 we held that Article 147 of the Family Code applies
to the union of parties who are legally capacitated and not barred by
any impediment to contract marriage, but whose marriage is
nonetheless declared void under Article 36 of the Family Code, as in
this case. Article147 of the Family Code provides:
ART. 147. When a man and a woman who are capacitated to marry
each other, live exclusively with each other as husband and wife
without the benefit of marriage or under a void marriage, their wages
and salaries shall be owned by them in equal shares and the property
acquired by both of them through their work or industry shall be
governed by the rules on co-ownership.
In the absence of proof to the contrary, properties acquired while they
lived together shall be presumed to have been obtained by their joint
efforts, work or industry, and shall be owned by them in equal shares.
For purposes of this Article, a party who did not participate in the
acquisition by the other party of any property shall be deemed to have
contributed jointly in the acquisition thereof if the formers efforts
consisted in the care and maintenance of the family and of the
household.
Neither party can encumber or dispose by acts inter vivos of his or her
share in the property acquired during cohabitation and owned in
common, without the consent of the other, until after the termination
of their cohabitation.
When only one of the parties to a void marriage is in good faith, the
share of the party in bad faith in the co-ownership shall be forfeited in
favor of their common children. In case of default of or waiver by any
or all of the common children or their descendants, each vacant share
shall belong to the respective surviving descendants. In the absence of
descendants, such share shall belong to the innocent party. In all
cases, the forfeiture shall take place upon termination of the
cohabitation. (Emphasis supplied)
Under this property regime, property acquired during the marriage is
prima facie presumed to have been obtained through the couples joint
efforts and governed by the rules on co-ownership.29 In the present
case, Salas did not rebut this presumption. In a similar case where the
ground for nullity of marriage was also psychological incapacity, we
held that the properties acquired during the union of the parties, as
found by both the RTC and the CA, would be governed by coownership.30 Accordingly, the partition of the Discovered Properties as
ordered by the RTC and the CA should be sustained, but on the basis of
co-ownership and not on the regime of conjugal partnership of gains.
WHEREFORE, we DENY the petition. We AFFIRM the Decision dated16
March 2012 and the Resolution dated 28 June 2012 of the Court of
Appeals in CA-G.R. CV No. 95322.

son, who was the father of Edilberto U. Ventura, Jr. (Edilberto), the
petitioner in this case.
Evidence shows that Socorro had a prior subsisting marriage to Crispin
Roxas (Crispin) when she married Esteban. Socorro married Crispin on
18 April 1952. This marriage was not annulled, and Crispin was alive at
the time of Socorros marriage to Esteban.
Estebans prior marriage, on the other hand, was dissolved by virtue of
his wifes death in 1960. According to Edilberto, sometime in 1968,
Esteban purchased a portion of a lot situated at 2492 State Alley,
Bonifacio Street, Vitas, Tondo, Manila (Vitas property). The remaining
portion was thereafter purchased by Evangeline on her fathers behalf
sometime in 1970.4 The Vitas property was covered by Transfer
Certificate of Title No. 141782, dated 11 December 1980, issued to
"Esteban Abletes, of legal age, Filipino, married to Socorro Torres."5
Edilberto also claimed that starting 1978, Evangeline and Esteban
operated small business establishments located at 903 and 905 Delpan
Street, Tondo, Manila (Delpan property).6
On 6 September 1997, Esteban sold the Vitas and Delpan properties to
Evangeline and her husband, Paulino Abuda (Paulino).7 According to
Edilberto:
when Esteban was diagnosed with colon cancer sometime in 1993, he
decided to sell the Delpan and Vitas properties to Evangeline.
Evangeline continued paying the amortizations on the two (2)
properties situated in Delpan Street. The amortizations, together with
the amount of Two Hundred Thousand Pesos (Php 200,000.00), which
Esteban requested as advance payment, were considered part of the
purchase price of the Delpan properties. Evangeline likewise gave her
father Fifty Thousand Pesos (Php 50,000.00) for the purchase of the
Vitas properties and she shouldered his medical expenses.8
Esteban passed away on 11 September 1997, while Socorro passed
away on 31 July 1999.
Sometime in 2000, Leonora Urquila (Leonora), the mother of Edilberto,
discovered the sale. Thus, Edilberto, represented by Leonora, filed a
Petition for Annulment of Deeds of Sale before the RTC-Manila.
Edilberto alleged that the sale of the properties was fraudulent
because Estebans signature on the deeds of sale was forged.
Respondents, on the other hand, argued that because of Socorros
prior marriage to Crispin, her subsequent marriage to Esteban was null
and void. Thus, neither Socorro nor her heirs can claim any right or
interest over the properties purchased by Esteban and respondents.9
The Ruling of the RTC-Manila
The RTC-Manila dismissed the petition for lack of merit.
The RTC-Manila ruled that the marriage between Socorro and Esteban
was void from the beginning.10 Article 83 of the Civil Code, which was
the governing law at the time Esteban and Socorro were married,
provides:

G.R. No. 202932

October 23, 2013

EDILBERTO U. VENTURA JR., Petitioner,


vs.
SPOUSES PAULINO and EVANGELINE ABUDA, Respondents.
DECISION
CARPIO, J.:
The Case
This petition for review on certiorari seeks to annul the Decision1 dated
9 March 2012 of the Court of Appeals (CA) in CA-G.R. CV No. 92330 and
the Resolution2 dated 3 August 2012 denying the motion for
reconsideration. The Decision and Resolution dismissed the Appeal
dated 23 October 2009 and affirmed with modification the Decision3
dated 24 November 2008 of the Regional Trial Court of Manila, Branch
32 (RTC-Manila).
The Facts
The RTC-Manila and the CA found the facts to be as follows:
Socorro Torres (Socorro) and Esteban Abletes (Esteban) were married
on 9 June 1980. Although Socorro and Esteban never had common
children, both of them had children from prior marriages: Esteban had
a daughter named Evangeline Abuda (Evangeline), and Socorro had a

Art. 83. Any marriage subsequently contracted by any person during


the lifetime of the first spouse of such person shall be illegal and void
from its performance unless:
1. The first marriage was annulled or dissolved; or
2. The first spouse had been absent for seven consecutive years at the
time of the second marriage without the spouse present having news
of the absentee being alive, or if the absentee, though he has been
absent for less than seven years, is generally considered as dead and
believed to be so by the spouse present at the time of contracting such
subsequent marriage, or if the absentee is presumed dead according
to articles 390 and 391. The marriage so contracted shall be valid in
any of the three cases until declared null and void.
During trial, Edilberto offered the testimony of Socorros daughter-inlaw Conchita Ventura (Conchita). In her first affidavit, Conchita claimed
that Crispin, who was a seaman, had been missing and unheard from
for 35 years. However, Conchita recanted her earlier testimony and
executed an Affidavit of Retraction.11
The RTC-Manila ruled that the lack of a judicial decree of nullity does
not affect the status of the union. It applied our ruling in Nial v.
Badayog:12
Jurisprudence under the Civil Code states that no judicial decree is
necessary in order to establish the nullity of a marriage. x x x
Under ordinary circumstances, the effect of a void marriage, so far as
concerns the conferring of legal rights upon the parties, is as though no
marriage had ever taken place. And therefore, being good for no legal

purpose, its invalidity can be maintained in any proceeding in which


[the] fact of marriage may be material, either direct or collateral, in
any civil court between any parties at any time, whether before or after
the death of either or both the husband and the wife, and upon mere
proof of the facts rendering such marriage void, it will be disregarded
or treated as non-existent by the courts.13

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

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

The foregoing rules on forfeiture shall likewise apply even if both


parties are in bad faith.

Art. 144. When a man and a woman live together as husband and wife,
but they are not married, or their marriage is void from the beginning,
the property acquired by either or both of them through their work or
industry or their wages and salaries shall be governed by the rules on
co-ownership.
Art. 485. The share of the co-owners, in the benefits as well as in the
charges, shall be proportional to their respective interests. Any
stipulation in a contract to the contrary shall be void.
The portions belonging to the co-owners in the co-ownership shall be
presumed equal, unless the contrary is proved.
The RTC-Manila then determined the respective shares of Socorro and
Esteban in the properties. It found that:
with respect to the property located at 2492 State Alley, Bonifacio St.
Vitas, Tondo, Manila covered by TCT No. 141782, formerly Marcos Road,
Magsaysay Village, Tondo, Manila, [Evangeline] declared that part of it
was first acquired by her father Esteban Abletes sometime in 1968
when he purchased the right of Ampiano Caballegan. Then, in 1970,
she x x x bought the right to one-half of the remaining property
occupied by Ampiano Caballegan. However, during the survey of the
National Housing Authority, she allowed the whole lot to be registered
in her fathers name. As proof thereof, she presented Exhibits "8" to
"11" x x x. These documents prove that that she has been an occupant
of the said property in Vitas, Tondo even before her father and Socorro
Torres got married in June, 1980.14
Anent the parcels of land and improvements thereon 903 and 905 Del
Pan Street, Tondo, Manila, x x x Evangeline professed that in 1978,
before her father met Socorro Torres and before the construction of the
BLISS Project thereat, her father [already had] a bodega of canvas
(lona) and a sewing machine to sew the canvas being sold at 903 Del
Pan Street, Tondo Manila. In 1978, she was also operating Vangies
Canvas Store at 905 Del Pan Street, Tondo, Manila, which was
evidenced by Certificate of Registration of Business Name issued in her
favor on 09 November 1998 x x x. When the BLISS project was
constructed in 1980, the property became known as Units D-9 and D10. At first, her father [paid] for the amortizations for these two (2)
parcels of land but when he got sick with colon cancer in 1993, he
asked respondents to continue paying for the amortizations x x x.
[Evangeline] paid a total of P195,259.52 for Unit D-9 as shown by the
37 pieces of receipts x x x and the aggregate amount of P188,596.09
for Unit D-10, as evidenced by 36 receipts x x x.15
The RTC-Manila concluded that Socorro did not contribute any funds for
the acquisition of the properties. Hence, she cannot be considered a
co-owner, and her heirs cannot claim any rights over the Vitas and
Delpan properties.16
Aggrieved, Edilberto filed an appeal before the CA.
The Ruling of the CA
In its Decision17 dated 9 March 2012, the CA sustained the decision of
the RTC-Manila. The dispositive portion of the CA Decision reads:
WHEREFORE, the Appeal is hereby DENIED and the challenged
Decision of the court a quo STANDS.
SO ORDERED.18
The CA ruled, however, that the RTC-Manila should have applied Article
148 of the Family Code, and not Articles 144 and 485 of the Civil Code.
Article 148 of the Family Code states that in unions between a man and
a woman who are incapacitated to marry each other:
x x x only the properties acquired by both of the parties through their
actual joint contribution of money, property, or industry shall be owned
by them in common in proportion to their respective contributions. In
the absence of proof to the contrary, their contributions and
corresponding shares are presumed to be equal. The same rule and
presumption shall apply to joint deposits of money and evidences of
credit.

The CA applied our ruling in Saguid v. Court of Appeals,19 and held


that the foregoing provision applies "even if the cohabitation or the
acquisition of the property occurred before the effectivity of the Family
Code."20 The CA found that Edilberto failed to prove that Socorro
contributed to the purchase of the Vitas and Delpan properties.
Edilberto was unable to provide any documentation evidencing
Socorros alleged contribution.21
On 2 April 2012, Edilberto filed a Motion for Reconsideration,22 which
was denied by the CA in its Resolution dated 3 August 2012.23
Hence, this petition.
The Ruling of this Court
We deny the petition.
Edilberto admitted that in unions between a man and a woman who
are incapacitated to marry each other, the ownership over the
properties acquired during the subsistence of that relationship shall be
based on the actual contribution of the parties. He even quoted our
ruling in Borromeo v. Descallar24 in his petition:
It is necessary for each of the partners to prove his or her actual
contribution to the acquisition of property in order to be able to lay
claim to any portion of it. Presumptions of co-ownership and equal
contribution do not apply.25
This is a reiteration of Article 148 of the Family Code, which the CA
applied in the assailed decision:
Art 148. In cases of cohabitation [wherein the parties are incapacitated
to marry each other], only the properties acquired by both of the
parties through their actual joint contribution of money, property, or
industry shall be owned by them in common in proportion to their
respective contributions. In the absence of proof to the contrary, their
contributions and corresponding shares are presumed to be equal. The
same rule and presumption shall apply to joint deposits of money and
evidences of credit.
If one of the parties is validly married to another, his or her share in the
co-ownership shall accrue to the absolute community or conjugal
partnership existing in such valid marriage. If the party who acted in
bad faith is not validly married to another, his or her share shall be
forfeited in the manner provided in the last paragraph of the preceding
Article.
The foregoing rules on forfeiture shall likewise apply even if both
parties are in bad faith.
Applying the foregoing provision, the Vitas and Delpan properties can
be considered common property if: (1) these were acquired during the
cohabitation of Esteban and Socorro; and (2) there is evidence that the
properties were acquired through the parties actual joint contribution
of money, property, or industry.
Edilberto argues that the certificate of title covering the Vitas property
shows that the parcel of land is co-owned by Esteban and Socorro
because: (1) the Transfer Certificate of Title was issued on 11
December 1980, or several months after the parties were married; and
(2) title to the land was issued to "Esteban Abletes, of legal age,
married to Socorro Torres."26
We disagree. The title itself shows that the Vitas property is owned by
Esteban alone.1wphi1 The phrase "married to Socorro Torres" is
merely descriptive of his civil status, and does not show that Socorro
co-owned the property.27 The evidence on record also shows that
Esteban acquired ownership over the Vitas property prior to his
marriage to Socorro, even if the certificate of title was issued after the
celebration of the marriage. Registration under the Torrens title system
merely confirms, and does not vest title. This was admitted by
Edilberto on page 9 of his petition wherein he quotes an excerpt of our
ruling in Borromeo:
Registration is not a mode of acquiring ownership. It is only a means of
confirming the fact of its existence with notice to the world at large.
Certificates of title are not a source of right. The mere possession of a
title does not make one the true owner of the property. Thus, the mere

fact that respondent has the titles of the disputed properties in her
name does not necessarily, conclusively and absolutely make her the
owner. The rule on indefeasibility of title likewise does not apply to
respondent. A certificate of title implies that the title is quiet, and that
it is perfect, absolute and indefeasible. However, there are well-defined
exceptions to this rule, as when the transferee is not a holder in good
faith and did not acquire the subject properties for a valuable
consideration.
Edilberto claims that Esteban s actual contribution to the purchase of
the Delpan property was not sufficiently proven since Evangeline
shouldered some of the amortizations.28 Thus, the law presumes that
Esteban and Socorro jointly contributed to the acquisition of the Del
pan property.
We cannot sustain Edilberto s claim. Both the RTC-Manila and the CA
found that the Delpan property was acquired prior to the marriage of
Esteban and Socorro.29 Furthermore, even if payment of the purchase
price of the Delpan property was made by Evangeline, such payment
was made on behalf of her father. Article 1238 of the Civil Code
provides:
Art. 1238. Payment made by a third person who does not intend to be
reimbursed by the debtor is deemed to be a donation, which requires
the debtor s consent. But the payment is in any case valid as to the
creditor who has accepted it.
Thus, it is clear that Evangeline paid on behalf of her father, and the
parties intended that the Delpan property would be owned by and
registered under the name of Esteban.
During trial, the Abuda spouses presented receipts evidencing
payments of the amortizations for the Delpan property.1wphi1 On the
other hand, Edilberto failed to show any evidence showing Socorro s
alleged monetary contributions. As correctly pointed out by the CA:
settled is the rule that in civil cases x x x the burden of proof rests
upon the party who, as determined by the pleadings or the nature of
the case, asserts the affirmative of an issue. x x x. Here it is Appellant
who is duty bound to prove the allegations in the complaint which
undoubtedly, he miserably failed to do so.30
WHEREFORE, the petition is DENIED. The Decision dated 9 March 2012
of the Court of Appeals in CA-G.R. CV No. 92330 is AFFIRMED.

ERLINDA A. AGAPAY, petitioner,


vs.
CARLINA (CORNELIA) V. PALANG and HERMINIA P. DELA CRUZ,
respondents.

ROMERO, J.:
Before us is a petition for review of the decision of the Court of Appeals
in CA-G.R. CV No. 24199 entitled "Erlinda Agapay v. Carlina (Cornelia)
Palang and Herminia P. Dela Cruz" dated June 22, 1994 involving the
ownership of two parcels of land acquired during the cohabitation of
petitioner and private respondent's legitimate spouse.
Miguel Palang contracted his first marriage on July 16, 1949 when he
took private respondent Carlina (or Cornelia) Vallesterol as a wife at
the Pozorrubio Roman Catholic Church in Pangasinan. A few months
after the wedding, in October 1949, he left to work in Hawaii. Miguel
and Carlina's only child, Herminia Palang, was born on May 12, 1950.
Miguel returned in 1954 for a year. His next visit to the Philippines was
in 1964 and during the entire duration of his year-long sojourn he
stayed in Zambales with his brother, not in Pangasinan with his wife
and child. The trial court found evidence that as early as 1957, Miguel
had attempted to divorce Carlina in Hawaii. 1 When he returned for
good in 1972, he refused to live with private respondents, but stayed
alone in a house in Pozorrubio, Pangasinan.
On July 15, 1973, the then sixty-three-year-old Miguel contracted his
second marriage with nineteen-year-old Erlinda Agapay, herein
petitioner. 2 Two months earlier, on May 17, 1973, Miguel and Erlinda,
as evidenced by the Deed of Sale, jointly purchased a parcel of
agricultural land located at San Felipe, Binalonan, Pangasinan with an
area of 10,080 square meters. Consequently, Transfer Certificate of
Title No. 101736 covering said rice land was issued in their names.
A house and lot in Binalonan, Pangasinan was likewise purchased on
September 23, 1975, allegedly by Erlinda as the sole vendee. TCT No.
143120 covering said property was later issued in her name.
On October 30, 1975, Miguel and Cornelia Palang executed a Deed of
Donation as a form of compromise agreement to settle and end a case
filed by the latter. 3 The parties therein agreed to donate their conjugal
property consisting of six parcels of land to their only child, Herminia
Palang. 4
Miguel and Erlinda's cohabitation produced a son, Kristopher A. Palang,
born on December 6, 1977. In 1979, Miguel and Erlinda were convicted
of Concubinage upon Carlina's complaint. 5 Two years later, on
February 15, 1981, Miguel died.
On July 11, 1981, Carlina Palang and her daughter Herminia Palang de
la Cruz, herein private respondents, instituted the case at bar, an
action for recovery of ownership and possession with damages against
petitioner before the Regional Trial Court in Urdaneta, Pangasinan (Civil
Case No. U-4265). Private respondents sought to get back the riceland
and the house and lot both located at Binalonan, Pangasinan allegedly
purchased by Miguel during his cohabitation with petitioner.
Petitioner, as defendant below, contended that while the riceland
covered by TCT No. 101736 is registered in their names (Miguel and
Erlinda), she had already given her half of the property to their son
Kristopher Palang. She added that the house and lot covered by TCT
No. 143120 is her sole property, having bought the same with her own
money. Erlinda added that Carlina is precluded from claiming aforesaid
properties since the latter had already donated their conjugal estate to
Herminia.
After trial on the merits, the lower court rendered its decision on June
30, 1989 dismissing the complaint after declaring that there was little
evidence to prove that the subject properties pertained to the conjugal
property of Carlina and Miguel Palang. The lower court went on to
provide for the intestate shares of the parties, particularly of Kristopher
Palang, Miguel's illegitimate son. The dispositive portion of the decision
reads.
WHEREFORE, premises considered, judgment is hereby
rendered
1)

G.R. No. 116668

July 28, 1997

Dismissing the complaint, with costs against plaintiffs;

2)
Confirming the ownership of defendant Erlinda Agapay of the
residential lot located at Poblacion, Binalonan, Pangasinan, as
evidenced by TCT No. 143120, Lot 290-B including the old house
standing therein;

3)
Confirming the ownership of one-half (1/2) portion of that
piece of agricultural land situated at Balisa, San Felipe, Binalonan,
Pangasinan, consisting of 10,080 square meters and as evidenced by
TCT No. 101736, Lot 1123-A to Erlinda Agapay;
4.
Adjudicating to Kristopher Palang as his inheritance from his
deceased father, Miguel Palang, the one-half (1/2) of the agricultural
land situated at Balisa, San Felipe, Binalonan, Pangasinan, under TCT
No. 101736 in the name of Miguel Palang, provided that the former
(Kristopher) executes, within 15 days after this decision becomes final
and executory, a quit-claim forever renouncing any claims to
annul/reduce the donation to Herminia Palang de la Cruz of all conjugal
properties of her parents, Miguel Palang and Carlina Vallesterol Palang,
dated October 30, 1975, otherwise, the estate of deceased Miguel
Palang will have to be settled in another separate action;
5)

No pronouncement as to damages and attorney's fees.

SO ORDERED. 6
On appeal, respondent court reversed the trial court's decision. The
Court of Appeals rendered its decision on July 22, 1994 with the
following dispositive portion;
WHEREFORE, PREMISES CONSIDERED, the appealed decision in hereby
REVERSED and another one entered:
1.
Declaring plaintiffs-appellants the owners of the properties in
question;
2.
Ordering defendant-appellee to vacate and deliver the
properties in question to herein plaintiffs-appellants;
3.
Ordering the Register of Deeds of Pangasinan to cancel
Transfer Certificate of Title Nos. 143120 and 101736 and to issue in
lieu thereof another certificate of title in the name of plaintiffsappellants.
No pronouncement as to costs. 7
Hence, this petition.
Petitioner claims that the Court of Appeals erred in not sustaining the
validity of two deeds of absolute sale covering the riceland and the
house and lot, the first in favor of Miguel Palang and Erlinda Agapay
and the second, in favor of Erlinda Agapay alone. Second, petitioner
contends that respondent appellate court erred in not declaring
Kristopher A. Palang as Miguel Palang's illegitimate son and thus
entitled to inherit from Miguel's estate. Third, respondent court erred,
according to petitioner, "in not finding that there is sufficient pleading
and evidence that Kristopher A. Palang or Christopher A. Palang should
be considered as party-defendant in Civil Case No. U-4625 before the
trial court and in CA-G.R. No. 24199. 8
After studying the merits of the instant case, as well as the pertinent
provisions of law and jurisprudence, the Court denies the petition and
affirms the questioned decision of the Court of Appeals.
The first and principal issue is the ownership of the two pieces of
property subject of this action. Petitioner assails the validity of the
deeds of conveyance over the same parcels of land. There is no
dispute that the transfer of ownership from the original owners of the
riceland and the house and lot, Corazon Ilomin and the spouses
Cespedes, respectively, were valid.
The sale of the riceland on May 17, 1973, was made in favor of Miguel
and Erlinda. The provision of law applicable here is Article 148 of the
Family Code providing for cases of cohabitation when a man and a
woman who are not capacitated to marry each other live exclusively
with each other as husband and wife without the benefit of marriage or
under a void marriage. While Miguel and Erlinda contracted marriage
on July 15, 1973, said union was patently void because the earlier
marriage of Miguel and Carlina was still subsisting and unaffected by
the latter's de facto separation.
Under Article 148, only the properties acquired by both of the parties
through their actual joint contribution of money, property or industry
shall be owned by them in common in proportion to their respective
contributions. It must be stressed that actual contribution is required
by this provision, in contrast to Article 147 which states that efforts in
the care and maintenance of the family and household, are regarded
as contributions to the acquisition of common property by one who has
no salary or income or work or industry. If the actual contribution of the
party is not proved, there will be no co-ownership and no presumption
of equal shares. 9

In the case at bar, Erlinda tried to establish by her testimony that she
is engaged in the business of buy and sell and had a sari-sari store 10
but failed to persuade us that she actually contributed money to buy
the subject riceland. Worth noting is the fact that on the date of
conveyance, May 17, 1973, petitioner was only around twenty years of
age and Miguel Palang was already sixty-four and a pensioner of the
U.S. Government. Considering her youthfulness, it is unrealistic to
conclude that in 1973 she contributed P3,750.00 as her share in the
purchase price of subject property, 11 there being no proof of the
same.
Petitioner now claims that the riceland was bought two months before
Miguel and Erlinda actually cohabited. In the nature of an afterthought,
said added assertion was intended to exclude their case from the
operation of Article 148 of the Family Code. Proof of the precise date
when they commenced their adulterous cohabitation not having been
adduced, we cannot state definitively that the riceland was purchased
even before they started living together. In any case, even assuming
that the subject property was bought before cohabitation, the rules of
co-ownership would still apply and proof of actual contribution would
still be essential.
Since petitioner failed to prove that she contributed money to the
purchase price of the riceland in Binalonan, Pangasinan, we find no
basis to justify her co-ownership with Miguel over the same.
Consequently, the riceland should, as correctly held by the Court of
Appeals, revert to the conjugal partnership property of the deceased
Miguel and private respondent Carlina Palang.
Furthermore, it is immaterial that Miguel and Carlina previously agreed
to donate their conjugal property in favor of their daughter Herminia in
1975. The trial court erred in holding that the decision adopting their
compromise agreement "in effect partakes the nature of judicial
confirmation of the separation of property between spouses and the
termination of the conjugal partnership." 12 Separation of property
between spouses during the marriage shall not take place except by
judicial order or without judicial conferment when there is an express
stipulation in the marriage settlements. 13 The judgment which
resulted from the parties' compromise was not specifically and
expressly for separation of property and should not be so inferred.
With respect to the house and lot, Erlinda allegedly bought the same
for P20,000.00 on September 23, 1975 when she was only 22 years
old. The testimony of the notary public who prepared the deed of
conveyance for the property reveals the falsehood of this claim. Atty.
Constantino Sagun testified that Miguel Palang provided the money for
the purchase price and directed that Erlinda's name alone be placed as
the vendee. 14
The transaction was properly a donation made by Miguel to Erlinda, but
one which was clearly void and inexistent by express provision of law
because it was made between persons guilty of adultery or
concubinage at the time of the donation, under Article 739 of the Civil
Code. Moreover, Article 87 of the Family Code expressly provides that
the prohibition against donations between spouses now applies to
donations between persons living together as husband and wife
without a valid marriage, 15 for otherwise, the condition of those who
incurred guilt would turn out to be better than those in legal union. 16
The second issue concerning Kristopher Palang's status and claim as
an illegitimate son and heir to Miguel's estate is here resolved in favor
of respondent court's correct assessment that the trial court erred in
making pronouncements regarding Kristopher's heirship and filiation
"inasmuch as questions as to who are the heirs of the decedent, proof
of filiation of illegitimate children and the determination of the estate
of the latter and claims thereto should be ventilated in the proper
probate court or in a special proceeding instituted for the purpose and
cannot be adjudicated in the instant ordinary civil action which is for
recovery of ownership and possession." 17
As regards the third issue, petitioner contends that Kristopher Palang
should be considered as party-defendant in the case at bar following
the trial court's decision which expressly found that Kristopher had not
been impleaded as party defendant but theorized that he had
submitted to the court's jurisdiction through his mother/guardian ad
litem. 18 The trial court erred gravely. Kristopher, not having been
impleaded, was, therefore, not a party to the case at bar. His mother,
Erlinda cannot be called his guardian ad litem for he was not involved
in the case at bar. Petitioner adds that there is no need for Kristopher
to file another action to prove that he is illegitimate son of Miguel, in
order to avoid multiplicity of suits. 19 Petitioner's grave error has been
discussed in the preceding paragraph where the need for probate
proceedings to resolve the settlement of Miguel's estate and
Kristopher's successional rights has been pointed out.
WHEREFORE, the instant petition is hereby DENIED. The questioned
decision of the Court of Appeals is AFFIRMED. Costs against petitioner.

G.R. No. 137650

April 12, 2000

GUILLERMA TUMLOS, petitioner,


vs.
SPOUSES MARIO FERNANDEZ and LOURDES FERNANDEZ, respondents.

PANGANIBAN, J.:
Under Article 148 of the Family Code, a man and a woman who are not
legally capacitated to marry each other, but who nonetheless live
together conjugally, may be deemed co-owners of a property acquired
during the cohabitation only upon proof that each made an actual
contribution to its acquisition. Hence, mere cohabitation without proof
of contribution will not result in a co-ownership.
The Case
Before us is a Petition for Review under Rule 45 of the Rules of Court,
assailing the November 19, 1998 Decision of the Court of Appeals 1
(CA), which reversed the October 7, 1997 Order of the Regional Trial
Court (RTC). 2 The dispositive part of the CA Decision reads:
WHEREFORE, the instant petition is GRANTED, and the questioned
orders of the court a quo dated October 7, 1997 and November 11,
1997, are hereby REVERSED and SET ASIDE. The judgment of the court
a quo dated June 5, 1997 is hereby REINSTATED. Costs against the
private respondents.3
The assailed Order of the RTC disposed as follows:
Wherefore, the decision of this Court rendered on June 5, 1997
affirming in toto the appealed judgment of the [MTC] is hereby
reconsidered and a new one is entered reversing said decision of the
[MTC] and dismissing the complaint in the above-entitled case. 4
Petitioner also assails the February 14, 1999 CA Resolution denying the
Motion for Reconsideration.
The Facts
The Court of Appeals narrates the facts as follows:
[Herein respondents] were the plaintiffs in Civil Case No. 6756, an
action for ejectment filed before Branch 82 of the MTC of Valenzuela,
Metro Manila against [herein Petitioner] Guillerma Tumlos, Toto Tumlos,
and Gina Tumlos. In their complaint dated July 5, 1996, the said
spouses alleged that they are the absolute owners of an apartment
building located at ARTE SUBDIVISION III, Lawang Bato, Valenzuela,
Metro Manila; that through tolerance they had allowed the defendantsprivate respondents to occupy the apartment building for the last
seven (7) years, since 1989, without the payment of any rent; that it
was agreed upon that after a few months, defendant Guillerma Tumlos
will pay P1,600.00 a month while the other defendants promised to pay
P1,000.00 a month, both as rental, which agreement was not complied
with by the said defendants; that they have demanded several times
[that] the defendants . . . vacate the premises, as they are in need of
the property for the construction of a new building; and that they have
also demanded payment of P84,000.00 from Toto and Gina Tumlos
representing rentals for seven (7) years and payment of P143,600.00
from Guillerma Tumlos as unpaid rentals for seven (7) years, but the
said demands went unheeded. They then prayed that the defendants
be ordered to vacate the property in question and to pay the stated
unpaid rentals, as well as to jointly pay P30,000.00 in attorneys fees.

[Petitioner] Guillerma Tumlos was the only one who filed an answer to
the complaint. She averred therein that the Fernandez spouses had no
cause of action against her, since she is a co-owner of the subject
premises as evidenced by a Contract to Sell wherein it was stated that
she is a co-vendee of the property in question together with
[Respondent] Mario Fernandez. She then asked for the dismissal of the
complaint.
After an unfruitful preliminary conference on November 15, 1996, the
MTC required the parties to submit their affidavits and other evidence
on the factual issues defined in their pleadings within ten (10) days
from receipt of such order, pursuant to section 9 of the Revised Rule on
Summary Procedure. [Petitioner] Guillerma Tumlos submitted her
affidavit/position paper on November 29, 1996, while the [respondents]
filed their position paper on December 5, 1996, attaching thereto their
marriage contract, letters of demand to the defendants, and the
Contract to Sell over the disputed property. The MTC thereafter
promulgated its judgment on January 22, 1997[.]
xxx

xxx

xxx

Upon appeal to the [RTC], [petitioner and the two other] defendants
alleged in their memorandum on appeal that [Respondent] Mario
Fernandez and [Petitioner] Guillerma had an amorous relationship, and
that they acquired the property in question as their "love nest." It was
further alleged that they lived together in the said apartment building
with their two (2) children for around ten (10) years, and that Guillerma
administered the property by collecting rentals from the lessees of the
other apartments, until she discovered that [Respondent Mario]
deceived her as to the annulment of his marriage. It was also during
the early part of 1996 when [Respondent Mario] accused her of being
unfaithful and demonstrated his baseless [jealousy].
In the same memorandum, [petitioner and the two other] defendants
further averred that it was only recently that Toto Tumlos was
temporarily accommodated in one of the rooms of the subject
premises while Gina Tumlos acted as a nanny for the children. In short,
their presence there [was] only transient and they [were] not tenants
of the Fernandez spouses.
On June 5, 1997, the [RTC] rendered a decision affirming in toto the
judgment of the MTC.
The [petitioner and the two other defendants] seasonably filed a
motion for reconsideration on July 3, 1997, alleging that the decision of
affirmance by the RTC was constitutionally flawed for failing to point
out distinctly and clearly the findings of facts and law on which it was
based vis--vis the statements of issues they have raised in their
memorandum on appeal. They also averred that the Contract to Sell
presented by the plaintiffs which named the buyer as "Mario P.
Fernandez, of legal age, married to Lourdes P. Fernandez," should not
be given credence as it was falsified to appear that way. According to
them, the Contract to Sell originally named "Guillerma Fernandez" as
the spouse of [Respondent Mario]. As found by the [RTC] in its
judgment, a new Contract to Sell was issued by the sellers naming the
[respondents] as the buyers after the latter presented their marriage
contract and requested a change in the name of the vendee-wife. Such
facts necessitate the conclusion that Guillerma was really a co-owner
thereof, and that the [respondents] manipulated the evidence in order
to deprive her of her rights to enjoy and use the property as recognized
by law.
xxx

xxx

xxx

The [RTC], in determining the question of ownership in order to resolve


the issue of possession, ruled therein that the Contract to Sell
submitted by the Fernandez spouses appeared not to be authentic, as
there was an alteration in the name of the wife of [Respondent] Mario
Fernandez. Hence, the contract presented by the [respondents] cannot
be given any weight. The court further ruled that Guillerma and
[Respondent Mario] acquired the property during their cohabitation as
husband and wife, although without the benefit of marriage. From such
findings, the court concluded that [Petitioner] Guillerma Tumlos was a
co-owner of the subject property and could not be ejected therefrom.
The [respondents] then filed a motion for reconsideration of the order
of reversal, but the same was denied by the [RTC]. 5
As earlier stated, the CA reversed the RTC. Hence, this Petition filed by
Guillerma Tumlos only. 6
Ruling of the Court of Appeals
The CA rejected petitioner's claim that she and Respondent Mario
Fernandez were co-owners of the disputed property. The CA ruled:

From the inception of the instant case, the only defense presented by
private respondent Guillerma is her right as a co-owner of the subject
property[.]
xxx

xxx

xxx

This claim of co-ownership was not satisfactorily proven by Guillerma,


as correctly held by the trial court. No other evidence was presented to
validate such claim, except for the said affidavit/position paper. As
previously stated, it was only on appeal that Guillerma alleged that she
cohabited with the petitioner-husband without the benefit of marriage,
and that she bore him two (2) children. Attached to her memorandum
on appeal are the birth certificates of the said children. Such
contentions and documents should not have been considered by the . .
. (RTC), as they were not presented in her affidavit/position paper
before the trial court (MTC).
xxx

xxx

xxx

However, even if the said allegations and documents could be


considered, the claim of co-ownership must still fail. As [herein
Respondent] Mario Fernandez is validly married to [Respondent]
Lourdes Fernandez (as per Marriage Contract dated April 27, 1968, p.
45, Original Record), Guillerma and Mario are not capacitated to marry
each other. Thus, the property relations governing their supposed
cohabitation is that found in Article 148 of Executive Order No. 209, as
amended, otherwise known as the Family Code of the Philippines[.]
xxx

xxx

xxx

It is clear that actual contribution is required by this provision, in


contrast to Article 147 of the Family Code which states that efforts in
the care and maintenance of the family and household are regarded as
contributions to the acquisition of common property by one who has no
salary or income or work or industry (Agapay v. Palang, 276 SCRA 340).
The care given by one party [to] the home, children, and household, or
spiritual or moral inspiration provided to the other, is not included in
Article 148 (Handbook on the Family Code of the Philippines by Alicia V.
Sempio-Diy, 1988 ed., p. 209). Hence, if actual contribution of the
party is not proved, there will be no co-ownership and no presumption
of equal shares (Agapay, supra at p. 348, citing Commentaries and
Jurisprudence on the Civil Code of the Philippines Volume I by Arturo M.
Tolentino, 1990 ed., p. 500).
In the instant case, no proof of actual contribution by Guillerma Tumlos
in the purchase of the subject property was presented. Her only
evidence was her being named in the Contract to Sell as the wife of
[Respondent] Mario Fernandez. Since she failed to prove that she
contributed money to the purchase price of the subject apartment
building, We find no basis to justify her co-ownership with [Respondent
Mario]. The said property is thus presumed to belong to the conjugal
partnership property of Mario and Lourdes Fernandez, it being acquired
during the subsistence of their marriage and there being no other proof
to the contrary (please see Article 116 of the Family Code).
The court a quo (RTC) also found that [Respondent Mario] has two (2)
children with Guillerma who are in her custody, and that to eject them
from the apartment building would be to run counter with the
obligation of the former to give support to his minor illegitimate
children, which indispensably includes dwelling. As previously
discussed, such finding has no leg to stand on, it being based on
evidence presented for the first time on appeal.
xxx

xxx

xxx

Even assuming arguendo that the said evidence was validly presented,
the RTC failed to consider that the need for support cannot be
presumed. Article 203 of the Family Code expressly provides that the
obligation to give support shall be demandable from the time the
person who has a right to receive the same needs it for maintenance,
but it shall not be paid except from the date of judicial or extrajudicial
demand. . . .1wphi1.nt
In contrast to the clear pronouncement of the Supreme Court, the RTC
instead presumed that Guillerma and her children needed support from
[Respondent Mario]. Worse, it relied on evidence not properly
presented before the trial court (MTC).
With regard to the other [defendants], Gina and Toto Tumlos, a close
perusal of the records shows that they did not file any responsive
pleading. Hence, judgment may be rendered against them as may be
warranted by the facts alleged in the complaint and limited to what is
prayed for therein, as provided for in Section 6 of the Revised Rules on
Summary Procedure. There was no basis for the public respondent to
dismiss the complaint against them. 7 (emphasis in the original)
The Issues

In her Memorandum, petitioner submits the following issues for the


consideration of the Court:
I. The Court of Appeals gravely erred and abused its discretion in not
outrightly dismissing the petition for review filed by respondents.
II. The Court of Appeals erred in finding that petitioner is not the coowner of the property in litis.
III. Corollary thereto, the Court of Appeals erred in applying Art. 148 of
the Family Code in the case at bar.
IV. The Court of Appeals erred in disregarding the substantive right of
support vis--vis the remedy of ejectment resorted to by respondents.
8
In resolving this case, we shall answer two questions: (a) Is the
petitioner a co-owner of the property? (b) Can the claim for support bar
this ejectment suit? We shall also discuss these preliminary matters:
(a) whether the CA was biased in favor of respondents and (b) whether
the MTC had jurisdiction over the ejectment suit.
The Courts Ruling
The Petition has no merit.
Preliminary Matters
Petitioner submits that the CA exhibited partiality in favor of herein
respondents. This bias, she argues, is manifest in the following:
1. The CA considered the respondents Petition for Review 9 despite
their failure to attach several pleadings as well as the explanation for
the proof of service, despite the clear mandate of Section 11 10 of Rule
13 of the Revised Rules of Court and despite the ruling in Solar Team
Entertainment, Inc. v. Ricafort. 11
2. It allowed respondents to submit the pleadings that were not
attached.
3. It considered respondents' Reply dated May 20, 1998, which had
allegedly been filed out of time.
4. It declared that the case was submitted for decision without first
determining whether to give due course to the Petition, pursuant to
Section 6, Rule 42 of the Rules of Court. 12
The CA, for its part, succinctly dismissed these arguments in this wise:
It is too late in the day now to question the alleged procedural error
after we have rendered the decision. More importantly, when the
private respondent filed their comment to the petition on April 26,
1998, they failed to question such alleged procedural error. Neither
have they questioned all the resolutions issued by the Court after their
filing of such comment. They should, therefore, be now considered in
estoppel to question the same. 13
We agree with the appellate court. Petitioner never raised these
matters before the CA. She cannot be allowed now to challenge its
Decision on grounds of alleged technicalities being belatedly raised as
an afterthought. In this light, she cannot invoke Solar 14 because she
never raised this issue before the CA.
More important, we find it quite sanctimonious indeed on petitioners
part to rely, on the one hand, on these procedural technicalities to
overcome the appealed Decision and, on the other hand, assert that
the RTC may consider the new evidence she presented for the first
time on appeal. Such posturing only betrays the futility of petitioner's
assertion, if not its absence of merit.
One other preliminary matter. Petitioner implies that the court of origin,
the Municipal Trial Court (MTC), did not have jurisdiction over the
"nature of the case," alleging that the real question involved is one of
ownership. Since the issue of possession cannot be settled without
passing upon that of ownership, she maintains that the MTC should
have dismissed the case.
This contention is erroneous. The issue of ownership may be passed
upon by the MTC to settle the issue of possession. 15 Such disposition,
however, is not final insofar as the issue of ownership is concerned, 16
which may be the subject of another proceeding brought specifically to
settle that question.
Having resolved these preliminary matters, we now move on to
petitioners substantive contentions.
First Issue:

Petitioner as Co-owner
Petitioners central theory and main defense against respondents'
action for ejectment is her claim of co-ownership over the property
with Respondent Mario Fernandez. At the first instance before the MTC,
she presented a Contract to Sell indicating that she was his spouse.
The MTC found this document insufficient to support her claim. The
RTC, however, after considering her allegation that she had been
cohabiting with Mario Fernandez as shown by evidence presented
before it, 17 ruled in her favor.
On the other hand, the CA held that the pieces of evidence adduced
before the RTC could no longer be considered because they had not
been submitted before the MTC. Hence, the appellate court concluded
that "[t]he claim of co-ownership was not satisfactorily proven . . ." 18
We agree with the petitioner that the RTC did not err in considering the
evidence presented before it. Nonetheless, we reject her claim that she
was a co-owner of the disputed property.
Evidence Presented on
Appeal Before the RTC
In ruling that the RTC erred in considering on appeal the evidence
presented by petitioner, the CA relied on the doctrine that issues not
raised during trial could not be considered for the first time during
appeal. 19
We disagree. In the first place, there were no new matters or issues
belatedly raised during the appeal before the RTC. The defense invoked
by petitioner at the very start was that she was a co-owner. To support
her claim, she presented a Contract to Sell dated November 14, 1986,
which stated that Mario Fernandez was legally married to her. The
allegation that she was cohabiting with him was a mere elaboration of
her initial theory.
In the second place, procedural rules are generally premised on
considerations of fair play. Respondents never objected when the
assailed evidence was presented before the RTC. Thus, they cannot
claim unfair surprise or prejudice.
Petitioner Not a Co-Owner Under
Article 144 of the Civil Code
Even considering the evidence presented before the MTC and the RTC,
we cannot accept petitioner's submission that she is a co-owner of the
disputed property pursuant to Article 144 of the Civil Code. 20 As
correctly held by the CA, the applicable law is not Article 144 of the
Civil Code, but Article 148 of the Family Code which provides:
Art. 148. In cases of cohabitation not falling under the preceding
Article,21 only the properties acquired by both of the parties through
their actual joint contribution of money, property, or industry shall be
owned by them in common in proportion to their respective
contributions. In the absence of proof to the contrary, their
contributions and corresponding shares are presumed to be equal. The
same rule and presumption shall apply to joint deposits of money and
evidences of credit.
If one of the parties is validly married to another, his or her share in the
co-ownership shall accrue to the absolute community or conjugal
partnership existing in such valid marriage. If the party who acted in
bad faith is not validly married to another, his or her share shall be
forfeited in the manner provided in the last paragraph of the preceding
Article.
The foregoing rules on forfeiture shall likewise apply even if both
parties are in bad faith.
Art. 144 of the Civil Code applies only to a relationship between a man
and a woman who are not incapacitated to marry each other, 22 or to
one in which the marriage of the parties is void 23 from the beginning.
24 It does not apply to a cohabitation that amounts to adultery or
concubinage, for it would be absurd to create a co-ownership where
there exists a prior conjugal partnership or absolute community
between the man and his lawful wife. 25
Based on evidence presented by respondents, as well as those
submitted by petitioner herself before the RTC, it is clear that Mario
Fernandez was incapacitated to marry petitioner because he was
legally married to Lourdes Fernandez. It is also clear that, as readily
admitted by petitioner, she cohabited with Mario in a state of
concubinage. Therefore, Article 144 of the Civil Code is inapplicable.
As stated above, the relationship between petitioner and Respondent
Mario Fernandez is governed by Article 148 of the Family Code. Justice
Alicia V. Sempio-Diy points out 26 that "[t]he Family Code has filled the
hiatus in Article 144 of the Civil Code by expressly regulating in its

Article 148 the property relations of couples living in a state of adultery


or concubinage.
Hence, petitioners argument that the Family Code is inapplicable
because the cohabitation and the acquisition of the property occurred
before its effectivity deserves scant consideration. Suffice it to say
that the law itself states that it can be applied retroactively if it does
not prejudice vested or acquired rights. 27 In this case, petitioner failed
to show any vested right over the property in question. Moreover, to
resolve similar issues, we have applied Article 148 of the Family Code
retroactively. 28
No Evidence of Actual Joint
Contribution
Another consideration militates against petitioners claim that she is a
co-owner of the property. In Agapay, 29 the Court ruled:
Under Article 148, only the properties acquired by both of the parties
through their actual joint contribution of money, property or industry
shall be owned by them in common in proportion to their respective
contributions. It must be stressed that the actual contribution is
required by this provision, in contrast to Article 147 which states that
efforts in the care and maintenance of the family and household, are
regarded as contributions to the acquisition of common property by
one who has no salary or income or work or industry. If the actual
contribution of the party is not proved, there will be no co-ownership
and no presumption of equal shares. (emphasis ours)
In this case, petitioner fails to present any evidence that she had made
an actual contribution to purchase the subject property. Indeed, she
anchors her claim of co-ownership merely on her cohabitation with
Respondent Mario Fernandez.
Likewise, her claim of having administered the property during the
cohabitation is unsubstantiated. In any event, this fact by itself does
not justify her claim, for nothing in Article 148 of the Family Code
provides that the administration of the property amounts to a
contribution in its acquisition.
Clearly, there is no basis for petitioners claim of co-ownership. The
property in question belongs to the conjugal partnership of
respondents. Hence, the MTC and the CA were correct in ordering the
ejectment of petitioner from the premises.
Second Issue:
Support versus Ejectment
Petitioner contends that since Respondent Mario Fernandez failed to
repudiate her claim regarding the filiation of his alleged sons, Mark Gil
and Michael Fernandez, his silence on the matter amounts to an
admission. Arguing that Mario is liable for support, she advances the
theory that the childrens right to support, which necessarily includes
shelter, prevails over the right of respondents to eject her.
We disagree. It should be emphasized that this is an ejectment suit
whereby respondents seek to exercise their possessory right over their
property. It is summary in character and deals solely with the issue of
possession of the property in dispute. Here, it has been shown that
they have a better right to possess it than does the petitioner, whose
right to possess is based merely on their tolerance.1wphi1.nt
Moreover, Respondent Mario Fernandez' alleged failure to repudiate
petitioner's claim of filiation is not relevant to the present
case.1wphi1 Indeed, it would be highly improper for us to rule on such
issue. Besides, it was not properly taken up below. 30 In any event,
Article 298 31 of the Civil Code requires that there should be an
extrajudicial demand. 32 None was made here. The CA was correct
when it said:
Even assuming arguendo that the said evidence was validly presented,
the RTC failed to consider that the need for support cannot be
presumed. Article [298] of the [New Civil Code] expressly provides that
the obligation to give support shall be demandable from the time the
person who has a right to receive the same need it for maintenance,
but it shall not be paid except from the date of judicial and extrajudicial
demand. 33
WHEREFORE, the Petition is DENIED and the appealed Decision
AFFIRMED. Costs against petitioner.

G.R. No. 136803


June 16, 2000
EUSTAQUIO MALLILIN, JR., petitioner,
vs.
MA. ELVIRA CASTILLO, respondent.
MENDOZA, J.:
This is a petition for review of the amended decision1 of the Court of
Appeals dated May 7, 1998 in CA G.R. CV No. 48443 granting
respondent's motion for reconsideration of its decision dated
November 7, 1996, and of the resolution dated December 21, 1998
denying petitioner's motion for reconsideration.
The factual and procedural antecedents are as follows:
On February 24, 1993, petitioner Eustaquio Mallilin, Jr. filed a
complaint2 for "Partition and/or Payment of Co-Ownership Share,
Accounting and Damages" against respondent Ma. Elvira Castillo. The
complaint, docketed as Civil Case No. 93-656 at the Regional Trial
Court in Makati City, alleged that petitioner and respondent, both
married and with children, but separated from their respective
spouses, cohabited after a brief courtship sometime in 1979 while their
respective marriages still subsisted. During their union, they set up the
Superfreight Customs Brokerage Corporation, with petitioner as
president and chairman of the board of directors, and respondent as

vice-president and treasurer. The business flourished and petitioner


and respondent acquired real and personal properties which were
registered solely in respondent's name. In 1992, due to irreconcilable
differences, the couple separated. Petitioner demanded from
respondent his share in the subject properties, but respondent refused
alleging that said properties had been registered solely in her name.

held that even if the parties really had cohabited, the action for
partition could not be allowed because an action for partition among
co-owners ceases to be so and becomes one for title if the defendant,
as in the present case, alleges exclusive ownership of the properties in
question. For these reasons, the trial court dismissed Civil Case No. 93656.

In her Amended Answer,3 respondent admitted that she engaged in


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

On appeals, the Court of Appeals on November 7, 1996, ordered the


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

On November 25, 1994, respondent filed a Motion for Summary


Judgment,4 in accordance with Rule 34 of the Rules of Court.5 She
contended that summary judgment was proper, because the issues
raised in the pleadings were sham and not genuine, to wit:
A.
The main issue is Can plaintiff validly claim the partition and/or
payment of co-ownership share, accounting and damages, considering
that plaintiff and defendant are admittedly both married to their
respective spouses under still valid and subsisting marriages, even
assuming as claimed by plaintiff, that they lived together as husband
and wife without benefit of marriage? In other words, can the parties
be considered as co-owners of the properties, under the law,
considering the present status of the parties as both married and
incapable of marrying each other, even assuming that they lived
together as husband and wife (?)
B.
As a collateral issue, can the plaintiff be considered as an unregistered
co-owner of the real properties under the Transfer Certificates of Title
duly registered solely in the name of defendant Ma. Elvira Castillo? This
issue is also true as far as the motor vehicles in question are
concerned which are also registered in the name of defendant.6
On the first point, respondent contended that even if she and
petitioner actually cohabited, petitioner could not validly claim a part
of the subject real and personal properties because Art. 144 of the Civil
Code, which provides that the rules on co-ownership shall govern the
properties acquired by a man and a woman living together as husband
and wife but not married, or under a marriage which is void ab initio,
applies only if the parties are not in any way incapacitated to contract
marriage.7 In the parties' case, their union suffered the legal
impediment of a prior subsisting marriage. Thus, the question of fact
being raised by petitioner, i.e., whether they lived together as husband
and wife, was irrelevant as no co-ownership could exist between them.
As to the second issue, respondent maintained that petitioner cannot
be considered an unregistered co-owner of the subject properties on
the ground that, since titles to the land are solely in her name, to grant
petitioner's prayer would be to allow a collateral attack on the validity
of such titles.
Petitioner opposed respondent's Motion for Summary Judgment.8 He
contended that the case presented genuine factual issues and that Art.
144 of the Civil Code had been repealed by the Family Code which now
allows, under Art. 148, a limited co-ownership even though a man and
a woman living together are not capacitated to marry each other.
Petitioner also asserted that an implied trust was constituted when he
and respondent agreed to register the properties solely in the latter's
name although the same were acquired out of the profits made from
their brokerage business. Petitioner invoked the following provisions of
the Civil Code:
Art. 1452. If two or more persons agree to purchase property and by
common consent the legal title is taken in the name of one of them for
the benefit of all, a trust is created by force of law in favor of the others
in proportion to the interest of each.
Art. 1453. When the property is conveyed to a person in reliance upon
his declared intention to hold it for, or transfer it to another grantor,
there is an implied trust in favor of the person whose benefit is
contemplated.
On January 30, 1995, the trial court rendered its decision9 granting
respondent's motion for summary judgment. It ruled that an
examination of the pleadings shows that the issues involved were
purely legal. The trial court also sustained respondent's contention that
petitioner's action for partition amounted to a collateral attack on the
validity of the certificates of title covering the subject properties. It

Respondent moved for reconsideration of the decision of Court of


Appeals. On May 7, 1998, nearly two years after its first decision, the
Court of Appeals granted respondent's motion and reconsidered its
prior decision. In its decision now challenged in the present petition, it
held
Prefatorily, and to better clarify the controversy on whether this suit is
a collateral attack on the titles in issue, it must be underscored that
plaintiff-appellant alleged in his complaint that all the nine (9) titles are
registered in the name of defendant-appellee, Ma. Elvira T. Castillo,
except one which appears in the name of Eloisa Castillo (see par. 9,
Complaint). However, a verification of the annexes of such initiatory
pleading shows some discrepancies, to wit:
1.
2.
3.
4.
5.
6.
7.
8.
9.

TCT
TCT
TCT
TCT
TCT
TCT
TCT
TCT
TCT

No.
No.
No.
No.
No.
No.
No.
No.
No.

149046 (Annex A) = Elvira T. Castillo, single


168208 (Annex B) = do
37046 (Annex C) = do
37047 (Annex D) = do
37048 (Annex E) = do
30368 (Annex F) = Steelhaus Realty & Dev. Corp.
30369 (Annex G) = do
30371 (Annex F) = do
(92323) 67881 (Annex I) = Eloisa Castillo

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


of the real properties covered by the above listed titles and eventually
for their partition [par. (a), Prayer; p. 4 Records]. Notably, in order to
achieve such prayer for a joint co-ownership declaration, it is
unavoidable that the individual titles involved be altered, changed,
cancelled or modified to include therein the name of the appellee as a
registered 1/2 co-owner. Yet, no cause of action or even a prayer is
contained filed. Manifestly, absent any cause or prayer for the
alteration, cancellation, modification or changing of the titles involved,
the desired declaration of co-ownership and eventual partition will
utterly be an indirect or collateral attack on the subject titled in this
suit.
It is here that We fell into error, such that, if not rectified will surely
lead to a procedural lapse and a possible injustice. Well settled is the
rules that a certificate of title cannot be altered, modified or cancelled
except in a direct proceeding in accordance with law.
In this jurisdiction, the remedy of the landowner whose property has
been wrongfully or erroneously registered in another name is, after one
year from the date of the decree, not to set aside the decree, but
respecting it as incontrovertible and no longer open to review, to bring
an action for reconveyance or, if the property had passed into the
hands of an innocent purchaser for value, for damages. Verily, plaintiffappellant should have first pursued such remedy or any other relief
directly attacking the subject titles before instituting the present
partition suit. Apropos, the case at bench appears to have been
prematurely filed.
Lastly, to grant the partition prayed for by the appellant will in effect
rule and decide against the properties registered in the names of
Steelhouse Realty and Development Corporation and Eloisa Castillo,
who are not parties in the case. To allow this to happen will surely
result to injustice and denial of due process of law. . . . 11

Petitioner moved for reconsideration but his motion was denied by the
Court of Appeals in its resolution dated December 21, 1998. Hence this
petition.
Petitioner contends that: (1) the Court of Appeals, in its first decision of
November 7, 1996, was correct in applying the Roque ruling and in
rejecting respondent's claim that she was the sole owner of the subject
properties and that the partition suit was a collateral attack on the
titles; (2) the Court of Appeals correctly rules in its first decision that
Art. 148 of the Family Code governs the co-ownership between the
parties, hence, the complaint for partition is proper; (3) with respect to
the properties registered in the name of Steelhouse Realty, respondent
admitted ownership thereof and, at the very least, these properties
could simply be excluded and the partition limited to the remaining
real and personal properties; and (4) the Court of Appeals erred in not
holding that under the Civil Code, there is an implied trust in his favor.
12
The issue in this case is really whether summary judgment, in
accordance with Rule 35 of the Rules of Court, is proper. We rule in the
negative.
First. Rule 35, 3 of the Rules of Court provides that summary judgment
is proper only when, based on the pleadings, depositions, and
admissions on file, and after summary hearing, it is shown that except
as to the amount of damages, there is no veritable issue regarding any
material fact in the action and the movant is entitled to judgment as a
matter of law. 1 Conversely, where the pleadings tender a genuine
issue, i.e., an issue of fact the resolution of which calls for the
presentation of evidence, as distinguished from an issue which is
sham, fictitious, contrived, set-up in bad faith, or patently
unsubstantial, summary judgment is not proper. 14
In the present case, we are convinced that genuine issues exist.
Petitioner anchors his claim of co-ownership on two factual grounds:
first, that said properties were acquired by him and respondent during
their union from 1979 to 1992 from profits derived from their
brokerage business; and second, that said properties were registered
solely in respondent's name only because they agreed to that
arrangement, thereby giving rise to an implied trust in accordance with
Art. 1452 and Art. 1453 of the Civil Code. These allegations are denied
by respondent. She denies that she and petitioner lived together as
husband and wife. She also claims that the properties in question were
acquired solely by her with her own money and resources. With such
conflicting positions, the only way to ascertain the truth is obviously
through the presentation of evidence by the parties.
The trial court ruled that it is immaterial whether the parties actually
lived together as husband and wife because Art. 144 of the Civil Code
can not be made to apply to them as they were both incapacitated to
marry each other. Hence, it was impossible for a co-ownership to exist
between them.
We disagree.
Art. 144 of the Civil Code provides:
When a man and a woman live together as husband and wife, but they
are not married, or their marriage is void from the beginning, the
property acquired by either or both of them through their work or
industry or their wages and salaries shall be governed by the rules on
co-ownership.
This provision of the Civil Code, applies only to cases in which a man
and a woman live together as husband and wife without the benefit of
marriage provided they are not incapacitated or are without
impediment to marry each other, 15 or in which the marriage is void ab
initio, provided it is not bigamous. Art. 144, therefore, does not cover
parties living in an adulterous relationship. However, Art. 148 of the
Family Code now provides for a limited co-ownership in cases where
the parties in union are incapacitated to marry each other. It states:
In cases of cohabitation not falling under the preceding article, 16 only
the properties acquired by both of the parties through their actual joint
contribution of money, property or industry shall be owned by them in
common in proportion to their respective contributions. In the absence
of proof to the contrary, their contributions and corresponding shares
are presumed to be equal. The same rule and presumption shall apply
to joint deposits of money and evidences of credits.
If one of the parties is validly married to another, his or her share in the
co-ownership shall accrue to the absolute community or conjugal
partnership existing in such valid marriage. If the party who acted in
bad faith is not validly married to another, his or her share shall be
forfeited in the manner provided in the last paragraph of the preceding
article.
The foregoing rules on forfeiture shall likewise apply even if both
parties are in bad faith.

It was error for the trial court to rule that, because the parties in this
case were not capacitated to marry each other at the time that they
were alleged to have been living together, they could not have owned
properties in common. The Family Code, in addition to providing that a
co-ownership exists between a man and a woman who live together as
husband and wife without the benefit of marriage, likewise provides
that, if the parties are incapacitated to marry each other, properties
acquired by them through their joint contribution of money, property or
industry shall be owned by them in common in proportion to their
contributions which, in the absence of proof to the contrary, is
presumed to be equal. There is thus co-ownership eventhough the
couple are not capacitated to marry each other.
In this case, there may be a co-ownership between the parties herein.
Consequently, whether petitioner and respondent cohabited and
whether the properties involved in the case are part of the alleged coownership are genuine and material. All but one of the properties
involved were alleged to have been acquired after the Family Code
took effect on August 3, 1988. With respect to the property acquired
before the Family Code took effect if it is shown that it was really
acquired under the regime of the Civil Code, then it should be
excluded.
Petitioner also alleged in paragraph 7 of his complaint that:
Due to the effective management, hardwork and enterprise of plaintiff
assisted by defendant, their customs brokerage business grew and out
of the profits therefrom, the parties acquired real and personal
properties which were, upon agreement of the parties, listed and
registered in defendant's name with plaintiff as the unregistered coowner of all said properties. 17
On the basis of this, he contends that an implied trust existed pursuant
to Art. 1452 of the Civil Code which provides that "(I)f two or more
persons agree to purchase property and by common consent the legal
title is taken in the name of one of them for the benefit of all, a trust is
created by force of law in favor of the others in proportion to the
interest of each." We do not think this is correct. The legal relation of
the parties is already specifically covered by Art. 148 of the Family
Code under which all the properties acquired by the parties out of their
actual joint contributions of money, property or industry shall
constitute a co-ownership. Co-ownership is a form of trust and every
co-owner is a trustee for the other. 18 The provisions of Art. 1452 and
Art. 1453 of the Civil Code, then are no longer material since a trust
relation already inheres in a co-ownership which is governed under
Title III, Book II of the Civil Code.
Second. The trial court likewise dismissed petitioner's action on the
ground that the same amounted to a collateral attack on the
certificates of title involved. As already noted, at first, the Court of
Appeals ruled that petitioner's action does not challenge the validity of
respondent's titles. However, on reconsideration, it reversed itself and
affirmed the trial court. It noted that petitioner's complaint failed to
include a prayer for the alteration, cancellation, modification, or
changing of the titles involved. Absent such prayer, the appellate court
ruled that a declaration of co-ownership and eventual partition would
involve an indirect or collateral attack on the titles. We disagree.
A torrens title, as a rule, is conclusive and indefeasible. Proceeding
from this, P.D. No. 1529, 19 48 provides that a certificate of title shall
not be subject to collateral attack and can not be altered, modified, or
canceled except in a direct proceeding. When is an action an attack on
a title? It is when the object of the action or proceeding is to nullify the
title, and thus challenge the judgment pursuant to which the title was
decreed. The attack is direct when the object of an action or
proceeding is to annul or set aside such judgment, or enjoin its
enforcement. On the other hand, the attack is indirect or collateral
when, in an action to obtain a different relief, an attack on the
judgment is nevertheless made as an incident thereof. 20
In his complaint for partition, consistent with our ruling in Roque
regarding the nature of an action for partition, petitioner seeks first, a
declaration that he is a co-owner of the subject properties; and second,
the conveyance of his lawful shares. He does not attack respondent's
titles. Petitioner alleges no fraud, mistake, or any other irregularity that
would justify a review of the registration decree in respondent's favor.
His theory is that although the subject properties were registered
solely in respondent's name, but since by agreement between them as
well as under the Family Code, he is co-owner of these properties and
as such is entitled to the conveyance of his shares. On the premise
that he is a co-owner, he can validly seek the partition of the
properties in co-ownership and the conveyance to him of his share.
Thus, in Guevara v. Guevara, 21 in which a parcel of land bequeathed
in a last will and testament was registered in the name of only one of
the heirs, with the understanding that he would deliver to the others
their shares after the debts of the original owner had been paid, this
Court ruled that notwithstanding the registration of the land in the

name of only one of the heirs, the other heirs can claim their shares in
"such action, judicial or extrajudicial, as may be necessary to partition
the estate of the testator." 22
Third. The Court of Appeals also reversed its first decision on the
ground that to order partition will, in effect, rule and decide against
Steelhouse Realty Development Corporation and Eloisa Castillo, both
strangers to the present case, as to the properties registered in their
names. This reasoning, however, ignores the fact that the majority of
the properties involved in the present case are registered in
respondent's name, over which petitioner claims rights as a co-owner.
Besides, other than the real properties, petitioner also seeks partition
of a substantial amount of personal properties consisting of motor
vehicles and several pieces of jewelry. By dismissing petitioner's
complaint for partition on grounds of due process and equity, the
appellate court unwittingly denied petitioner his right to prove
ownership over the claimed real and personal properties. The dismissal
of petitioner's complaint is unjustified since both ends may be amply
served by simply excluding from the action for partition the properties
registered in the name of Steelhouse Realty and Eloisa Castillo.
WHEREFORE, the amended decision of the Court of Appeals, dated May
7, 1998, is REVERSED and the case is REMANDED to the Regional Trial
Court, Branch 59, Makati City for further proceedings on the merits.
G.R. No. 132529. February 2, 2001
SUSAN NICDAO CARIO, petitioner,
vs.
SUSAN YEE CARIO, respondent.
DECISION
YNARES-SANTIAGO, J.:
The issue for resolution in the case at bar hinges on the validity of the
two marriages contracted by the deceased SPO4 Santiago S. Cario,
whose death benefits is now the subject of the controversy between
the two Susans whom he married. 1wphi1.nt
Before this Court is a petition for review on certiorari seeking to set
aside the decision 1 of the Court of Appeals in CA-G.R. CV No. 51263,
which affirmed in toto the decision 2 of the Regional Trial Court of
Quezon City, Branch 87, in Civil Case No. Q-93-18632.
During the lifetime of the late SPO4 Santiago S. Cario, he contracted
two marriages, the first was on June 20, 1969, with petitioner Susan
Nicdao Cario (hereafter referred to as Susan Nicdao), with whom he
had two offsprings, namely, Sahlee and Sandee Cario; and the second
was on November 10, 1992, with respondent Susan Yee Cario
(hereafter referred to as Susan Yee), with whom he had no children in
their almost ten year cohabitation starting way back in 1982.
In 1988, SPO4 Santiago S. Cario became ill and bedridden due to
diabetes complicated by pulmonary tuberculosis. He passed away on
November 23, 1992, under the care of Susan Yee, who spent for his
medical and burial expenses. Both petitioner and respondent filed
claims for monetary benefits and financial assistance pertaining to the
deceased from various government agencies. Petitioner Susan Nicdao
was able to collect a total of P146,000.00 from MBAI, PCCUI,
Commutation, NAPOLCOM, [and] Pag-ibig, 3 while respondent Susan
Yee received a total of P21,000.00 from GSIS Life, Burial (GSIS) and
burial (SSS). 4
On December 14, 1993, respondent Susan Yee filed the instant case for
collection of sum of money against petitioner Susan Nicdao praying,
inter alia, that petitioner be ordered to return to her at least one-half of
the one hundred forty-six thousand pesos (P146,000.00) collectively
denominated as death benefits which she (petitioner) received from
MBAI, PCCUI, Commutation, NAPOLCOM, [and] Pag-ibig. Despite
service of summons, petitioner failed to file her answer, prompting the
trial court to declare her in default.
Respondent Susan Yee admitted that her marriage to the deceased
took place during the subsistence of, and without first obtaining a
judicial declaration of nullity of, the marriage between petitioner and
the deceased. She, however, claimed that she had no knowledge of the
previous marriage and that she became aware of it only at the funeral
of the deceased, where she met petitioner who introduced herself as
the wife of the deceased. To bolster her action for collection of sum of
money, respondent contended that the marriage of petitioner and the
deceased is void ab initio because the same was solemnized without
the required marriage license. In support thereof, respondent
presented: 1) the marriage certificate of the deceased and the
petitioner which bears no marriage license number; 5 and 2) a
certification dated March 9, 1994, from the Local Civil Registrar of San
Juan, Metro Manila, which reads

This is to certify that this Office has no record of marriage license of


the spouses SANTIAGO CARINO (sic) and SUSAN NICDAO, who are
married in this municipality on June 20, 1969. Hence, we cannot issue
as requested a true copy or transcription of Marriage License number
from the records of this archives.
This certification is issued upon the request of Mrs. Susan Yee Cario
for whatever legal purpose it may serve. 6
On August 28, 1995, the trial court ruled in favor of respondent, Susan
Yee, holding as follows:
WHEREFORE, the defendant is hereby ordered to pay the plaintiff the
sum of P73,000.00, half of the amount which was paid to her in the
form of death benefits arising from the death of SPO4 Santiago S.
Cario, plus attorneys fees in the amount of P5,000.00, and costs of
suit.
IT IS SO ORDERED. 7
On appeal by petitioner to the Court of Appeals, the latter affirmed in
toto the decision of the trial court. Hence, the instant petition,
contending that:
I.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING
THE FINDINGS OF THE LOWER COURT THAT VDA. DE CONSUEGRA VS.
GSIS IS APPLICABLE TO THE CASE AT BAR.
II.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN APPLYING
EQUITY IN THE INSTANT CASE INSTEAD OF THE CLEAR AND
UNEQUIVOCAL MANDATE OF THE FAMILY CODE.
III.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT FINDING
THE CASE OF VDA. DE CONSUEGRA VS GSIS TO HAVE BEEN MODIFIED,
AMENDED AND EVEN ABANDONED BY THE ENACTMENT OF THE FAMILY
CODE. 8
Under Article 40 of the Family Code, the absolute nullity of a previous
marriage may be invoked for purposes of remarriage on the basis
solely of a final judgment declaring such previous marriage void.
Meaning, where the absolute nullity of a previous marriage is sought to
be invoked for purposes of contracting a second marriage, the sole
basis acceptable in law, for said projected marriage to be free from
legal infirmity, is a final judgment declaring the previous marriage void.
9 However, for purposes other than remarriage, no judicial action is
necessary to declare a marriage an absolute nullity. For other
purposes, such as but not limited to the determination of heirship,
legitimacy or illegitimacy of a child, settlement of estate, dissolution of
property regime, or a criminal case for that matter, the court may pass
upon the validity of marriage even after the death of the parties
thereto, and even in a suit not directly instituted to question the
validity of said marriage, so long as it is essential to the determination
of the case. 10 In such instances, evidence must be adduced,
testimonial or documentary, to prove the existence of grounds
rendering such a previous marriage an absolute nullity. These need not
be limited solely to an earlier final judgment of a court declaring such
previous marriage void. 11
It is clear therefore that the Court is clothed with sufficient authority to
pass upon the validity of the two marriages in this case, as the same is
essential to the determination of who is rightfully entitled to the
subject death benefits of the deceased.
Under the Civil Code, which was the law in force when the marriage of
petitioner Susan Nicdao and the deceased was solemnized in 1969, a
valid marriage license is a requisite of marriage, 12 and the absence
thereof, subject to certain exceptions, 13 renders the marriage void ab
initio. 14
In the case at bar, there is no question that the marriage of petitioner
and the deceased does not fall within the marriages exempt from the
license requirement. A marriage license, therefore, was indispensable
to the validity of their marriage. This notwithstanding, the records
reveal that the marriage contract of petitioner and the deceased bears
no marriage license number and, as certified by the Local Civil
Registrar of San Juan, Metro Manila, their office has no record of such
marriage license. In Republic v. Court of Appeals, 15 the Court held
that such a certification is adequate to prove the non-issuance of a
marriage license. Absent any circumstance of suspicion, as in the
present case, the certification issued by the local civil registrar enjoys
probative value, he being the officer charged under the law to keep a
record of all data relative to the issuance of a marriage license.

Such being the case, the presumed validity of the marriage of


petitioner and the deceased has been sufficiently overcome. It then
became the burden of petitioner to prove that their marriage is valid
and that they secured the required marriage license. Although she was
declared in default before the trial court, petitioner could have squarely
met the issue and explained the absence of a marriage license in her
pleadings before the Court of Appeals and this Court. But petitioner
conveniently avoided the issue and chose to refrain from pursuing an
argument that will put her case in jeopardy. Hence, the presumed
validity of their marriage cannot stand.
It is beyond cavil, therefore, that the marriage between petitioner
Susan Nicdao and the deceased, having been solemnized without the
necessary marriage license, and not being one of the marriages
exempt from the marriage license requirement, is undoubtedly void ab
initio.
It does not follow from the foregoing disquisition, however, that since
the marriage of petitioner and the deceased is declared void ab initio,
the death benefits under scrutiny would now be awarded to
respondent Susan Yee. To reiterate, under Article 40 of the Family
Code, for purposes of remarriage, there must first be a prior judicial
declaration of the nullity of a previous marriage, though void, before a
party can enter into a second marriage, otherwise, the second
marriage would also be void.
Accordingly, the declaration in the instant case of nullity of the
previous marriage of the deceased and petitioner Susan Nicdao does
not validate the second marriage of the deceased with respondent
Susan Yee. The fact remains that their marriage was solemnized
without first obtaining a judicial decree declaring the marriage of
petitioner Susan Nicdao and the deceased void. Hence, the marriage of
respondent Susan Yee and the deceased is, likewise, void ab initio.
One of the effects of the declaration of nullity of marriage is the
separation of the property of the spouses according to the applicable
property regime. 16 Considering that the two marriages are void ab
initio, the applicable property regime would not be absolute community
or conjugal partnership of property, but rather, be governed by the
provisions of Articles 147 and 148 of the Family Code on Property
Regime of Unions Without Marriage.
Under Article 148 of the Family Code, which refers to the property
regime of bigamous marriages, adulterous relationships, relationships
in a state of concubine, relationships where both man and woman are
married to other persons, multiple alliances of the same married man,
17 ... [O]nly the properties acquired by both of the parties through their
actual joint contribution of money, property, or industry shall be owned
by them in common in proportion to their respective contributions ...
In this property regime, the properties acquired by the parties through
their actual joint contribution shall belong to the co-ownership. Wages
and salaries earned by each party belong to him or her exclusively.
Then too, contributions in the form of care of the home, children and
household, or spiritual or moral inspiration, are excluded in this regime.
18
Considering that the marriage of respondent Susan Yee and the
deceased is a bigamous marriage, having been solemnized during the
subsistence of a previous marriage then presumed to be valid
(between petitioner and the deceased), the application of Article 148 is
therefore in order.
The disputed P146,000.00 from MBAI [AFP Mutual Benefit Association,
Inc.], NAPOLCOM, Commutation, Pag-ibig, and PCCUI, are clearly
renumerations, incentives and benefits from governmental agencies
earned by the deceased as a police officer. Unless respondent Susan
Yee presents proof to the contrary, it could not be said that she
contributed money, property or industry in the acquisition of these
monetary benefits. Hence, they are not owned in common by
respondent and the deceased, but belong to the deceased alone and
respondent has no right whatsoever to claim the same. By intestate
succession, the said death benefits of the deceased shall pass to his
legal heirs. And, respondent, not being the legal wife of the deceased
is not one of them.
As to the property regime of petitioner Susan Nicdao and the
deceased, Article 147 of the Family Code governs. This article applies
to unions of parties who are legally capacitated and not barred by any
impediment to contract marriage, but whose marriage is nonetheless
void for other reasons, like the absence of a marriage license. Article
147 of the Family Code reads Art. 147. When a man and a woman who are capacitated to marry each
other, live exclusively with each other as husband and wife without the

benefit of marriage or under a void marriage, their wages and salaries


shall be owned by them in equal shares and the property acquired by
both of them through their work or industry shall be governed by the
rules on co-ownership.
In the absence of proof to the contrary, properties acquired while they
lived together shall be presumed to have been obtained by their joint
efforts, work or industry, and shall be owned by them in equal shares.
For purposes of this Article, a party who did not participate in the
acquisition by the other party of any property shall be deemed to have
contributed jointly in the acquisition thereof if the formers efforts
consisted in the care and maintenance of the family and of the
household.
xxx
When only one of the parties to a void marriage is in good faith, the
share of the party in bad faith in the co-ownership shall be forfeited in
favor of their common children. In case of default of or waiver by any
or all of the common children or their descendants, each vacant share
shall belong to the respective surviving descendants. In the absence of
descendants, such share shall belong to the innocent party. In all
cases, the forfeiture shall take place upon termination of the
cohabitation.
In contrast to Article 148, under the foregoing article, wages and
salaries earned by either party during the cohabitation shall be owned
by the parties in equal shares and will be divided equally between
them, even if only one party earned the wages and the other did not
contribute thereto. 19 Conformably, even if the disputed death
benefits were earned by the deceased alone as a government
employee, Article 147 creates a co-ownership in respect thereto,
entitling the petitioner to share one-half thereof. As there is no
allegation of bad faith in the present case, both parties of the first
marriage are presumed to be in good faith. Thus, one-half of the
subject death benefits under scrutiny shall go to the petitioner as her
share in the property regime, and the other half pertaining to the
deceased shall pass by, intestate succession, to his legal heirs, namely,
his children with Susan Nicdao.
In affirming the decision of the trial court, the Court of Appeals relied
on the case of Vda. de Consuegra v. Government Service Insurance
System, 20 where the Court awarded one-half of the retirement
benefits of the deceased to the first wife and the other half, to the
second wife, holding that:
... [S]ince the defendants first marriage has not been dissolved or
declared void the conjugal partnership established by that marriage
has not ceased. Nor has the first wife lost or relinquished her status as
putative heir of her husband under the new Civil Code, entitled to
share in his estate upon his death should she survive him.
Consequently, whether as conjugal partner in a still subsisting
marriage or as such putative heir she has an interest in the husbands
share in the property here in dispute.... And with respect to the right
of the second wife, this Court observed that although the second
marriage can be presumed to be void ab initio as it was celebrated
while the first marriage was still subsisting, still there is need for
judicial declaration of such nullity. And inasmuch as the conjugal
partnership formed by the second marriage was dissolved before
judicial declaration of its nullity, [t]he only just and equitable solution
in this case would be to recognize the right of the second wife to her
share of one-half in the property acquired by her and her husband, and
consider the other half as pertaining to the conjugal partnership of the
first marriage. 21
It should be stressed, however, that the aforecited decision is premised
on the rule which requires a prior and separate judicial declaration of
nullity of marriage. This is the reason why in the said case, the Court
determined the rights of the parties in accordance with their existing
property regime.
In Domingo v. Court of Appeals, 22 however, the Court, construing
Article 40 of the Family Code, clarified that a prior and separate
declaration of nullity of a marriage is an all important condition
precedent only for purposes of remarriage. That is, if a party who is
previously married wishes to contract a second marriage, he or she has
to obtain first a judicial decree declaring the first marriage void, before
he or she could contract said second marriage, otherwise the second
marriage would be void. The same rule applies even if the first
marriage is patently void because the parties are not free to determine
for themselves the validity or invalidity or their marriage. However, for
purposes other than to remarry, like for filing a case for collection of
sum of money anchored on a marriage claimed to be valid, no prior
and separate judicial declaration of nullity is necessary. All that a party
has to do is to present evidence, testimonial or documentary, that
would prove that the marriage from which his or her rights flow is in
fact valid. Thereupon, the court, if material to the determination of the
issues before it, will rule on the status of the marriage involved and

proceed to determine the rights of the parties in accordance with the


applicable laws and jurisprudence. Thus, in Nial v. Bayadog, 23 the
Court explained:
[T]he court may pass upon the validity of marriage even in a suit not
directly instituted to question the same so long as it is essential to the
determination of the case. This is without prejudice to any issue that
may arise in the case. When such need arises, a final judgment of
declaration of nullity is necessary even if the purpose is other than to
remarry. The clause on the basis of a final judgment declaring such
previous marriage void in Article 40 of the Family Code connoted that
such final judgment need not be obtained only for purpose of
remarriage.
WHEREFORE, the petition is GRANTED, and the decision of the Court of
Appeals in CA-G.R. CV No. 51263 which affirmed the decision of the
Regional Trial Court of Quezon City ordering petitioner to pay
respondent the sum of P73,000.00 plus attorneys fees in the amount
of P5,000.00, is REVERSED and SET ASIDE. The complaint in Civil Case
No. Q-93-18632, is hereby DISMISSED. No pronouncement as to
costs.1wphi1.nt
SO ORDERED.

but decided to work as an entertainer in Japan from 1992 to 1994 when


her relationship with Jacintos relatives turned sour. Her periodic
absence, however, did not ebb away the conflict with petitioners
relatives. In 1996, the couple decided to separate and end up their 9year cohabitation.6
On January 9, 1997, private respondent filed a complaint for Partition
and Recovery of Personal Property with Receivership against the
petitioner with the Regional Trial Court of Boac, Marinduque. She
alleged that from her salary of $1,500.00 a month as entertainer in
Japan, she was able to contribute P70,000.00 in the completion of their
unfinished house. Also, from her own earnings as an entertainer and
fish dealer, she was able to acquire and accumulate appliances, pieces
of furniture and household effects, with a total value of P111,375.00.
She prayed that she be declared the sole owner of these personal
properties and that the amount of P70,000.00, representing her
contribution to the construction of their house, be reimbursed to her.
Private respondent testified that she deposited part of her earnings in
her savings account with First Allied Development Bank.7 Her Pass
Book shows that as of May 23, 1995, she had a balance of
P21,046.08.8 She further stated that she had a total of P35,465.009
share in the joint account deposit which she and the petitioner
maintained with the same bank.10 Gina declared that said deposits
were spent for the purchase of construction materials, appliances and
other personal properties.11
In his answer12 to the complaint, petitioner claimed that the expenses
for the construction of their house were defrayed solely from his
income as a captain of their fishing vessel. He averred that private
respondents meager income as fish dealer rendered her unable to
contribute in the construction of said house. Besides, selling fish was a
mere pastime to her; as such, she was contented with the small
quantity of fish allotted to her from his fishing trips. Petitioner further
contended that Gina did not work continuously in Japan from 1992 to
1994, but only for a 6-month duration each year. When their house was
repaired and improved sometime in 1995-1996, private respondent did
not share in the expenses because her earnings as entertainer were
spent on the daily needs and business of her parents. From his income
in the fishing business, he claimed to have saved a total of
P130,000.00, P75,000.00 of which was placed in a joint account
deposit with private respondent. This savings, according to petitioner
was spent in purchasing the disputed personal properties.
On May 21, 1997, the trial court declared the petitioner as in default
for failure to file a pre-trial brief as required by Supreme Court Circular
No. 1-89.13
On May 26, 1997, petitioner filed a motion for reconsideration14 of the
May 21, 1997 order, which was denied on June 2, 1997, and private
respondent was allowed to present evidence ex parte.15 Petitioner
filed another motion for reconsideration but the same was also denied
on October 8, 1997.
On July 15, 1998, a decision16 was rendered in favor of private
respondent, the dispositive portion of which reads:
WHEREFORE, in view of all the foregoing, judgment is hereby rendered
in favor of the plaintiff Gina S. Rey against defendant Jacinto Saguid:

G.R. No. 150611

June 10, 2003

a) Ordering the partition of the house identified as plaintiffs Exhibit C


and D and directing the defendant to return and/or reimburse to the
plaintiff the amount of seventy thousand pesos (P70,000,00) which the
latter actually contributed to its construction and completion;

JACINTO SAGUID, petitioner,


vs.
HON. COURT OF APPEALS, THE REGIONAL TRIAL COURT, BRANCH 94,
BOAC, MARINDUQUE AND GINA S. REY, respondents.

b) Declaring the plaintiff as the exclusive owner of the personal


properties listed on Exhibit M;

YNARES-SANTIAGO, J.:

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


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

The regime of limited co-ownership of property governing the union of


parties who are not legally capacitated to marry each other, but who
nonetheless live together as husband and wife, applies to properties
acquired during said cohabitation in proportion to their respective
contributions. Co-ownership will only be up to the extent of the proven
actual contribution of money, property or industry. Absent proof of the
extent thereof, their contributions and corresponding shares shall be
presumed to be equal.1
Seventeen-year old Gina S. Rey was married,2 but separated de facto
from her husband, when she met petitioner Jacinto Saguid in
Marinduque, sometime in July 1987.3 After a brief courtship, the two
decided to cohabit as husband and wife in a house built on a lot owned
by Jacintos father.4 Their cohabitation was not blessed with any
children. Jacinto made a living as the patron of their fishing vessel
"Saguid Brothers."5 Gina, on the other hand, worked as a fish dealer,

d) Ordering the defendant to pay the plaintiff moral damages in the


sum of fifty thousand pesos (P50,000.00) plus the costs of suit.
SO ORDERED.17
On appeal, said decision was affirmed by the Court of Appeals;
however, the award of P50,000.00 as moral damages was deleted for
lack of basis.18 The appellate court ruled that the propriety of the
order which declared the petitioner as in default became moot and
academic in view of the effectivity of the 1997 Rules of Civil Procedure.
It explained that the new rules now require the filing of a pre-trial brief
and the defendants non-compliance therewith entitles the plaintiff to
present evidence ex parte.

Both parties filed motions for reconsideration which were denied;


hence, petitioner filed the instant petition based on the following
assigned errors:
A.
THE HONORABLE COURT OF APPEALS COMMIT[TED] A REVERSIBLE
ERROR IN APPLYING RETROACTIVELY THE 1997 RULES OF CIVIL
PROCEDURE IN THE PRESENT CASE AND HOLDING THE FIRST
ASSIGNED ERROR THEREIN MOOT AND ACADEMIC THUS, FAILED TO
RULE ON THE PROPRIETY OF THE TRIAL COURTS REFUSAL TO SET
ASIDE THE ORDER OF DEFAULT DUE TO MISTAKE AND/OR EXCUSABLE
NEGLIGENCE COMMITTED BY PETITIONER.
B.
THE HONORABLE COURT OF APPEALS COMMIT[TED] A REVERSIBLE
ERROR IN RELYING ON THE FACTUAL FINDINGS OF THE TRIAL COURT
WHICH RECEIVED THE EVIDENCE OF HEREIN RESPONDENT ONLY EX
PARTE.19
The issues for resolution are: (1) whether or not the trial court erred in
allowing private respondent to present evidence ex parte; and (2)
whether or not the trial courts decision is supported by evidence.
Under Section 6, Rule 18 of the 1997 Rules of Civil Procedure, the
failure of the defendant to file a pre-trial brief shall have the same
effect as failure to appear at the pre-trial, i.e., the plaintiff may present
his evidence ex parte and the court shall render judgment on the basis
thereof.20 The remedy of the defendant is to file a motion for
reconsideration21 showing that his failure to file a pre-trial brief was
due to fraud, accident, mistake or excusable neglect.22 The motion
need not really stress the fact that the defendant has a valid and
meritorious defense because his answer which contains his defenses is
already on record.23
In the case at bar, petitioner insists that his failure to file a pre-trial
brief is justified because he was not represented by counsel. This
justification is not, however, sufficient to set aside the order directing
private respondent to present evidence ex parte, inasmuch as the
petitioner chose at his own risk not to be represented by counsel. Even
without the assistance of a lawyer, petitioner was able to file a motion
for extension to file answer,24 the required answer stating therein the
special and affirmative defenses,25 and several other motions.26 If it
were true that petitioner did not understand the import of the April 23,
1997 order directing him to file a pre-trial brief, he could have inquired
from the court or filed a motion for extension of time to file the brief.
Instead, he waited until May 26, 1997, or 14 days from his alleged
receipt of the April 23, 1997 order before he filed a motion asking the
court to excuse his failure to file a brief. Pre-trial rules are not to be
belittled or dismissed because their non-observance may result in
prejudice to a partys substantive rights. Like all rules, they should be
followed except only for the most persuasive of reasons when they
may be relaxed to relieve a litigant of an injustice not commensurate
with the degree of his thoughtlessness in not complying with the
procedure prescribed.27
In the instant case, the fact that petitioner was not assisted by a
lawyer is not a persuasive reason to relax the application of the rules.
There is nothing in the Constitution which mandates that a party in a
non-criminal proceeding be represented by counsel and that the
absence of such representation amounts to a denial of due process.
The assistance of lawyers, while desirable, is not indispensable. The
legal profession is not engrafted in the due process clause such that
without the participation of its members the safeguard is deemed
ignored or violated.28
However, the Court of Appeals erred in ruling that the effectivity of the
1997 Rules of Civil Procedure, specifically, Section 6, Rule 18 thereof,
rendered moot and academic the issue of whether or not the plaintiff
may be allowed to present evidence ex parte for failure of the
defendant to file a pre-trial brief. While the rules may indeed be applied
retroactively, the same is not called for in the case at bar. Even before
the 1997 Rules of Civil Procedure took effect on July 1, 1997, the filing
of a pre-trial brief was required under Circular No. 1-89 which became
effective on February 1, 1989. Pursuant to the said circular, "[f]ailure to
file pre-trial briefs may be given the same effect as the failure to
appear at the pre-trial," that is, the party may be declared non-suited
or considered as in default.29
Coming now to the substantive issue, it is not disputed that Gina and
Jacinto were not capacitated to marry each other because the former
was validly married to another man at the time of her cohabitation with
the latter. Their property regime therefore is governed by Article 14830
of the Family Code, which applies to bigamous marriages, adulterous
relationships, relationships in a state of concubinage, relationships
where both man and woman are married to other persons, and
multiple alliances of the same married man. Under this regime, "only

the properties acquired by both of the parties through their actual joint
contribution of money, property, or industry shall be owned by them in
common in proportion to their respective contributions ..."31 Proof of
actual contribution is required.32
In the case at bar, although the adulterous cohabitation of the parties
commenced in 1987, which is before the date of the effectivity of the
Family Code on August 3, 1998, Article 148 thereof applies because
this provision was intended precisely to fill up the hiatus in Article 144
of the Civil Code.33 Before Article 148 of the Family Code was enacted,
there was no provision governing property relations of couples living in
a state of adultery or concubinage. Hence, even if the cohabitation or
the acquisition of the property occurred before the Family Code took
effect, Article 148 governs.34
In the cases of Agapay v. Palang,35 and Tumlos v. Fernandez,36 which
involved the issue of co-ownership of properties acquired by the
parties to a bigamous marriage and an adulterous relationship,
respectively, we ruled that proof of actual contribution in the
acquisition of the property is essential. The claim of co-ownership of
the petitioners therein who were parties to the bigamous and
adulterous union is without basis because they failed to substantiate
their allegation that they contributed money in the purchase of the
disputed properties. Also in Adriano v. Court of Appeals,37 we ruled
that the fact that the controverted property was titled in the name of
the parties to an adulterous relationship is not sufficient proof of coownership absent evidence of actual contribution in the acquisition of
the property.
As in other civil cases, the burden of proof rests upon the party who, as
determined by the pleadings or the nature of the case, asserts an
affirmative issue. Contentions must be proved by competent evidence
and reliance must be had on the strength of the partys own evidence
and not upon the weakness of the opponents defense.38 This applies
with more vigor where, as in the instant case, the plaintiff was allowed
to present evidence ex parte. The plaintiff is not automatically entitled
to the relief prayed for. The law gives the defendant some measure of
protection as the plaintiff must still prove the allegations in the
complaint. Favorable relief can be granted only after the court is
convinced that the facts proven by the plaintiff warrant such relief.39
Indeed, the party alleging a fact has the burden of proving it and a
mere allegation is not evidence.40
In the case at bar, the controversy centers on the house and personal
properties of the parties. Private respondent alleged in her complaint
that she contributed P70,000.00 for the completion of their house.
However, nowhere in her testimony did she specify the extent of her
contribution. What appears in the record are receipts41 in her name for
the purchase of construction materials on November 17, 1995 and
December 23, 1995, in the total amount of P11,413.00.
On the other hand, both parties claim that the money used to purchase
the disputed personal properties came partly from their joint account
with First Allied Development Bank. While there is no question that
both parties contributed in their joint account deposit, there is,
however, no sufficient proof of the exact amount of their respective
shares therein. Pursuant to Article 148 of the Family Code, in the
absence of proof of extent of the parties respective contribution, their
share shall be presumed to be equal. Here, the disputed personal
properties were valued at P111,375.00, the existence and value of
which were not questioned by the petitioner. Hence, their share therein
is equivalent to one-half, i.e., P55,687.50 each.
The Court of Appeals thus erred in affirming the decision of the trial
court which granted the reliefs prayed for by private respondent. On
the basis of the evidence established, the extent of private
respondents co-ownership over the disputed house is only up to the
amount of P11,413.00, her proven contribution in the construction
thereof. Anent the personal properties, her participation therein should
be limited only to the amount of P55,687.50.
As regards the trial courts award of P50,000.00 as moral damages, the
Court of Appeals correctly deleted the same for lack of basis.
WHEREFORE, in view of all the foregoing, the Decision of the Court of
Appeals in CA-G.R. CV No. 64166 is AFFIRMED with MODIFICATION.
Private respondent Gina S. Rey is declared co-owner of petitioner
Jacinto Saguid in the controverted house to the extent of P11,413.00
and personal properties to the extent of P55,687.50. Petitioner is
ordered to reimburse the amount of P67,100.50 to private respondent,
failing which the house shall be sold at public auction to satisfy private
respondents claim.
SO ORDERED.

G.R. No. L-25014

October 17, 1973

DOLORES LAHORA VDA. DE CASTRO, ARSENIO DE CASTRO, JR.,


WILFREDO DE CASTRO, IRINEO DE CASTRO and VIRGINIA DE CASTRO
ALEJANDRO, (in substitution for the deceased defendant-appellant
ARSENIO DE CASTRO, SR.)., petitioners,
vs.
GREGORIO ATIENZA, respondent.
Arsenio de Castro, Jr. and F.T. Papa for petitioners.
Dakila Castro and Z.D. de Mesa for respondent.

TEEHANKEE, J.:
The Court rejects petitioners' appeal as without merit and affirms the
judgment of the appellate court. Petitioners' predecessor-in-interest as
co-owner of an undivided one-half interest in the fishpond could validly
lease his interest to a third party, respondent Atienza, independently of
his co-owner (although said co-owner had also leased his other
undivided one-half interest to the same third party) and could likewise
by mutual agreement independently cancel his lease agreement with
said third party. Said predecessor-in-interest (and petitioners who have
substituted him as his heirs) therefore stands liable on his express
undertaking to refund the advance rental paid to him by the lessee on
the cancelled lease and cannot invoke the non-cancellation of the coowner's lease to elude such liability.
The Court of Appeals, in its decision affirming in toto the judgment of
the Manila court of first instance ordering therein defendant-appellant
Arsenio de Castro, Sr. (now deceased and substituted by above-named
petitioners as his heirs) "to return to the plaintiff (respondent) Gregorio
Atienza the sum P2,500.00 with legal interest from the date of the
filing of complaint until fully paid plus the sum of P250.00 as attorney's
fees and the costs of the suit", found the following facts to undisputed:
On January 24, 1956 the brothers Tomas de Castro and Arsenio de
Castro, Sr. leased to plaintiff a fishpond containing an area of 26
hectares situated in Polo, Bulacan and forming part of a bigger parcel
of land covered by Transfer Certificate of Title No. 196450 of the
registry of the property of Bulacan. The lessors are co-owners in equal
shares of the leased property.
According to the contract of lease (Exh. 1) the term of the lease was for
five years from January 24, 1956 at a rental of P5,000 a year, the first
year's rental to be paid on February 1, 1956, the second on February 1,
1957 and the rental for the last three years on February 1, 1958. The
first year's rental was paid on time.
In the meantime, Tomas de Castro died.
In the month of November, 1956, plaintiff as lessee and defendant
Arsenio de Castro, Sr. as one of the lessors, agreed to set aside and
annul the contract of lease and for this purpose an agreement (Exh. A)
was signed by them, Exhibit A as signed by plaintiff and defendant
shows that Felisa Cruz Vda. de Castro, widow of Tomas de Castro, was
intended to be made a party thereof in her capacity as representative
of the heirs of Tomas Castro.
Condition No. 2 of Exhibit A reads as follows:
"2.
Na sa pamamagitan nito ay pinawawalang kabuluhan namin
ang nasabing kasulatan at nagkasundo kami na ang bawat isa sa amin
ni Arsenio de Castro at Felisa Cruz Vda. de Castro ay isauli kay
GREGORIO ATIENZA ang tig P2,500.00 o kabuuang halagang P5,000.00
na paunang naibigay nito alinsunod sa nasabing kasulatan; na ang
nasabing tig P2,500.00 ay isasauli ng bawat isa sa amin sa o bago
dumating ang Dec. 30, 1956."
Felisa Cruz Vda. de Castro refused to sign Exhibit A. Defendant did not
pay the P2,500.00 which under the above-quoted paragraph of Exhibit
A, he should have paid on December 30, 1956. Demand for payment
was made by plaintiff's counsel on January 7, 1957 but to no avail,
hence the present action.
On the conflicting contentions between the parties as to who between
them would attend to securing the signature of Mrs. Felisa Cruz Vda. de
Castro (widow of Tomas de Castro) to the agreement of cancellation of
the lease with respondent Atienza, the appellate court found that "the
testimony of the defendant (Arsenio de Castro, Sr.) ... supports the
contention of the plaintiff (Atienza) "that it was the defendant Arsenio
who was interested and undertook to do so, citing Arsenio's own

declaration that "I agreed to sign this document (referring to the


cancellation) because of my desire to cancel our original agreement"
and that his purpose in obtaining the cancellation of said lease
agreement with plaintiff Atienza was "(B)ecause I had the intention of
having said fishpond leased to other persons and I cannot lease it to
third parties unless I can secure the signature of Felisa Vda. de Castro."
The appellate court thus held in effect that as Arsenio "was the one
interested in cancelling the lease (Exh. 1), it stands to reason that he
most probably undertook to obtain the signature of Mrs. Castro [widow
and successor-in-interest of his brother Tomas]" and that he could not
invoke his own failure to obtain such signature to elude his own
undertaking and liability to refund respondent (plaintiff) his share of
the rental paid in advance by respondent on the cancelled lease in the
sum of P2,500.00.
The appellate court furthermore correctly held that the consent or
concurrence of Felisa Vda. de Castro (as co-owner in succession of
Tomas) was not an essential condition to the validity and effectivity of
the agreement of cancellation of the lease (Exhibit A) as between
Arsenio and respondent-lessee, contrary to petitioners' claim, holding
that "(S)ince there is no specific provision in Exhibit A supporting
defendant's claim, we are not prepared to supply such condition unless
the same can be deduced from other evidence or unless the terms of
Exhibit A cannot be performed by plaintiff and defendant without Mrs.
Castro being bound as a party thereto."
The issue is simply reduced to whether Arsenio as co-owner of the
fishpond owned pro-indiviso by him with his brother Tomas (succeeded
by Felisa Vda. de Castro) could validly lease his half-interest to a third
party (respondent Atienza) independently of his
co-owner, and in case his co-owner also leased his other half interest
to the same third party, whether Arsenio could cancel his own lease
agreement with said third party?
The appellate court correctly resolved the issue thus: "Our view of the
contract of lease Exhibit 1 is that each of the Castro brothers, leased
his undivided one-half interest in the fishpond they owned in common
to the plaintiff. Could one of them have validly leased his interest
without the other co-owner leasing his own? The answer to this is given
by appellant in his own brief (p. 14) when he said that it would result in
a partnership between the lessee and the owner of the other undivided
half. If the lease could be entered into partially by one of the coowners, insofar as his interest is concerned, then the lease, Exhibit 1,
can also be cancelled partially as between plaintiff and defendant.
Therefore, we conclude that the consent of Mrs. Felisa Cruz Vda. de
Castro is not essential for the cancellation of the lease of defendant's
one-half undivided share in the fishpond to plaintiff."
The appellate court's judgment is fully supported by the Civil Code
provisions on the rights and prerogatives of co-owners, and specifically
by Article 493 which expressly provides that
Art. 493. Each co-owner shall have the full ownership of his part and
of the fruits and benefits pertaining thereto, and he may therefore
alienate, assign or mortgage it, and even substitute another person in
its enjoyment, except when personal rights are involved. But the effect
of the alienation or the mortgage, with respect to the co-owners, shall
be limited to the portion which may be alloted to him in the division
upon the termination of the co-ownership. *
ACCORDINGLY, the appealed judgment is hereby affirmed with costs
against petitioners.
Makalintal, Actg. C.J., Zaldivar, Castro, Fernando, Barredo, Makasiar,
Antonio and Esguerra, JJ., concur.

G.R. No. 159310

February 24, 2009

CAMILO F. BORROMEO, Petitioner,


vs.
ANTONIETTA O. DESCALLAR, Respondent.
DECISION
PUNO, C.J.:
What are the rights of an alien (and his successor-in-interest) who
acquired real properties in the country as against his former Filipina
girlfriend in whose sole name the properties were registered under the
Torrens system?
The facts are as follows:
Wilhelm Jambrich, an Austrian, arrived in the Philippines in 1983 after
he was assigned by his employer, Simmering-Graz Panker A.G., an
Austrian company, to work at a project in Mindoro. In 1984, he
transferred to Cebu and worked at the Naga II Project of the National
Power Corporation. There, he met respondent Antonietta OpallaDescallar, a separated mother of two boys who was working as a
waitress at St. Moritz Hotel. Jambrich befriended respondent and asked
her to tutor him in English. In dire need of additional income to support
her children, respondent agreed. The tutorials were held in Antoniettas
residence at a squatters area in Gorordo Avenue.
Jambrich and respondent fell in love and decided to live together in a
rented house in Hernan Cortes, Mandaue City. Later, they transferred
to their own house and lots at Agro-Macro Subdivision, Cabancalan,
Mandaue City. In the Contracts to Sell dated November 18, 19851 and
March 10, 19862 covering the properties, Jambrich and respondent
were referred to as the buyers. A Deed of Absolute Sale dated
November 16, 19873 was likewise issued in their favor. However, when
the Deed of Absolute Sale was presented for registration before the
Register of Deeds, registration was refused on the ground that
Jambrich was an alien and could not acquire alienable lands of the
public domain. Consequently, Jambrichs name was erased from the
document. But it could be noted that his signature remained on the left
hand margin of page 1, beside respondents signature as buyer on
page 3, and at the bottom of page 4 which is the last page. Transfer
Certificate of Title (TCT) Nos. 24790, 24791 and 24792 over the
properties were issued in respondents name alone.
Jambrich also formally adopted respondents two sons in Sp. Proc. No.
39-MAN,4 and per Decision of the Regional Trial Court of Mandaue City
dated May 5, 1988.5
However, the idyll lasted only until April 1991. By then, respondent
found a new boyfriend while Jambrich began to live with another
woman in Danao City. Jambrich supported respondents sons for only
two months after the break up.
Jambrich met petitioner Camilo F. Borromeo sometime in 1986.
Petitioner was engaged in the real estate business. He also built and
repaired speedboats as a hobby. In 1989, Jambrich purchased an
engine and some accessories for his boat from petitioner, for which he
became indebted to the latter for about P150,000.00. To pay for his
debt, he sold his rights and interests in the Agro-Macro properties to
petitioner for P250,000, as evidenced by a "Deed of Absolute
Sale/Assignment."6 On July 26, 1991, when petitioner sought to
register the deed of assignment, he discovered that titles to the three
lots have been transferred in the name of respondent, and that the
subject property has already been mortgaged.
On August 2, 1991, petitioner filed a complaint against respondent for
recovery of real property before the Regional Trial Court of Mandaue
City. Petitioner alleged that the Contracts to Sell dated November 18,
1985 and March 10, 1986 and the Deed of Absolute Sale dated
November 16, 1987 over the properties which identified both Jambrich

and respondent as buyers do not reflect the true agreement of the


parties since respondent did not pay a single centavo of the purchase
price and was not in fact a buyer; that it was Jambrich alone who paid
for the properties using his exclusive funds; that Jambrich was the real
and absolute owner of the properties; and, that petitioner acquired
absolute ownership by virtue of the Deed of Absolute Sale/Assignment
dated July 11, 1991 which Jambrich executed in his favor.
In her Answer, respondent belied the allegation that she did not pay a
single centavo of the purchase price. On the contrary, she claimed that
she "solely and exclusively used her own personal funds to defray and
pay for the purchase price of the subject lots in question," and that
Jambrich, being an alien, was prohibited to acquire or own real
property in the Philippines.
At the trial, respondent presented evidence showing her alleged
financial capacity to buy the disputed property with money from a
supposed copra business. Petitioner, in turn, presented Jambrich as his
witness and documentary evidence showing the substantial salaries
which Jambrich received while still employed by the Austrian company,
Simmering-Graz Panker A.G.
In its decision, the court a quo found
Evidence on hand clearly show that at the time of the purchase and
acquisition of [the] properties under litigation that Wilhelm Jambrich
was still working and earning much. This fact of Jambrich earning much
is not only supported by documentary evidence but also by the
admission made by the defendant Antoniet[t]a Opalla. So that,
Jambrichs financial capacity to acquire and purchase the
properties . . . is not disputed.7
xxx
On the other hand, evidence . . . clearly show that before defendant
met Jambrich sometime in the latter part of 1984, she was only
working as a waitress at the St. Moritz Hotel with an income of
P1,000.00 a month and was . . . renting and living only in . . . [a] room
at . . . [a] squatter area at Gorordo Ave., Cebu City; that Jambrich took
pity of her and the situation of her children that he offered her a better
life which she readily accepted. In fact, this miserable financial
situation of hers and her two children . . . are all stated and reflected in
the Child Study Report dated April 20, 1983 (Exhs. "G" and "G-1")
which facts she supplied to the Social Worker who prepared the same
when she was personally interviewed by her in connection with the
adoption of her two children by Wilhelm Jambrich. So that, if such facts
were not true because these are now denied by her . . . and if it was
also true that during this time she was already earning as much as
P8,000.00 to P9,000.00 as profit per month from her copra business, it
would be highly unbelievable and impossible for her to be living only in
such a miserable condition since it is the observation of this Court that
she is not only an extravagant but also an expensive person and not
thrifty as she wanted to impress this Court in order to have a big
saving as clearly shown by her actuation when she was already
cohabiting and living with Jambrich that according to her . . . the
allowance given . . . by him in the amount of $500.00 a month is not
enough to maintain the education and maintenance of her children.8
This being the case, it is highly improbable and impossible that she
could acquire the properties under litigation or could contribute any
amount for their acquisition which according to her is worth more than
P700,000.00 when while she was working as [a] waitress at St. Moritz
Hotel earning P1,000.00 a month as salary and tips of more or less
P2,000.00 she could not even provide [for] the daily needs of her
family so much so that it is safe to conclude that she was really in
financial distress when she met and accepted the offer of Jambrich to
come and live with him because that was a big financial opportunity for
her and her children who were already abandoned by her husband.9
xxx
The only probable and possible reason why her name appeared and
was included in [the contracts to sell dated November 18, 1985 and
March 10, 1986 and finally, the deed of absolute sale dated November
16, 1987] as buyer is because as observed by the Court, she being a
scheming and exploitive woman, she has taken advantage of the
goodness of Jambrich who at that time was still bewitched by her
beauty, sweetness, and good attitude shown by her to him since he
could still very well provide for everything she needs, he being earning
(sic) much yet at that time. In fact, as observed by this Court, the
acquisition of these properties under litigation was at the time when
their relationship was still going smoothly and harmoniously.10
[Emphasis supplied.]
The dispositive portion of the Decision states:
WHEREFORE, . . . Decision is hereby rendered in favor of the plaintiff
and against the defendant Antoniet[t]a Opalla by:

1) Declaring plaintiff as the owner in fee simple over the residential


house of strong materials and three parcels of land designated as Lot
Nos. 1, 3 and 5 which are covered by TCT Nos. 24790, 24791 and
24792 issued by the Register of Deeds of Mandaue City;
2) Declaring as null and void TCT Nos. 24790, 24791 and 24792 issued
in the name of defendant Antoniet[t]a Descallar by the Register of
Deeds of Mandaue City;
3) Ordering the Register of Deeds of Mandaue City to cancel TCT Nos.
24790, 24791 and 24792 in the name of defendant Antoniet[t]a
Descallar and to issue new ones in the name of plaintiff Camilo F.
Borromeo;
4) Declaring the contracts now marked as Exhibits "I," "K" and "L" as
avoided insofar as they appear to convey rights and interests over the
properties in question to the defendant Antoniet[t]a Descallar;
5) Ordering the defendant to pay plaintiff attorneys fees in the amount
of P25,000.00 and litigation expenses in the amount of P10,000.00;
and,
6) To pay the costs.11
Respondent appealed to the Court of Appeals. In a Decision dated April
10, 2002,12 the appellate court reversed the decision of the trial court.
In ruling for the respondent, the Court of Appeals held:
We disagree with the lower courts conclusion. The circumstances
involved in the case cited by the lower court and similar cases decided
on by the Supreme Court which upheld the validity of the title of the
subsequent Filipino purchasers are absent in the case at bar. It should
be noted that in said cases, the title to the subject property has been
issued in the name of the alien transferee (Godinez et al., vs. Fong Pak
Luen et al., 120 SCRA 223 citing Krivenko vs. Register of Deeds of
Manila, 79 Phils. 461; United Church Board for World Ministries vs.
Sebastian, 159 SCRA 446, citing the case of Sarsosa Vda. De Barsobia
vs. Cuenco, 113 SCRA 547; Tejido vs. Zamacoma, 138 SCRA 78). In the
case at bar, the title of the subject property is not in the name of
Jambrich but in the name of defendant-appellant. Thus, Jambrich could
not have transferred a property he has no title thereto.13
Petitioners motion for reconsideration was denied.
Hence, this petition for review.
Petitioner assigns the following errors:
I. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN
DISREGARDING RESPONDENTS JUDICIAL ADMISSION AND OTHER
OVERWHELMING EVIDENCE ESTABLISHING JAMBRICHS PARTICIPATION,
INTEREST AND OWNERSHIP OF THE PROPERTIES IN QUESTION AS
FOUND BY THE HONORABLE TRIAL COURT.
II. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING
THAT JAMBRICH HAS NO TITLE TO THE PROPERTIES IN QUESTION AND
MAY NOT THEREFORE TRANSFER AND ASSIGN ANY RIGHTS AND
INTERESTS IN FAVOR OF PETITIONER.
III. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN
REVERSING THE WELL-REASONED DECISION OF THE TRIAL COURT AND
IN IMPOSING DOUBLE COSTS AGAINST HEREIN PETITIONER (THEN,
PLAINTIFF-APPELLEE).14
First, who purchased the subject properties?
The evidence clearly shows, as pointed out by the trial court, who
between respondent and Jambrich possesses the financial capacity to
acquire the properties in dispute. At the time of the acquisition of the
properties in 1985 to 1986, Jambrich was gainfully employed at
Simmering-Graz Panker A.G., an Austrian company. He was earning an
estimated monthly salary of P50,000.00. Then, Jambrich was assigned
to Syria for almost one year where his monthly salary was
approximately P90,000.00.
On the other hand, respondent was employed as a waitress from 1984
to 1985 with a monthly salary of not more than P1,000.00. In 1986,
when the parcels of land were acquired, she was unemployed, as
admitted by her during the pre-trial conference. Her allegations of
income from a copra business were unsubstantiated. The supposed
copra business was actually the business of her mother and their
family, with ten siblings. She has no license to sell copra, and had not
filed any income tax return. All the motorized bancas of her mother
were lost to fire, and the last one left standing was already scrap.
Further, the Child Study Report15 submitted by the Department of
Social Welfare and Development (DSWD) in the adoption proceedings
of respondents two sons by Jambrich disclosed that:

Antonietta tried all types of job to support the children until she was
accepted as a waitress at St. Moritz Restaurant in 1984. At first she had
no problem with money because most of the customers of St. Moritz
are (sic) foreigners and they gave good tips but towards the end of
1984 there were no more foreigners coming because of the situation in
the Philippines at that time. Her financial problem started then. She
was even renting a small room in a squatters area in Gorordo Ave.,
Cebu City. It was during her time of great financial distress that she
met Wilhelm Jambrich who later offered her a decent place for herself
and her children.16
The DSWD Home Study Report17 further disclosed that:
[Jambrich] was then at the Restaurant of St. Moritz when he saw
Antonietta Descallar, one of the waitresses of the said Restaurants. He
made friends with the girl and asked her to tutor him in [the] English
language. Antonietta accepted the offer because she was in need of
additional income to support [her] 2 young children who were
abandoned by their father. Their session was agreed to be scheduled
every afternoon at the residence of Antonietta in the squatters area in
Gorordo Avenue, Cebu City. The Austrian was observing the situation of
the family particularly the children who were malnourished. After a few
months sessions, Mr. Jambrich offered to transfer the family into a
decent place. He told Antonietta that the place is not good for the
children. Antonietta who was miserable and financially distressed at
that time accepted the offer for the sake of the children.18
Further, the following additional pieces of evidence point to Jambrich as
the source of fund used to purchase the three parcels of land, and to
construct the house thereon:
(1) Respondent Descallar herself affirmed under oath, during her redirect examination and during the proceedings for the adoption of her
minor children, that Jambrich was the owner of the properties in
question, but that his name was deleted in the Deed of Absolute Sale
because of legal constraints. Nonetheless, his signature remained in
the deed of sale, where he signed as buyer.
(2) The money used to pay the subject parcels of land in installments
was in postdated checks issued by Jambrich. Respondent has never
opened any account with any bank. Receipts of the installment
payments were also in the name of Jambrich and respondent.
(3) In 1986-1987, respondent lived in Syria with Jambrich and her two
children for ten months, where she was completely under the support
of Jambrich.
(4) Jambrich executed a Last Will and Testament, where he, as owner,
bequeathed the subject properties to respondent.
Thus, Jambrich has all authority to transfer all his rights, interests and
participation over the subject properties to petitioner by virtue of the
Deed of Assignment he executed on July 11, 1991.
Well-settled is the rule that this Court is not a trier of facts. The
findings of fact of the trial court are accorded great weight and respect,
if not finality by this Court, subject to a number of exceptions. In the
instant case, we find no reason to disturb the factual findings of the
trial court. Even the appellate court did not controvert the factual
findings of the trial court. They differed only in their conclusions of law.
Further, the fact that the disputed properties were acquired during the
couples cohabitation also does not help respondent. The rule that coownership applies to a man and a woman living exclusively with each
other as husband and wife without the benefit of marriage, but are
otherwise capacitated to marry each other, does not apply.19 In the
instant case, respondent was still legally married to another when she
and Jambrich lived together. In such an adulterous relationship, no coownership exists between the parties. It is necessary for each of the
partners to prove his or her actual contribution to the acquisition of
property in order to be able to lay claim to any portion of it.
Presumptions of co-ownership and equal contribution do not apply.20
Second, we dispose of the issue of registration of the properties in the
name of respondent alone. Having found that the true buyer of the
disputed house and lots was the Austrian Wilhelm Jambrich, what now
is the effect of registration of the properties in the name of
respondent?
It is settled that registration is not a mode of acquiring ownership.21 It
is only a means of confirming the fact of its existence with notice to the
world at large.22 Certificates of title are not a source of right. The mere
possession of a title does not make one the true owner of the property.
Thus, the mere fact that respondent has the titles of the disputed
properties in her name does not necessarily, conclusively and
absolutely make her the owner. The rule on indefeasibility of title

likewise does not apply to respondent. A certificate of title implies that


the title is quiet,23 and that it is perfect, absolute and indefeasible.24
However, there are well-defined exceptions to this rule, as when the
transferee is not a holder in good faith and did not acquire the subject
properties for a valuable consideration.25 This is the situation in the
instant case. Respondent did not contribute a single centavo in the
acquisition of the properties. She had no income of her own at that
time, nor did she have any savings. She and her two sons were then
fully supported by Jambrich.
Respondent argued that aliens are prohibited from acquiring private
land. This is embodied in Section 7, Article XII of the 1987
Constitution,26 which is basically a reproduction of Section 5, Article
XIII of the 1935 Constitution,27 and Section 14, Article XIV of the 1973
Constitution.28 The capacity to acquire private land is dependent on
the capacity "to acquire or hold lands of the public domain." Private
land may be transferred only to individuals or entities "qualified to
acquire or hold lands of the public domain." Only Filipino citizens or
corporations at least 60% of the capital of which is owned by Filipinos
are qualified to acquire or hold lands of the public domain. Thus, as the
rule now stands, the fundamental law explicitly prohibits non-Filipinos
from acquiring or holding title to private lands, except only by way of
legal succession or if the acquisition was made by a former naturalborn citizen.29
Therefore, in the instant case, the transfer of land from Agro-Macro
Development Corporation to Jambrich, who is an Austrian, would have
been declared invalid if challenged, had not Jambrich conveyed the
properties to petitioner who is a Filipino citizen. In United Church Board
for World Ministries v. Sebastian,30 the Court reiterated the consistent
ruling in a number of cases31 that if land is invalidly transferred to an
alien who subsequently becomes a Filipino citizen or transfers it to a
Filipino, the flaw in the original transaction is considered cured and the
title of the transferee is rendered valid. Applying United Church Board
for World Ministries, the trial court ruled in favor of petitioner, viz.:
[W]hile the acquisition and the purchase of (sic) Wilhelm Jambrich of
the properties under litigation [were] void ab initio since [they were]
contrary to the Constitution of the Philippines, he being a foreigner,
yet, the acquisition of these properties by plaintiff who is a Filipino
citizen from him, has cured the flaw in the original transaction and the
title of the transferee is valid.
The trial court upheld the sale by Jambrich in favor of petitioner and
ordered the cancellation of the TCTs in the name of respondent. It
declared petitioner as owner in fee simple of the residential house of
strong materials and three parcels of land designated as Lot Nos. 1, 3
and 5, and ordered the Register of Deeds of Mandaue City to issue new
certificates of title in his name. The trial court likewise ordered
respondent to pay petitioner P25,000 as attorneys fees and P10,000
as litigation expenses, as well as the costs of suit.
We affirm the Regional Trial Court.
The rationale behind the Courts ruling in United Church Board for
World Ministries, as reiterated in subsequent cases,32 is this since
the ban on aliens is intended to preserve the nations land for future
generations of Filipinos, that aim is achieved by making lawful the
acquisition of real estate by aliens who became Filipino citizens by
naturalization or those transfers made by aliens to Filipino citizens. As
the property in dispute is already in the hands of a qualified person, a
Filipino citizen, there would be no more public policy to be protected.
The objective of the constitutional provision to keep our lands in
Filipino hands has been achieved.
IN VIEW WHEREOF, the petition is GRANTED. The Decision of the Court
of Appeals in C.A. G.R. CV No. 42929 dated April 10, 2002 and its
Resolution dated July 8, 2003 are REVERSED and SET ASIDE. The
Decision of the Regional Trial Court of Mandaue City in Civil Case No.
MAN-1148 is REINSTATED.
SO ORDERED.
REYNATO S. PUNO
Chief Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
RENATO C. CORONA
Associate Justice
TERESITA J. LEONARDO-DE CASTRO
Associate Justice
ARTURO D. BRION
Associate Justice
CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the
conclusions in the above decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Courts
Division.
REYNATO S. PUNO
Chief Justice