Republic of the Philippines her return to the Philippines in May 1992, that Rogelio had been
SUPREME COURT introducing Escobar as his wife.  Mesa, Manila.
Manila
THIRD DIVISION
G.R. No. 193038  March 11, 2015
JOSEFIA V. NOBLEZA, petitioner,
vs.
SHIRLEY B. NUEGA, respondent.
D E C I S I O N
VILLARMA, JR., J.:
At bar is a petition for review on certiorari of the Decision 1 dated
May 14, 2010 and the Resolution2 dated July 21, 2010 of the Court
of Appeals (CA) in CA­G.R. CV No. 70235, which affirmed with
modification the assailed Decision3 dated February 14, 2001 of the
Regional Trial Court (RTC) of Marikina City, Branch 273, in Civil
Case No. 96­274­MK.
The following facts are found by the trial court and affirmed by the
appellate court:  Meanwhile, in a Decision 12 dated May 16, 1994, the RTC of Pasig
Respondent Shirley B. Nuega (Shirley) was married to Rogelio A.
Nuega (Rogelio) on September 1, 1990.4 Sometime in 1988 when
the parties were still engaged, Shirley was working as a domestic
helper   in Israel.  Upon  the  request  of   Rogelio,  Shirley sent  him
money5 for the purchase of a residential lot in Marikina where they
had planned to eventually build their home. Rogelio was then also
working abroad as a seaman. The following year, or on September
13,  1989, Rogelio  purchased  the  subject  house  and lot  for  One
Hundred   Two   Thousand   Pesos   (P102,000.00)6 from   Rodeanna
Realty Corporation. The subject property has an aggregate area of
one hundred eleven square meters (111 sq. m.) covered by Transfer
Certificate of Title (TCT) No. N­133844. 7 Shirley claims that upon
her  arrival in  the  Philippines sometime  in  1989, she  settled the
balance for the equity over the subject property with the developer
through   SSS8 financing.   She   likewise   paid   for   the   succeeding
monthly   amortizations.   On   October   19,   1989,   TCT   No.
1719639 over the subject property was issued by the Registry of
Deeds of Marikina, Rizal solely under the name of Rogelio.  WHEREFORE, subject  to  the   foregoing  disquisition,  the
On September 1, 1990, Shirley and Rogelio got married and lived
in  the  subject property.  The   following  year,  Shirley returned to
Israel   for   work.   While   overseas,   she   received   information   that
Rogelio had brought home another woman, Monica Escobar, into
the family home. She also learned, and was able to confirm upon
Metro Manila and the National Statistics Office (NSO), sta.
In   June   1992,   Shirley   filed   two   cases   against   Rogelio:   one   for
Concubinage   before   the   Provincial   Prosecution   Office   of   Rizal,
and   another   for   Legal   Separation   and   Liquidation   of   Property
before the RTC of Pasig City. Shirley later withdrew the complaint
for legal separation and liquidation of property, but re­filed 10 the
same on January 29, 1993. In between the filing of these cases,
Shirley learned that Rogelio had the intention of selling the subject
property. Shirley then advised the interested buyers ­ one of whom
was their neighbor and petitioner Josefina V. Nobleza (petitioner) ­
of the existence of the cases that she had filed against Rogelio and
cautioned them against buying the subject property until the cases
are closed and terminated. Nonetheless, under a Deed of Absolute
Sale11 dated December 29, 1992, Rogelio sold the subject property
to   petitioner   without   Shirley's   consent   in   the   amount   of   Three
Hundred   Eighty   Thousand   Pesos   (P380,000.00),   including
petitioner's  undertaking   to  assume  the  existing  mortgage   on  the
property with the National Home Mortgage Finance Corporation
and   to   pay   the   real   property   taxes   due   thereon.
City,   Branch   70,   granted   the   petition   for   legal   separation   and
ordered the dissolution and liquidation of the regime of absolute
community of property between Shirley and Rogelio, viz.:
WHEREFORE, in view of the foregoing, the Court hereby
grants the instant petition for legal separation between the
subject spouses with all its legal effects as provided for in
Art. 63 of the Family Code. Their community property is
consequently   dissolved   and   must   be   liquidated   in
accordance   with   Art.  102   of   the   New   Family   Code.  The
respondent   is   thus   hereby   enjoined   from   selling,
encumbering or in any way disposing or alienating any of
their community property including the subject house and
lot before the required liquidation. Moreover, he, being the
guilty spouse, must forfeit the net profits of the community
property   in   favor   of   the   petitioner   who   is   the   innocent
spouse pursuant to Art. 43 of the aforesaid law. Finally, in
the light of the claim of ownership by the present occupants
who have not been impleaded in the instant case, a separate
action   must   be   instituted   by   the   petitioner   against   the
alleged buyer or buyers thereof to determine their respective
rights thereon.
Let   a   copy   of   this   decision   be   furnished   the   Local   Civil
Registrar   of   Manila,   the   Register   of   Deeds   of   Marikina,
1
SO ORDERED.13cralawlawlibrary
Rogelio  appealed the  above­quoted ruling before  the  CA  which
denied due course and dismissed the petition. It became final and
executory and a writ of execution was issued in August 1995.14
On   August   27,   1996,   Shirley   instituted   a   Complaint15 for
Rescission of Sale and Recoveiy of Property against petitioner and
Rogelio before the RTC of Marikina City, Branch 273. After trial
on the merits, the trial court rendered its decision on February 14,
2001, viz.:
WHEREFORE, foregoing  premises  considered,  judgment
is hereby rendered in favor of plaintiff Shirley Nuega and
against defendant Josefina Nobleza, as follows:
1 the   Deed  of   Absolute  Sale   dated December  29,
) 1992   insofar   as   the   55.05   square   meters
representing the one half (1/2) portion of plaintiff
Shirley   Nuega   is   concerned,   is   hereby   ordered
rescinded, the same being null and void;
2 defendant Josefina Nobleza is ordered to reconvey
) said   55.05   square   meters   to   plaintiff   Shirley
Nuega,   or   in   the   alternative   to   pay   plaintiff
Shirley  Nuega  the   present  market  value  of  said
55.05 square meters; and
3 to pay plaintiff Shirley Nuega attorney's fees in
) the sum of Twenty Thousand Pesos (P20,000.00).
For   lack   of   merit,   defendant's   counterclaim   is
hereby DENIED.
SO ORDERED.16
Petitioner   sought   recourse   with   the   CA,   while   Rogelio   did   not
appeal   the   ruling   of   the   trial   court.   In   its   assailed   Decision
promulgated on May 14, 2010, the appellate court affirmed with
modification the trial court's ruling, viz.:
appeal is DENIED. The Decision dated 14 February 2001
of the Regional Trial Court of Marikina City, Branch 273
in Civil   Case   No.   96­274­
MK is AFFIRMED with MODIFICATION in   that   the
Deed of Absolute Sale dated 29 December 1992 is hereby
declared   null   and   void   in   its   entirety,   and   defendant­
 appellant  Josefina   V.  Nobleza   is  ordered  to reconvey  the
entire   subject   property   to   plaintiff­appellee   Shirley   B.
Nuega and defendant Rogelio Nuega, without prejudice to
said defendant­appellant's right to recover  from defendant
Rogelio whatever amount she paid for the subject property.
Costs against defendant­appellant Nobleza.
SO ORDERED.
Petitioner moved for reconsideration. In a Resolution dated July
21, 2010, the appellate court denied the motion for lack of merit.
Hence, this petition raising the following assignment of errors:
[I.] THE   HONORABLE   COURT   OF   APPEALS
ERRED   WHEN   IT   AFFIRMED   THE
DECISION   OF   THE   REGIONAL   TRIAL
COURT   BY   SUSTAINING   THE   FINDING
THAT   PETITIONER   WAS   NOT   A
PURCHASER IN GOOD FAITH.
[II. THE   HONORABLE   COURT   OF   APPEALS
] ERRED WHEN IT MODIFIED THE DECISION
OF   THE   REGIONAL   TRIAL   COURT   BY
DECLARING   AS   NULL   AND   VOID   THE
DEED   OF   ABSOLUTE   SALE   DATED   29
DECEMBER 1992 IN ITS ENTIRETY.18
We deny the petition.
Petitioner is not a buyer in good faith.
An innocent purchaser for value is one who buys the property of
another,   without   notice   that   some   other   person   has   a right   or
interest in the property, for which a full and fair price is paid by
of   our   technical   rules   of   evidence   of   which   his   knowledge   is
nil.'"21 A buyer in good faith does his homework and verifies that
the particulars are in order such as the title, the parties, the mode of
transfer and the provisions in the deed/contract of sale, to name a
few. To be more specific, such prudence can be shown by making
an ocular inspection of the property, checking the title/ownership
with the proper Register of Deeds alongside the payment of taxes
therefor, or inquiring into the minutiae such as the parameters or
lot area, the type of ownership, and the capacity of the seller to
dispose   of   the   property,   which   capacity   necessarily   includes   an
inquiry into the civil status of the seller to ensure that if married,
marital consent is secured when necessary. In fine, for a purchaser
of a property in the possession of another to be in good faith, he
must exercise due diligence, conduct an investigation, and weigh
the surrounding facts and circumstances like what any prudent man
in a similar situation would do.22
In the case at bar, petitioner claims that she is a buyer in good faith
of the subject property which is titled under the name of the seller
Rogelio A. Nuega alone as evidenced by TCT No. 171963 and Tax
Declaration   Nos.   D­012­04723   and   D­012­04724.23 Petitioner
argues, among others, that since she has examined the TCT over
the subject property and found the property to have been registered
under   the   name   of   seller   Rogelio   alone,   she   is   an   innocent
purchaser for value and "she is not required to go beyond the face
of the title in verifying the status of the subject property at the time
of the consummation of the sale and at the date of the sale."24
We disagree with petitioner.
A buyer cannot claim to be an innocent purchaser for value by
merely relying on the TCT of the seller while ignoring all the other
surrounding circumstances relevant to the sale.
In the case of Spouses Raymundo v. Spouses Bandong,  petitioners 25
To begin with, she is a grandniece of Eulalia and resides in the
same   locality   where   the   latter   lives   and   conducts   her   principal
business.   It   is   therefore   impossible   for   her   not   to   acquire
knowledge   of   her   grand   aunt's   business   practice   of   requiring
her biyaheros to surrender the titles to their properties and to sign
the corresponding deeds of sale over said properties in her favor, as
security.   This   alone   should   have   put   Jocelyn   on   guard   for   any
possible abuses that Eulalia may commit with the titles and the
deeds of sale in her possession.
Similarly,   in   the   case   of Arrofo   v.   Quiño,27 the   Court   held   that
while "the law does not require a person dealing with registered
land   to   inquire   further   than   what   the   Torrens   Title   on   its   face
indicates," the rule is not absolute.28 Thus, finding that the buyer
therein failed to take the necessary precaution required of a prudent
man, the Court held that Arrofo was not an innocent purchaser for
value, viz.:
In the present case, the records show that Arrofo failed to act as a
prudent  buyer.  True, she   asked her   daughter  to  verify  from  the
Register   of   Deeds   if   the   title   to   the   Property   is   free   from
encumbrances.   However,   Arrofo   admitted   that   the   Property   is
within   the   neighborhood   and   that   she   conducted   an   ocular
inspection of the Property. She saw the house constructed on the
Property.   Yet,   Arrofo   did   not   even   bother   to   inquire   about   the
occupants of the house. Arrofo also admitted that at the time of the
sale, Myrna was occupying a room in her house as her lessee. The
fact that Myrna was renting a room from Arrofo yet selling a land
with a house should have put Arrofo on her guard. She knew that
Myrna was not occupying the house. Hence, someone else must
have been occupying the house.
Thus, Arrofo should have inquired who occupied the house, and if
a lessee, who received the rentals from such lessee. Such inquiry

the buyer at the time of the purchase or before receipt of any notice
of claims or interest of some other person in the property.19 It is the
party who claims to be an innocent purchaser for value who has the
burden of proving such assertion, and it is not enough to invoke the
ordinary presumption of good faith.20 To successfully invoke and
be considered as a buyer in good faith, the presumption is that first
and foremost, the "buyer in good faith" must have shown prudence
and due diligence in the exercise of his/her rights. It presupposes
that the buyer did everything that an ordinary person would do for
the protection and defense of his/her rights and interests against
prejudicial or injurious concerns when placed in such a situation.
The prudence required of a buyer in good faith is "not that of a
person with training in law, but rather that of an average man who
'weighs facts and circumstances without resorting to the calibration
would   have   led   Arrofo   to   discover   that   the   lessee   was   paying
therein ­ as does petitioner herein ­ were also harping that due to
rentals to Quino, not to Renato and Myrna, who claimed to own
the indefeasibility of a Torrens title, there was nothing in the TCT
the Property.29
of the property in litigation that should have aroused the buyer's
suspicion as to put her on guard that there was a defect in the title An analogous situation obtains in the case at bar.
of   therein  seller.  The   Court  held  in  the Spouses  Raymundo case
The TCT of the subject property states that its sole owner is the
that the buyer therein could not hide behind the cloak of being an
seller Rogelio himself who was therein also described as "single".
innocent purchaser for value by merely relying on the TCT which
However, as in the cases of Spouses Raymundo and Arrofo, there
showed   that   the   registered   owner   of   the   land   purchased   is   the
are circumstances critical to the case at bar which convince us to
seller.   The   Court   ruled   in   this   case   that   the   buyer   was   not   an
affirm the ruling of both the appellate and lower courts that herein
innocent   purchaser   for   value   due   to   the   following   attendant
petitioner is not a buyer in good faith.
circumstances, viz.:
First, petitioner's sister Hilda Bautista, at the time of the sale, was
In   the   present   case,   we   are   not   convinced   by   the   petitioners'
residing near Rogelio and Shirley's house ­ the subject property ­ in
incessant assertion that Jocelyn is an innocent purchaser for value.
Ladislao Diwa Village, Marikina City. Had petitioner been more
2
prudent as a buyer, she could have easily checked if Rogelio had
the capacity to dispose of the subject property. Had petitioner been
more   vigilant,   she   could   have   inquired   with   such   facility   ­
considering that her sister lived in the same Ladislao Diwa Village
where the property is located ­ if there was any person other than
Rogelio who had any right or interest in the subject property.
To be  sure, respondent even testified that she had warned their
neighbors at Ladislao Diwa Village ­ including petitioner's sister ­
not to engage in any deal with Rogelio relative to the purchase of
the   subject   property   because   of   the   cases   she   had   filed   against
Rogelio. Petitioner denies that respondent had given such warning
to her neighbors, which includes her sister, therefore arguing that
such warning could not be construed as "notice" on her part that
there is a person other than the seller himself who has any right or
interest  in  the  subject property.  Nonetheless, despite  petitioner's
adamant   denial,   both   courts a   quo gave   probative   value   to   the
testimony of respondent, and the instant petition failed to present
any   convincing   evidence   for   this   Court   to   reverse   such   factual
finding. To be sure, it is not within our province to second­guess
the courts a quo, and the re­determination of this factual issue is
beyond the reach of a petition for review on certiorari where only
questions of law may be reviewed.30
Second, issues surrounding the execution of the Deed of Absolute
Sale  also pose  question  on the  claim of  petitioner  that she  is a
buyer in good faith. As correctly observed by both courts a quo,
the Deed of Absolute Sale was executed and dated on December
29,   1992.   However,   the   Community   Tax   Certificates   of   the
witnesses therein were dated January 2 and 20, 1993. 31 While this
irregularity is not a direct proof of the intent of the parties to the
sale to make it appear that the Deed of Absolute Sale was executed
on December 29, 1992 ­ or before Shirley filed the petition for
legal   separation   on   January   29,   1993   ­   it   is   circumstantial   and
relevant to the claim of herein petitioner as an innocent purchaser
for value.
That is not all.
In the Deed of Absolute Sale dated December 29, 1992, the civil
status of Rogelio as seller was not stated, while petitioner as buyer
was indicated as "single," viz.:
ROGELIO  A. NUEGA, of legal age, Filipino citizen and
with postal address at 2­A­2 Ladislao Diwa St., Concepcion,
Marikina,   Metro   Manila,   hereinafter   referred   to   as   the
VENDOR  Article 91 of the Family Code thus provides:
And
JOSEFINA   V.   NOBLEZA,   of   legal   age,  Filipino   citizen,
single   and   with   postal   address   at   No.   L­2­A­3   Ladislao
Diwa St., Concepcion, Marikina, Metro Manila, hereinafter
referred to as the VENDEE.32cralawlawlibrary
It puzzles the Court that while petitioner has repeatedly claimed
that   Rogelio   is   "single"   under   TCT   No.   171963   and   Tax
Declaration Nos. D­012­04723 and D­012­04724, his civil status
as seller  was  not  stated  in  the   Deed of  Absolute   Sale   ­  further
creating a cloud on the claim of petitioner that she is an innocent
purchaser for value.
As to the second issue, we rule that the appellate court did not err
when it modified the decision of the trial court and declared that
the Deed of Absolute Sale dated December 29, 1992 is void in its
entirety.
The trial court held that while the TCT shows that the owner of the
subject property is Rogelio alone, respondent was able to prove at
the trial court that she contributed in the payment of the purchase
price of the subject property. This fact was also settled with finality
by the RTC of Pasig City, Branch 70, and affirmed by the CA, in
the case for legal separation and liquidation of property docketed
as  JDRC  Case   No.  2510.  The   pertinent  portion   of  the   decision
reads:
xxx Clearly, the house and lot jointly acquired by the parties
prior   to   their   marriage   forms   part   of   their   community
property regime, xxx
From the foregoing, Shirley sufficiently proved her financial
contribution for the purchase of the house and lot covered
by TCT 171963. Thus, the present lot which forms part of
their   community   property   should   be   divided   equally
between them upon the grant of the instant petition for legal
separation.   Having   established   by   preponderance   of
evidence   the   fact   of   her   husband's   guilt   in   contracting   a
subsequent marriage xxx, Shirley alone should be entitled to
the   net   profits   earned   by   the   absolute   community
property.33cralawlawlibrary
However, the nullity of the sale made by Rogelio is not premised
on proof of respondent's financial contribution in the purchase of
the   subject   property.   Actual   contribution   is   not   relevant   in
determining whether a piece of property is community property for
the law itself defines what constitutes community property.
Art. 91. Unless otherwise provided in this Chapter or in the
marriage settlements, the community property shall consist
3
of all the property owned by the spouses at the time of the
celebration of the marriage or acquired thereafter.
The only exceptions from the above rule are: (1) those excluded
from the absolute community by the Family Code; and (2) those
excluded by the marriage settlement.
Under the first exception are properties enumerated in Article 92 of
the Family Code, which states:
Art.   92.   The   following   shall   be   excluded   from   the
community property:
(1) Property acquired during the marriage by gratuitous title
by   either   spouse,   and   the   fruits   as   well   as   the   income
thereof, if any, unless it is expressly provided by the donor,
testator   or   grantor   that   they   shall   form   part   of   the
community property;
(2) Property for personal and exclusive use of either spouse;
however,   jewelry   shall   form   part   of   the   community
property;
(3) Property acquired before the marriage by either spouse
who has legitimate descendants by a former marriage, and
the fruits as well as the income, if any, of such property.
As held in Quiao v. Quiao:
When a couple enters into a regime of absolute community,
the husband and the wife becomes joint owners of all the
properties of the marriage. Whatever property each spouse
brings   into   the   marriage,   and   those   acquired   during   the
marriage   (except   those   excluded   under   Article   92   of   the
Family   Code)   form   the   common   mass   of   the   couple's
properties. And when the couple's marriage or community is
dissolved,   that   common   mass   is   divided   between   the
spouses,   or   their   respective   heirs,   equally   or   in   the
proportion the parties have established, irrespective of the
value each one may have originally owned.
Since the subject property does not fall under any of the exclusions
provided   in   Article   92,   it   therefore   forms   part   of   the   absolute
community property of Shirley and Rogelio. Regardless of their
respective contribution to its acquisition before their marriage, and
despite the fact that only Rogelio's name appears in the TCT as
owner, the property is owned jointly by the spouses Shirley and
Rogelio.
Respondent   and   Rogelio   were   married   on   September   1,   1990.
Rogelio, on his own and without the consent of herein respondent
as his spouse, sold the subject property via a Deed of Absolute
Sale  dated December 29, 1992 ­  or  during the subsistence of a Absolute Sale x x x entered into by and between defendant­
valid contract of marriage. Under Article 96 of Executive Order appellant   Josefina   and   defendant   Rogelio   dated   29
No. 209, otherwise known as The Family Code of the Philippines, December   1992,   during   the   subsisting   marriage   between
the said disposition of a communal property is void, viz.: plaintiff­appellee   Shirley   and   Rogelio,   was   without   the
written consent of Shirley, the said Deed of Absolute Sale
Art.   96.   The   administration   and   enjoyment   of   the
is void   in   its   entirety.   Hence,   the   trial   court   erred   in
community property shall belong to both spouses jointly. In
declaring   the   said   Deed   of   Absolute   Sale   as   void   only
case of disagreement, the husband's decision shall prevail,
insofar as the 1/2 portion pertaining to the share of Shirley
subject to  recourse   to the   court by  the  wife   for   a  proper
is concerned.
remedy, which must be availed of within five years from the
date of the contract implementing such decision. Finally, consistent with our ruling that Rogelio solely entered into
the contract of sale with petitioner and acknowledged receiving the
In the event that one spouse is incapacitated or otherwise
entire  consideration of  the  contract under  the  Deed of Absolute
unable to participate in the administration of the common
Sale, Shirley could not be held accountable to petitioner for the
properties,   the   other   spouse   may   assume   sole   powers   of
reimbursement   of   her   payment   for   the   purchase   of   the   subject
administration. These powers do not include the powers
property.   Under   Article   94   of   the Family   Code,   the   absolute
of disposition or encumbrance without the authority of community of property shall only be "liable for x x x [d]ebts and
the court or the written consent of the other spouse. In obligations contracted by either spouse without the consent of the
the absence of such authority or consent, the disposition other to the extent that the family may have been benefited x x x."
or  encumbrance  shall be  void. However, the  transaction As correctly stated by the appellate court, there being no evidence
shall be construed as a continuing offer on the part of the on record that the amount received by Rogelio redounded to the
consenting   spouse   and   the   third   person,   and   may   be benefit of the family, respondent cannot be made to reimburse any
perfected as a binding contract upon the acceptance by the amount to petitioner.37
other spouse or authorization by the court before the offer is
WHEREFORE, in   view   of   the   foregoing,   the   petition
withdrawn by either or both offerors.35cralawlawlibrary
is DENIED. The assailed Decision and Resolution of the Court of
It is clear under the foregoing provision of the Family Code that Appeals dated May 14, 2010 and July 21, 2010, respectively, in
Rogelio   could   not   sell   the   subject   property   without   the   written CA­G.R. CV No. 70235 are AFFIRMED.
consent of respondent or the authority of the court. Without such
consent or authority, the entire sale is void. As correctly explained Costs against petitioner.
by the appellate court:
SO ORDERED.
In the instant case, defendant Rogelio sold the entire subject
Velasco,   Jr.,   (Chairperson),   Peralta,   Reyes,   and Jardeleza,   JJ.,
property   to   defendant­appellant  Josefina   on   29  December
concur.
1992   or   during   the   existence   of   Rogelio's   marriage   to
plaintiff­appellee Shirley, without the consent of the latter.
The   subject  property  forms  part  of  Rogelio  and  Shirley's
absolute community of property. Thus, the trial court erred
in declaring the deed of sale null and void only insofar as
the   55.05   square   meters   representing   the   one­half   (1/2)
portion of plaintiff­appellee Shirley. In absolute community
of property, if the husband, without knowledge and consent
of   the   wife,  sells  (their)  property,  such  sale  is  void.   The
consent of both the husband Rogelio and the wife Shirley is
required and the absence of the consent of one renders the
entire sale null and void including the portion of the subject
property pertaining to defendant Rogelio who contracted the
sale with defendant­appellant Josefina. Since  the  Deed of

4
5
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 156125               August 25, 2010
FRANCISCO MUÑOZ, JR., Petitioner,
vs.
ERLINDA RAMIREZ and ELISEO CARLOS, Respondents.
D E C I S I O N
BRION, J.:
We resolve the present petition for review on certiorari 1 filed by
petitioner   Francisco   Muñoz,   Jr.   (petitioner)   to   challenge   the
decision2 and the resolution3 of the Court of Appeals (CA) in CA­
G.R. CV No. 57126.4 The CA decision set aside the decision 5 of
the Regional Trial Court (RTC), Branch 166, Pasig City, in Civil
Case   No.   63665.   The   CA   resolution   denied   the   petitioner’s
subsequent motion for reconsideration.
FACTUAL BACKGROUND
The   facts   of   the   case,   gathered   from   the   records,   are   briefly
summarized below.
Subject of the present case is a seventy­seven (77)­square meter
residential   house   and   lot   located   at   170   A.   Bonifacio   Street,
Mandaluyong   City   (subject   property),   covered   by   Transfer
Certificate of Title (TCT) No. 7650 of the Registry of Deeds of
Mandaluyong City in the name of the petitioner.6
The residential lot in the subject property was previously covered
by TCT No. 1427, in the name  of Erlinda Ramirez, married to
Eliseo Carlos (respondents).7
On April 6, 1989, Eliseo, a Bureau of Internal Revenue employee,
mortgaged   TCT   No.   1427,   with   Erlinda’s   consent,   to   the
Government   Service   Insurance   System   (GSIS)   to   secure   a
₱136,500.00   housing   loan,   payable   within   twenty   (20)   years,
through monthly salary deductions of ₱1,687.66.8 The respondents
then   constructed   a   thirty­six   (36)­square   meter,   two­story
residential house on the lot.
On July 14, 1993, the title to the subject property was transferred
to the petitioner by virtue of a Deed of Absolute Sale, dated April
30, 1992, executed by Erlinda, for herself and as attorney­in­fact of
Eliseo, for a stated consideration of ₱602,000.00.9
On September 24, 1993, the respondents filed a complaint with the
RTC for the nullification of the deed of absolute sale, claiming that
there   was   no   sale   but   only   a   mortgage   transaction,   and   the
documents   transferring   the   title   to   the   petitioner’s   name   were
falsified.
The respondents alleged that in April 1992, the petitioner granted
them a ₱600,000.00 loan, to be secured by a first mortgage on TCT
No. 1427; the petitioner gave Erlinda a  ₱200,000.0010 advance to
cancel   the   GSIS   mortgage,   and   made   her   sign   a   document
purporting to be the mortgage contract; the petitioner promised to
give the  ₱402,000.00 balance when Erlinda surrenders TCT No.
1427 with the GSIS mortgage cancelled, and submits an affidavit
signed by Eliseo stating that he waives all his rights to the subject
property;   with   the  ₱200,000.00   advance,   Erlinda   paid   GSIS
₱176,445.2711 to cancel the GSIS mortgage on TCT No. 1427; 12 in
May 1992, Erlinda surrendered to the petitioner the clean TCT No.
1427,   but   returned   Eliseo’s   affidavit,   unsigned;   since   Eliseo’s
affidavit   was   unsigned,   the   petitioner   refused   to   give   the
₱402,000.00 balance and to cancel the mortgage, and demanded
that Erlinda return the  ₱200,000.00 advance; since Erlinda could
not return the  ₱200,000.00 advance because it had been used to
pay the GSIS loan, the petitioner kept the title; and in 1993, they
discovered that TCT No. 7650 had been issued in the petitioner’s
name, cancelling TCT No.1427 in their name.
The petitioner countered that there was a valid contract of sale. He
alleged that the respondents sold the subject property to him after
he   refused  their   offer  to   mortgage   the   subject  property  because
they   lacked   paying   capacity   and   were   unwilling   to   pay   the
incidental   charges;   the   sale   was   with   the   implied   promise   to
repurchase within one year,13 during which period (from May 1,
1992 to April 30, 1993), the respondents would lease the subject
property for a monthly rental of  ₱500.00;14 when the respondents
failed to repurchase the subject property within the one­year period
despite notice, he caused the transfer of title in his name on July
14, 1993;15 when the respondents failed to pay the monthly rentals
despite demand, he filed an ejectment case 16 against them with the
Metropolitan Trial Court (MeTC), Branch 60, Mandaluyong City,
on September 8, 1993, or sixteen days before the filing of the RTC
case for annulment of the deed of absolute sale.
During the pendency of the RTC case, or on March 29, 1995, the
MeTC   decided   the   ejectment   case.   It   ordered   Erlinda   and   her
family to vacate the subject property, to surrender its possession to
the petitioner, and to pay the overdue rentals.17
6
In the RTC, the respondents presented the results of the scientific
examination18 conducted by the National Bureau of Investigation
of   Eliseo’s   purported   signatures   in   the   Special   Power   of
Attorney19 dated   April   29,   1992   and   the   Affidavit   of   waiver   of
rights dated April 29, 1992,20 showing that they were forgeries.
The   petitioner,   on   the   other   hand,   introduced   evidence   on   the
paraphernal nature of the subject property since it was registered in
Erlinda’s name; the residential lot was part of a large parcel of land
owned by Pedro Ramirez and Fructuosa Urcla, Erlinda’s parents; it
was   the   subject   of   Civil   Case   No.   50141,   a   complaint   for
annulment of sale, before the RTC, Branch 158, Pasig City, filed
by   the   surviving   heirs   of   Pedro   against   another   heir,   Amado
Ramirez,   Erlinda’s   brother;   and,   as   a   result   of   a   compromise
agreement, Amado agreed to transfer to the other compulsory heirs
of Pedro, including Erlinda, their rightful shares of the land.21
THE RTC RULING
In   a   Decision   dated   January   23,   1997,   the   RTC   dismissed   the
complaint.   It   found   that   the   subject   property   was   Erlinda’s
exclusive paraphernal property that was inherited from her father.
It   also   upheld   the   sale   to   the   petitioner,   even   without   Eliseo’s
consent as the deed of absolute sale bore the genuine signatures of
Erlinda and the petitioner as vendor and vendee, respectively. It
concluded   that   the   NBI   finding   that   Eliseo’s   signatures   in   the
special power of attorney and in the affidavit were forgeries was
immaterial   because   Eliseo’s   consent   to   the   sale   was   not
necessary.22
The respondents elevated the case to the CA via an ordinary appeal
under Rule 41 of the Revised Rules of Court.
THE CA RULING
The CA decided the appeal on June 25, 2002. Applying the second
paragraph   of   Article   15823 of   the   Civil   Code   and   Calimlim­
Canullas v. Hon. Fortun,24 the CA held that the subject property,
originally   Erlinda’s   exclusive   paraphernal   property,   became
conjugal property when it was used as collateral for a housing loan
that was paid through conjugal funds – Eliseo’s monthly salary
deductions; the subject property, therefore, cannot be validly sold
or mortgaged without Eliseo’s consent, pursuant to Article 12425 of
the Family Code. Thus, the CA declared void the deed of absolute
sale, and set aside the RTC decision.
When   the   CA   denied26 the   subsequent   motion   for
reconsideration,27 the petitioner filed the present petition for review
on certiorari under Rule 45 of the Revised Rules of Court.
 THE PETITION
The petitioner argues that the CA misapplied the second paragraph
of Article 158 of the Civil Code and Calimlim­Canullas 28 because
the respondents admitted in the complaint that it was the petitioner
who gave the money used to cancel the GSIS mortgage on TCT
No. 1427; Article 12029 of the Family Code is the applicable rule,
and since the value of the house is less than the value of the lot,
then Erlinda retained ownership of the subject property. He also
argues   that   the   contract   between   the   parties   was   a   sale,   not   a
mortgage, because (a) Erlinda did not deny her signature in the
document;30 (b) Erlinda agreed to sign a contract of lease over the
subject property;31 and, (c) Erlinda executed a letter, dated April
30, 1992, confirming the conversion of the loan application to a
deed of sale.32
THE CASE FOR THE RESPONDENTS
The   respondents   submit   that   it   is   unnecessary   to   compare   the
respective   values   of   the   house   and   of   the   lot   to   determine
ownership   of   the   subject   property;   it   was   acquired   during   their
marriage and, therefore, considered conjugal property. They also
submit that the transaction between the parties was not a sale, but
an equitable mortgage because (a) they remained in possession of
the   subject   property   even   after   the   execution   of   the   deed   of
absolute sale, (b) they paid the 1993 real property taxes due on the
subject property, and (c)  they received  ₱200,000.00 only of the
total stated price of ₱602,000.00.
THE ISSUE
The issues in the present case boil down to (1) whether the subject
property is paraphernal or conjugal; and, (2) whether the contract
between the parties was a sale or an equitable mortgage.
OUR RULING
We   deny   the   present   Petition   but   for   reasons   other   than   those
advanced by the CA.
This Court is not a trier of facts. However, if the inference, drawn
by the CA, from the facts is manifestly mistaken, as in the present
case, we can review the evidence to allow us to arrive at the correct
factual conclusions based on the record.33
First Issue:
Paraphernal or Conjugal?
As   a   general   rule,   all   property   acquired   during   the   marriage,
whether the acquisition appears to have been made, contracted or
registered in the name of one or both spouses, is presumed to be
conjugal unless the contrary is proved.34
In   the   present   case,   clear   evidence   that   Erlinda   inherited   the
residential   lot   from   her   father   has   sufficiently   rebutted   this
presumption of conjugal ownership.35 Pursuant to Articles 9236 and
10937 of the Family Code, properties acquired by gratuitous title by
either   spouse,   during   the   marriage,   shall   be   excluded   from   the
community   property   and   be   the   exclusive   property   of   each
spouse.38 The   residential   lot,   therefore,   is   Erlinda’s   exclusive
paraphernal property.
The CA, however, held that the residential lot became conjugal
when the house was built thereon through conjugal funds, applying
the   second   paragraph   of   Article   158   of   the   Civil   Code   and
Calimlim­Canullas.39 Under the second paragraph of Article 158 of
the   Civil   Code,   a   land   that   originally   belonged   to   one   spouse
becomes conjugal upon the construction of improvements thereon
at   the   expense   of   the   partnership.   We   applied  this   provision   in
Calimlim­Canullas,40 where we held that when the conjugal house
is constructed on land belonging exclusively to the husband, the
land ipso facto becomes conjugal, but the husband is entitled to
reimbursement of the value of the land at the liquidation of the
conjugal partnership.
The CA misapplied Article 158 of the Civil Code and 
Calimlim­Canullas
We cannot subscribe to the CA’s misplaced reliance on Article 158
of the Civil Code and Calimlim­Canullas.
As the respondents were married during the effectivity of the Civil
Code, its provisions on conjugal partnership of gains (Articles 142
to 189) should have governed their property relations. However,
with the enactment of the Family Code on August 3, 1989, the
Civil Code provisions on conjugal partnership of gains, including
Article 158, have been superseded by those found in the Family
Code (Articles 105 to 133). Article 105 of the Family Code states:
x x x x
The   provisions   of   this   Chapter   [on  the   Conjugal  Partnership   of
Gains] shall also apply to conjugal partnerships of gains already
established between spouses before  the  effectivity  of  this Code,
without prejudice to vested rights already acquired in accordance
with the Civil Code or other laws, as provided in Article 256.
Thus, in determining the nature of the subject property, we refer to
the provisions of the Family Code, and not the Civil Code, except
with respect to rights then already vested.
7
Article 120 of the Family Code, which supersedes Article 158 of
the Civil Code, provides the solution in determining the ownership
of the improvements that are made on the separate property of the
spouses, at the expense of the partnership or through the acts or
efforts of either or both spouses. Under this provision, when the
cost of the improvement and any resulting increase in value are
more than the value of the property at the time of the improvement,
the   entire   property   of   one   of   the   spouses   shall   belong   to   the
conjugal partnership, subject to reimbursement of the value of the
property   of   the   owner­spouse   at   the   time   of   the   improvement;
otherwise,   said   property   shall   be   retained   in   ownership   by   the
owner­spouse, likewise subject to reimbursement of the cost of the
improvement.41
In the present case, we find that Eliseo paid a portion only of the
GSIS   loan   through   monthly   salary   deductions.   From   April   6,
198942 to April 30, 1992,43 Eliseo paid about ₱60,755.76,44 not the
entire  amount of  the  GSIS housing loan plus interest, since  the
petitioner advanced the ₱176,445.2745 paid by Erlinda to cancel the
mortgage   in   1992.   Considering   the  ₱136,500.00   amount   of   the
GSIS housing loan, it is fairly reasonable to assume that the value
of   the   residential   lot   is   considerably   more   than   the  ₱60,755.76
amount paid by Eliseo through monthly salary deductions.
Thus,   the   subject   property   remained   the   exclusive   paraphernal
property of Erlinda at the time she contracted with the petitioner;
the written consent of Eliseo to the transaction was not necessary.
The NBI finding that Eliseo’s signatures in the special power of
attorney and affidavit were forgeries was immaterial.
Nonetheless, the RTC and the CA apparently failed to consider the
real nature of the contract between the parties.
Second Issue:
Sale or Equitable Mortgage?
Jurisprudence  has defined an equitable  mortgage  "as one  which
although lacking in some  formality,  or  form or  words, or  other
requisites demanded by a statute, nevertheless reveals the intention
of the parties to charge real property as security for a debt, there
being   no   impossibility   nor   anything   contrary   to   law   in   this
intent."46
Article 1602 of the Civil Code enumerates the instances when a
contract, regardless of its nomenclature, may be presumed to be an
equitable   mortgage:   (a)   when   the   price   of   a   sale   with   right   to
repurchase is unusually inadequate; (b) when the vendor remains
in possession as lessee or otherwise; (c) when upon or after the
expiration of the right to repurchase another instrument extending
the  period of  redemption  or  granting  a new  period is executed;
(d) when   the   purchaser   retains   for   himself   a   part   of   the
purchase price; (e) when the vendor binds himself to pay the
taxes on the thing sold; and, (f) in any other case where it may
be fairly inferred that the real intention of the parties is that
the   transaction   shall   secure   the   payment   of   a   debt   or   the
performance of any other obligation. These instances apply to a
contract purporting to be an absolute sale.47
For   the   presumption   of   an   equitable   mortgage   to   arise   under
Article 1602 of the Civil Code, two (2) requisites must concur: (a)
that the parties entered into a contract denominated as a contract of
sale; and, (b) that their intention was to secure an existing debt by
way of a mortgage. Any of the circumstances laid out in Article
1602 of the Civil Code, not the concurrence nor an overwhelming
number of the enumerated circumstances, is sufficient to support
the   conclusion   that   a   contract   of   sale   is   in   fact   an   equitable
mortgage.48
Contract is an equitable mortgage
In   the   present   case,   there   are   four   (4)   telling   circumstances
pointing to the existence of an equitable mortgage.
First,   the   respondents   remained   in   possession   as   lessees   of   the
subject property; the parties, in fact, executed a one­year contract
of lease, effective May 1, 1992 to April 30, 1993.49
Second, the  petitioner  retained part of  the  "purchase  price,"  the
petitioner gave a ₱200,000.00 advance to settle the GSIS housing
loan, but refused to give the  ₱402,000.00 balance when Erlinda
failed to submit Eliseo’s signed affidavit of waiver of rights.
Third, respondents paid the real property taxes on July 8, 1993,
despite   the   alleged   sale   on   April   30,   1992; 50 payment   of   real
property taxes is a usual burden attaching to ownership and when,
as here, such payment is coupled with continuous possession of the
property, it constitutes evidence of great weight that the  person
under whose name the realty taxes were declared has a valid and
rightful claim over the land.51
Fourth, Erlinda secured the payment of the principal debt owed to
the petitioner with the subject property. The records show that the
petitioner, in fact, sent Erlinda a Statement of Account showing
that as of February 20, 1993, she owed ₱384,660.00, and the daily
interest,   starting   February   21,   1993,   was  ₱641.10.52 Thus,   the
parties clearly intended an equitable mortgage and not a contract of
sale.
That the petitioner advanced the sum of ₱200,000.00 to Erlinda is
undisputed. This advance, in fact, prompted the latter to transfer
the subject property to the petitioner. Thus, before the respondents
can recover the subject property, they must first return the amount
of  ₱200,000.00 to  the  petitioner, plus legal interest of  12%  per
annum, computed from April 30, 1992.
We   cannot   sustain   the   ballooned   obligation   of  ₱384,660.00,
claimed in the Statement of Account sent by the petitioner, 53 sans
any evidence of how this amount was arrived at. Additionally, a
daily   interest   of  ₱641.10   or  ₱19,233.00   per   month   for   a
₱200,000.00   loan   is   patently   unconscionable.   While   parties   are
free   to   stipulate   on   the   interest   to   be   imposed   on   monetary
obligations, we can step in to temper the interest rates if they are
unconscionable.54
In Lustan v. CA,55 where we established the reciprocal obligations
of   the   parties   under   an   equitable   mortgage,   we   ordered   the
reconveyance of the property to the rightful owner therein upon the
payment of the loan within ninety (90) days from the finality of the
decision.56
WHEREFORE,   in   light   of   all   the   foregoing,   we
hereby DENY the   present   petition.   The   assailed   decision   and
resolution of the Court of Appeals in CA­G.R. CV No. 57126 are
AFFIRMED with the following MODIFICATIONS:
1. The Deed of Absolute Sale dated April 30, 1992 is
hereby declared an equitable mortgage; and
2.   The   petitioner   is   obligated   to   RECONVEY   to  the
respondents   the   property   covered   by   Transfer
Certificate of Title No. 7650 of the Register of Deeds of
Mandaluyong   City,   UPON   THE   PAYMENT   OF
₱200,000.00,   with   12%   legal   interest   from   April   30,
1992, by respondents within NINETY DAYS FROM
THE FINALITY OF THIS DECISION.
Costs against the petitioner.
SO ORDERED.
ARTURO D. BRION
Associate Justice
8
9
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 118305 February 12, 1998
AYALA   INVESTMENT   &   DEVELOPMENT   CORP.   and
ABELARDO   MAGSAJO, petitioners,
vs.
COURT   OF   APPEALS   and   SPOUSES   ALFREDO   &
ENCARNACION CHING, respondents.
MARTINEZ, J.:
Under Article 161 of the Civil Code, what debts and obligations
contracted by the husband alone are considered "for the benefit of
the   conjugal   partnership"   which   are   chargeable   against   the
conjugal partnership? Is a surety agreement or an accommodation
contract   entered   into   by   the   husband   in   favor   of   his   employer
within the contemplation of the said provision?
These   are   the   issues   which   we   will   resolve   in   this   petition   for
review.
The   petitioner   assails   the   decision   dated   April   14,   1994   of   the
respondent   Court   of   Appeals   in   "Spouses   Alfredo   and
Encarnacion Ching   vs. Ayala Investment   and   Development
Corporation,   et.   al.,"   docketed   as   CA­G.R.   CV   No.
29632,1 upholding   the   decision   of   the   Regional   Trial   Court   of
Pasig, Branch 168, which ruled that the  conjugal partnership of
gains of  respondents­spouses Alfredo and Encarnacion Ching is
not   liable   for   the   payment  of   the   debts   secured   by  respondent­
husband Alfredo Ching.
A chronology of the essential antecedent facts is necessary for a
clear understanding of the case at bar.
Philippine   Blooming   Mills   (hereinafter   referred   to   as   PBM)
obtained a P50,300,000.00 loan from petitioner Ayala Investment
and Development Corporation (hereinafter referred to as AIDC).
As added security for the credit line extended to PBM, respondent
Alfredo   Ching,   Executive   Vice   President   of   PBM,   executed
security agreements on December 10, 1980 and on March 20, 1981
making   himself   jointly   and   severally   answerable   with   PBM's
indebtedness to AIDC.
PBM failed to pay the loan. Thus, on July 30, 1981, AIDC filed a
case   for   sum   of   money   against   PBM   and   respondent­husband
Alfredo   Ching   with   the   then   Court   of   First   Instance   of   Rizal
(Pasig), Branch VIII, entitled "Ayala Investment and Development
Corporation  vs. Philippine  Blooming Mills and Alfredo Ching,"
docketed as Civil Case No. 42228.
After   trial,   the   court   rendered   judgment   ordering   PBM   and
respondent­husband   Alfredo   Ching   to   jointly   and   severally   pay
AIDC the principal amount of P50,300,000.00 with interests.
Pending appeal of the judgment in Civil Case No. 42228, upon
motion   of   AIDC,   the   lower   court   issued   a   writ   of   execution
pending   appeal.   Upon   AIDC's   putting   up   of   an   P8,000,000.00
bond,   a   writ   of   execution   dated   May   12,   1982   was   issued.
Thereafter,   petitioner   Abelardo   Magsajo,   Sr.,   Deputy   Sheriff   of
Rizal and appointed sheriff in Civil Case No. 42228, caused the
issuance   and   service   upon   respondents­spouses   of   a   notice   of
sheriff   sale   dated   May   20,   1982   on   three   (3)   of   their   conjugal
properties. Petitioner Magsajo then scheduled the auction sale of
the properties levied.
On June  9, 1982, private  respondents filed a case  of  injunction
against petitioners with the then Court of First Instance of Rizal
(Pasig),   Branch   XIII,   to   enjoin   the   auction   sale   alleging   that
petitioners   cannot   enforce   the   judgment   against   the   conjugal
partnership levied on the ground that, among others, the subject
loan   did   not   redound   to   the   benefit   of   the   said   conjugal
partnership. 2 Upon application of  private respondents, the lower
court   issued   a   temporary   restraining   order   to   prevent   petitioner
Magsajo   from   proceeding   with   the   enforcement   of   the   writ   of
execution and with the sale of the said properties at public auction.
AIDC   filed   a   petition   for certiorari before   the   Court   of
Appeals,3 questioning the order  of  the lower  court enjoining the
sale. Respondent Court of Appeals issued a Temporary Restraining
Order on June 25, 1982, enjoining the lower court 4 from enforcing
its Order of June 14, 1982, thus paving the way for the scheduled
auction sale of respondents­spouses conjugal properties.
On June 25, 1982, the auction sale took place. AIDC being the
only bidder, was issued a Certificate of Sale by petitioner Magsajo,
which   was   registered   on   July   2,   1982.   Upon   expiration   of   the
redemption period, petitioner sheriff issued the final deed of sale
on August 4, 1982 which was registered on August 9, 1983.
In the meantime, the respondent court, on August 4, 1982, decided
CA­G.R. SP No. 14404, in this manner:
WHEREFORE,   the   petition   for certiorari in   this   case   is
granted and the challenged order of the respondent Judge
dated June 14, 1982 in Civil Case No. 46309 is hereby set
10
aside and nullified. The same petition insofar as it seeks to
enjoin   the   respondent   Judge   from   proceeding   with   Civil
Case No. 46309 is, however, denied. No pronouncement is
here made as to costs. . . . 5
On September 3, 1983, AIDC filed a motion to dismiss the petition
for injunction filed before Branch XIII of the CFI of Rizal (Pasig)
on the ground that the same had become moot and academic with
the consummation of the sale. Respondents filed their opposition to
the motion arguing, among others, that where a third party who
claim   is   ownership   of   the   property   attached   or   levied   upon,   a
different legal situation is presented; and that in this case, two (2)
of   the   real   properties   are   actually   in   the   name   of   Encarnacion
Ching, a non­party to Civil Case No. 42228.
The lower court denied the motion to dismiss. Hence, trial on the
merits proceeded. Private respondents presented several witnesses.
On the other hand, petitioners did not present any evidence.
On September 18, 1991, the trial court promulgated its decision
declaring the sale on execution null and void. Petitioners appealed
to the respondent court, which was docketed as CA­G.R. CV No.
29632.
On April 14, 1994, the respondent court promulgated the assailed
decision, affirming the decision of the regional trial court. It held
that:
The loan procured from respondent­appellant AIDC was for
the advancement and benefit of Philippine Blooming Mills
and   not   for   the   benefit   of   the   conjugal   partnership   of
petitioners­appellees.
x x x           x x x          x x x
As to the applicable law, whether it is Article 161 of the
New Civil Code or Article 1211 of the Family Code­suffice
it to say that the two provisions are substantially the same.
Nevertheless, We agree with the trial court that the Family
Code is the applicable law on the matter . . . . . . .
Article 121 of the Family Code provides that "The conjugal
partnership   shall   be   liable   for:   .   .   .   (2)   All   debts   and
obligations contracted during the marriage by the designated
Administrator­Spouse   for   the   benefit   of   the   conjugal
partnership of gains . . . ." The burden of proof that the debt
was contracted for the benefit of the conjugal partnership of
gains, lies with the creditor­party litigant claiming as such.
In   the   case   at   bar,   respondent­appellant   AIDC   failed   to
prove that the debt was contracted by appellee­husband, for
the benefit of the conjugal partnership of gains.
The dispositive portion of the decision reads:
WHEREFORE, in view of  all the foregoing, judgment is
hereby rendered DISMISSING the appeal. The decision of
the Regional Trial Court is AFFIRMED in toto.6
Petitioner filed a Motion for Reconsideration which was denied by
the respondent court in a Resolution dated November 28, 1994.7
Hence,   this   petition   for   review.   Petitioner   contends   that   the
"respondent court erred in ruling that the conjugal partnership of
private   respondents   is   not   liable   for   the   obligation   by   the
respondent­husband."
Specifically,   the   errors   allegedly   committed   by   the   respondent
court are as follows:
I.   RESPONDENT   COURT   ERRED   IN   RULING
THAT   THE   OBLIGATION   INCURRED
RESPONDENT   HUSBAND   DID   NOT   REDOUND
TO   THE   BENEFIT   OF   THE   CONJUGAL
PARTNERSHIP OF THE PRIVATE RESPONDENT.
II.   RESPONDENT   COURT   ERRED   IN   RULING
THAT THE ACT OF RESPONDENT HUSBAND IN
SECURING THE SUBJECT LOAN IS NOT PART OF
HIS   INDUSTRY,   BUSINESS   OR   CAREER   FROM
WHICH HE SUPPORTS HIS FAMILY.
Petitioners in their appeal point out that there is no need to prove
that actual benefit redounded to the benefit of the partnership; all
that is necessary, they say, is that the transaction was entered into
for the benefit of the conjugal partnership. Thus, petitioners aver
that:
The wordings of Article 161 of the Civil Code is very clear:
for the partnership to be held liable, the husband must have
contracted the debt "for the benefit of the partnership, thus:
Art. 161. The conjugal partnership shall be liable for:
1) all debts and obligations contracted by the husband
for the benefit of the conjugal partnership . . . .
There is a difference between the phrases: "redounded to the
benefit of" or "benefited from" (on the one hand) and "for
the benefit of (on the other). The former require that actual
benefit must have been realized; the latter requires only that
the   transaction   should   be   one   which   normally   would
produce benefit to the partnership, regardless of whether or
not actual benefit accrued.8
We do not agree with petitioners that there is a difference between
the terms "redounded to the benefit of" or "benefited from" on the
one hand; and "for the benefit of" on the other. They mean one and
the same thing. Article 161 (1) of the Civil Code and Article 121
(2) of the Family Code are similarly worded, i.e., both use the term
"for the benefit of." On the other hand, Article 122 of the Family
Code provides that "The payment of personal debts by the husband
or the wife before or during the marriage shall not be charged to
the conjugal partnership except insofar as they redounded to the
benefit   of   the   family."   As   can   be   seen,   the   terms   are   used
interchangeably.
Petitioners further contend that the ruling of the respondent court
runs   counter   to   the   pronouncement   of   this   Court   in   the   case
of Cobb­Perez vs. Lantin,9 that the husband as head of the family
and as administrator  of  the  conjugal partnership is presumed to
have   contracted obligations  for  the   benefit  of  the   family  or  the
conjugal partnership.
Contrary to the contention of  the petitioners, the  case of Cobb­
Perez is not applicable in the case at bar. This Court has, on several
instances,   interpreted   the   term   "for   the   benefit   of   the   conjugal
partnership."
In the cases of Javier vs. Osmeña, 10 Abella de Diaz vs. Erlanger &
Galinger,   Inc., 11 Cobb­Perez   vs. Lantin 12 and G­Tractors,
Inc. vs. Court of Appeals, 13 cited by the petitioners, we held that:
The debts contracted by the  husband during the marriage
relation, for and in the exercise of the industry or profession
by which he contributes toward the support of his family,
are not his personal and private debts, and the products or
income from the wife's own property, which, like those of
her  husband's, are liable  for  the payment of the marriage
expenses,   cannot   be   excepted   from   the   payment   of   such
debts. (Javier)
The   husband,   as   the   manager   of   the   partnership   (Article
1412, Civil Code), has a right to embark the partnership in
an ordinary commercial enterprise for gain, and the fact that
the wife may not approve of a venture does not make it a
private and personal one of the husband. (Abella de Diaz)
Debts contracted by the husband for and in the exercise of
the  industry or profession by which he  contributes to the
support of the family, cannot be deemed to be his exclusive
and private debts. (Cobb­Perez).
. . . if he incurs an indebtedness in the legitimate pursuit of
his   career   or   profession   or   suffers   losses   in   a   legitimate
11
business,   the   conjugal   partnership   must   equally   bear   the
indebtedness and the losses, unless he deliberately acted to
the prejudice of his family. (G­Tractors)
However, in the cases of Ansaldo vs. Sheriff of Manila, Fidelity
Insurance   &   Luzon   Insurance   Co.,14 Liberty   Insurance
Corporation   vs. Banuelos, 15 and Luzon   Surety   Inc. vs. De
Garcia, 16 cited by the respondents, we ruled that:
The fruits of the paraphernal property which form part of
the   assets   of   the   conjugal   partnership,   are   subject   to   the
payment of the debts and expenses of the spouses, but not to
the   payment   of   the   personal   obligations   (guaranty
agreements) of the husband, unless it be proved that such
obligations were productive of some benefit to the family."
(Ansaldo; parenthetical phrase ours.)
When   there   is   no   showing   that   the   execution   of   an
indemnity   agreement   by   the   husband   redounded   to   the
benefit of his family, the undertaking is not a conjugal debt
but an obligation personal to him. (Liberty Insurance)
In   the   most   categorical   language,   a   conjugal   partnership
under Article 161 of the new Civil Code is liable only for
such "debts and obligations contracted by the husband for
the benefit of the conjugal partnership." There must be the
requisite   showing   then   of   some   advantage   which   clearly
accrued to the welfare of the spouses. Certainly, to make a
conjugal   partnership   respond   for   a   liability   that   should
appertain to the husband alone is to defeat and frustrate the
avowed objective of the new Civil Code to show the utmost
concern for the solidarity and well­being of the family as a
unit. The husband, therefore, is denied the power to assume
unnecessary and unwarranted risks to the financial stability
of the conjugal partnership. (Luzon Surety, Inc.)
From the foregoing jurisprudential rulings of this Court, we can
derive the following conclusions:
(A)   If   the   husband   himself   is   the   principal   obligor   in   the
contract, i.e., he  directly  received the  money and services to be
used in or for his own business or his own profession, that contract
falls within the term . . . . obligations for the benefit of the conjugal
partnership." Here, no actual benefit may be proved. It is enough
that the benefit to the family is apparent at the time of the signing
of the contract. From the very nature of the contract of loan or
services,   the   family   stands   to   benefit   from   the   loan   facility   or
services   to   be   rendered   to   the   business   or   profession   of   the
husband. It is immaterial, if in the end, his business or profession
fails   or   does   not   succeed.   Simply   stated,   where   the   husband
contracts   obligations   on   behalf   of   the   family   business,   the   law
presumes, and rightly so, that such obligation will redound to the
benefit of the conjugal partnership.
(B)   On   the   other   hand,   if   the   money   or   services   are   given   to
another   person   or   entity,   and   the   husband   acted   only   as
a surety or guarantor,   that   contract   cannot,   by   itself,   alone   be
categorized as  falling  within  the  context  of  "obligations  for   the
benefit   of   the   conjugal   partnership."   The   contract   of   loan   or
services is clearly for the benefit of the principal debtor and not for
the surety or his family. No presumption can be inferred that, when
a   husband   enters   into   a   contract   of   surety   or   accommodation
agreement, it is "for the benefit of the conjugal partnership." Proof
must be presented to establish benefit redounding to the conjugal
partnership.
Thus, the distinction between the Cobb­Perez case, and we add,
that of the three other companion cases, on the one hand, and that
of   Ansaldo,   Liberty   Insurance   and  Luzon   Surety,  is   that   in  the
former, the husband contracted the obligation for his own business;
while in the latter, the husband merely acted as a surety for the
loan contracted by another for the latter's business.
The   evidence   of   petitioner   indubitably   show   that   co­respondent
Alfredo Ching signed as surety for the P50M loan contracted on
behalf of PBM. petitioner should have adduced evidence to prove
that Alfredo Ching's acting as surety redounded to the benefit of
the conjugal partnership. The reason for this is as lucidly explained
by the respondent court:
The loan procured from respondent­appellant AIDC was for
the advancement and benefit of Philippine Blooming Mills
and   not   for   the   benefit   of   the   conjugal   partnership   of
petitioners­appellees.   Philippine   Blooming   Mills   has   a
personality   distinct   and   separate   from   the   family   of
petitioners­appellees   —   this   despite   the   fact   that   the
members of the said family happened to be stockholders of
said corporate entity.
x x x           x x x          x x x
. . . . The burden of proof that the debt was contracted for
the benefit of the conjugal partnership of gains, lies with the
creditor­party litigant claiming as such. In the case at bar,
respondent­appellant AIDC failed to prove that the debt was
contracted   by   appellee­husband,   for   the   benefit   of   the
conjugal  partnership   of  gains.  What  is   apparent  from  the
facts of the case is that the judgment debt was contracted by
or   in   the   name   of   the   Corporation   Philippine   Blooming
Mills and appellee­husband only signed as surety thereof.
The   debt   is   clearly   a   corporate   debt   and   respondent­
appellant's   right   of   recourse   against   appellee­husband   as
surety is only to the extent of his corporate stockholdings. It
does not extend to the conjugal partnership of gains of the
family of petitioners­appellees. . . . . . .17
Petitioners   contend   that   no   actual   benefit   need   accrue   to   the
conjugal partnership. To support this contention, they cite Justice
J.B.L. Reyes' authoritative opinion in the Luzon Surety Company
case:
I concur in the result, but would like to make of record that,
in   my   opinion,   the   words   "all   debts   and   obligations
contracted by the husband for the benefit of the conjugal
partnership" used in Article 161 of the Civil Code of the
Philippines   in   describing   the   charges   and   obligations   for
which the conjugal partnership is liable do not require that
actual   profit   or   benefit   must   accrue   to   the   conjugal
partnership from the husband's transaction; but it suffices
that   the   transaction   should   be   one   that   normally   would
produce such benefit for the partnership. This is the ratio
behind our ruling in Javier vs. Osmeña, 34 Phil. 336, that
obligations incurred by the husband in the practice of his
profession are collectible from the conjugal partnership.
The   aforequoted   concurring   opinion   agreed   with   the   majority
decision that the conjugal partnership should not be made liable for
the surety agreement which was clearly for the benefit of a third
party. Such opinion merely registered an exception to what may be
construed as a sweeping statement that in all cases actual profit or
benefit   must   accrue   to   the   conjugal   partnership.   The   opinion
merely made it clear that no actual benefits to the family need be
proved in some cases such as in the Javier case. There, the husband
was the principal obligor himself. Thus, said transaction was found
to   be   "one   that   would   normally   produce   .   .   .   benefit   for   the
partnership." In the later case of G­Tractors, Inc., the husband was
also the principal obligor — not merely the surety. This latter case,
therefore, did not create any precedent. It did not also supersede
the   Luzon   Surety   Company   case,   nor   any   of   the   previous
accommodation contract cases, where this Court ruled that they
were for the benefit of third parties.
But it could be argued, as the petitioner suggests, that even in such
kind of contract of accommodation, a benefit for the family may
also   result, when   the   guarantee   is   in   favor   of   the   husband's
employer.
In the case at bar, petitioner claims that the benefits the respondent
family would reasonably anticipate were the following:
12
(a)  The   employment   of  co­respondent  Alfredo  Ching
would   be   prolonged   and   he   would   be   entitled   to  his
monthly salary of P20,000.00 for an extended length of
time because of the loan he guaranteed;
(b) The shares of stock of the members of his family
would   appreciate   if   the   PBM   could   be   rehabilitated
through the loan obtained;
(c) His prestige in the corporation would be enhanced
and his career would be boosted should PBM survive
because of the loan.
However, these are not the benefits contemplated by Article 161 of
the Civil Code. The benefits must be one directly resulting from
the loan. It cannot merely be a by­product or a spin­off of the loan
itself.
In   all   our   decisions   involving   accommodation   contracts   of   the
husband, 18 we  underscored the  requirement that:  "there  must  be
the requisite showing . . . of some advantage which clearly accrued
to the welfare of the spouses" or "benefits to his family" or "that
such  obligations   are   productive   of   some   benefit   to   the   family."
Unfortunately, the petition did not present any proof to show: (a)
Whether or not the corporate existence of PBM was prolonged and
for how many months or years; and/or (b) Whether or not the PBM
was saved by the loan and its shares of stock appreciated, if so,
how   much   and   how   substantial   was   the   holdings   of   the   Ching
family.
Such   benefits   (prospects   of   longer   employment   and   probable
increase in the value of stocks) might have been already apparent
or could be anticipated at the time the accommodation agreement
was   entered   into.   But   would   those   "benefits"   qualify   the
transaction as one of the "obligations . . . for the benefit of the
conjugal partnership"? Are indirect and remote probable benefits,
the ones referred to in Article 161 of the Civil Code? The Court of
Appeals   in   denying   the   motion   for   reconsideration,   disposed  of
these questions in the following manner:
No matter how one looks at it, the debt/credit respondents­
appellants is purely a corporate debt granted to PBM, with
petitioner­appellee­husband merely signing as surety. While
such   petitioner­appellee­husband,   as   such   surety,   is
solidarily   liable   with   the   principal   debtor   AIDC,   such
liability   under   the   Civil   Code   provisions   is   specifically
restricted by Article 122 (par. 1) of the Family Code, so that
debts for which the husband is liable may not be charged
against conjugal partnership properties. Article 122 of the
Family Code is explicit — "The payment of personal debts
 contracted by the husband or the wife before or during the
marriage shall not be  charged to the conjugal partnership
except   insofar   as   they   redounded   to   the   benefit   of   the
family.
Respondents­appellants   insist   that   the   corporate   debt   in
question falls under the exception laid down in said Article
122 (par. one). We do not agree. The loan procured from
respondent­appellant AIDC was for  the  sole advancement
and benefit of Philippine Blooming Mills and not for the
benefit of the conjugal partnership of petitioners­appellees.
.   .   .   appellee­husband   derives   salaries,   dividends   benefits
from  Philippine   Blooming   Mills   (the   debtor   corporation),
only  because   said  husband is  an  employee  of   said  PBM.
These   salaries   and   benefits,   are   not   the   "benefits"
contemplated by Articles 121 and 122 of the Family Code.
The "benefits" contemplated by the exception in Article 122
(Family Code) is that benefit derived directly from the use
of the loan. In the case at bar, the loan is a corporate loan
extended to PBM and used by PBM itself, not by petitioner­
appellee­husband or his family. The alleged benefit, if any,
continuously harped by respondents­appellants, are not only
incidental but also speculative. 19
We agree with the respondent court. Indeed, considering the odds
involved in guaranteeing a large amount (P50,000,000.00) of loan,
the probable prolongation of employment in PBM and increase in
value of its stocks, would be too small to qualify the transaction as
one "for the benefit" of the surety's family. Verily, no one could
say,   with   a   degree   of   certainty,   that   the   said   contract   is   even
"productive of some benefits" to the conjugal partnership.
We likewise agree with the respondent court (and this view is not
contested by the petitioners) that the provisions of the Family Code
is applicable in this case. These provisions highlight the underlying
concern of the law for the conservation of the conjugal partnership;
for the husband's duty to protect and safeguard, if not augment, not
to dissipate it.
This is the underlying reason why the Family Code clarifies that
the obligations entered into by one of the spouses must be those
that redounded to the benefit of the family and that the measure of
the   partnership's   liability   is   to   "the   extent   that   the   family   is
benefited."20
These  are   all  in  keeping  with   the  spirit   and  intent   of  the  other
provisions of the Civil Code which prohibits any of the spouses to
donate   or   convey   gratuitously   any   part   of   the   conjugal
property. 21 Thus, when co­respondent Alfredo Ching entered into
a surety agreement he, from then on, definitely put in peril the WHEREFORE, the petition for review should be, as it is hereby,
conjugal property (in this case, including the family home)  and DENIED for lack of merit.
placed   it   in   danger   of   being   taken   gratuitously   as   in   cases   of
SO ORDERED.
donation.
Regalado, Melo, Puno and Mendoza, JJ., concur.
In the second assignment of error, the petitioner advances the view
that acting as surety is part of the business or profession of the
respondent­husband.
This theory is new as it is novel.
The respondent court correctly observed that:
Signing as a surety is certainly not an exercise of an industry
or   profession,   hence   the   cited   cases   of Cobb­Perez
vs. Lantin; Abella   de   Diaz   vs. Erlanger   &   Galinger; G­
Tractors,   Inc. vs. CA do   not   apply   in   the   instant   case.
Signing as a surety is not embarking in a business.22
We are likewise of the view that no matter how often an executive
acted or was persuaded to act, as a surety for his own employer,
this should not be taken to mean that he had thereby embarked in
the business of suretyship or guaranty.
This is not to say, however, that we are unaware that executives are
often asked to stand as surety for their company's loan obligations.
This   is   especially   true   if   the   corporate   officials   have   sufficient
property   of   their   own;   otherwise,   their   spouses'   signatures   are
required in order to bind the conjugal partnerships.
The fact that on several occasions the lending institutions did not
require the signature of the wife and the husband signed alone does
not mean that being a surety became part of his profession. Neither
could he be presumed to have acted for the conjugal partnership.
Article 121, paragraph 3, of the Family Code is emphatic that the
payment of personal debts contracted by the husband or the wife
before or during the marriage shall not be charged to the conjugal
partnership except to the extent that they redounded to the benefit
of the family.
Here, the property in dispute also involves the family home. The
loan is a corporate loan not a personal one. Signing as a surety is
certainly not an exercise of an industry or profession nor an act of
administration for the benefit of the family.
On the basis of the facts, the rules, the law and equity, the assailed
decision should be upheld as we now uphold it. This is, of course,
without prejudice to petitioner's right to enforce the obligation in
its   favor   against   the   PBM   receiver   in   accordance   with   the
rehabilitation  program and payment schedule  approved or  to be
approved by the Securities & Exchange Commission.
13
14
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L­59731               January 11, 1990
ALFREDO CHING, petitioner,
vs.
THE HONORABLE COURT OF APPEALS & PEDRO  is   hereby   cancelled   and   the   Register   of   Deeds   of   the
ASEDILLO, respondents.
Joaquin   E.   Chipeco   &   Lorenzo   D.   Fuggan   for   petitioners.
Edgardo Salandanan for private respondent.
PARAS, J.:
This is a petition for review on certiorari which seeks to nullify the
decision of respondent Court of Appeals (penned by Hon. Rodolfo
A. Nocon with the concurrence of Hon. Crisolito Pascual and Juan
A.   Sison)   in   CA­G.R.   No.   12358­SP   entitled   Alfredo   Ching   v.
Hon. M. V. Romillo, et al. which in effect affirmed the decision of
the   Court   of   First   Instance   of   Rizal,   now   Regional   Trial   Court
(penned   by   Judge   Manuel   V.   Romillo,   Jr.   then   District   Judge,
Branch   XXVII   Pasay   City)   granting ex­parte the   cancellation   of
title   registered   in   the   name   of   Ching   Leng   in   favor   of   Pedro
Asedillo in Civil Case No. 6888­P entitled Pedro Asedillo v. Ching
Leng and/or Estate of Ching Leng.
The facts as culled from the records disclose that:
In May 1960, Decree No. N­78716 was issued to spouses Maximo
Nofuente and Dominga Lumandan in Land Registration Case No.
N­2579   of   the   Court   of   First   Instance   of   Rizal   and   Original
Certificate of Title No. 2433 correspondingly given by the Register
of   Deeds   for   the   Province   of   Rizal   covering   a   parcel   of   land
situated at Sitio of Kay­Biga Barrio of San Dionisio, Municipality
of Paranaque, Province of  Rizal, with an area of 51,852 square
meters (Exhibit "7", p. 80, CA, Rollo).
In August 1960, 5/6 portion of the property was reconveyed by
said   spouses   to   Francisco,   Regina,   Perfects,   Constancio   and
Matilde  all surnamed Nofuente and Transfer  Certificate of Title
No. 78633 was issued on August 10, 1960 accordingly (Exhibit
"8", pp. 81 and 82, Ibid.).
By virtue of a sale to Ching Leng with postal address at No. 44
Libertad Street, Pasay City, Transfer Certificate of Title No. 91137
was   issued   on   September   18,   1961   and   T.C.T.   No.   78633   was
deemed cancelled. (Exhibit "5­2", pp. 76­77 and 83, Ibid.).
On October 19, 1965, Ching Leng died in Boston, Massachusetts,
United States of America. His legitimate son Alfredo Ching filed
with the Court of First Instance of Rizal (now RTC) Branch III,
Pasay City a petition for administration of the estate of deceased
Ching Leng docketed as Sp. Proc. No. 1956­P. Notice of hearing
on   the   petition   was   duly   published   in   the   "Daily   Mirror",   a
newspaper   of   general   circulation   on   November   23   and   30   and
December   7,   1965.   No   oppositors   appeared   at   the   hearing   on
December 16, 1965, consequently after presentation of evidence
petitioner   Alfredo   Ching   was   appointed   administrator   of   Ching
Leng's estate on December 28, 1965 and letters of administration
issued on January 3, 1966 (pp. 51­53, Rollo). The land covered by
T.C.T.   No.   91137   was   among   those   included   in   the   inventory
submitted to the court (p. 75, Ibid.).
Thirteen (13) years after Ching Leng's death, a suit against him
was   commenced   on   December   27,   1978   by   private   respondent
Pedro   Asedillo   with   the   Court   of   First   Instance   of   Rizal   (now
RTC),   Branch   XXVII,   Pasay   City   docketed   as   Civil   Case   No.
6888­P   for   reconveyance   of   the   abovesaid   property   and
cancellation of T.C.T. No. 91137 in his favor based on possession
(p. 33, Ibid.). Ching Leng's last known address is No. 44 Libertad
Street, Pasay City which appears on the face of T.C.T. No. 91137
(not No. 441 Libertad   Street,   Pasay   City,   as   alleged   in   private
respondent's complaint). (Order dated May 29, 1980, p. 55, Ibid.).
An   amended   complaint   was  filed  by   private   respondent   against
Ching   Leng   and/or   Estate   of   Ching   Leng   on   January   30,   1979
alleging "That on account of the fact that the defendant has been
residing abroad up to the present, and it is not known whether the
defendant is still alive or dead, he or his estate may be served by
summons and other processes only by publication;" (p. 38, Ibid.).
Summons   by   publication   to   Ching   Leng   and/or   his   estate   was
directed by the trial court in its order dated February 7, 1979. The
summons   and   the   complaint   were   published   in   the   "Economic
Monitor", a newspaper of  general circulation in the province of
Rizal including Pasay City on March 5, 12 and 19, 1979. Despite
the   lapse   of   the   sixty   (60)   day   period   within   which   to   answer
defendant failed to file a responsive  pleading and on motion of
counsel   for   the   private   respondent,   the   court a   quo in   its   order
dated May 25, 1979, allowed the presentation of evidence ex­parte.
A judgment by default was rendered on June 15, 1979, the decretal
portion of which reads:
WHEREFORE,   finding   plaintiffs   causes   of   action   in   the
complaint   to   be   duly   substantiated   by   the   evidence,
15
judgment is hereby rendered in favor of  the  plaintiff and
against the defendant declaring the former (Pedro Asedillo)
to be the true and absolute owner of the property covered by
T.C.T. No. 91137; ordering the defendant to reconvey the
said   property   in   favor   of   the   plaintiff;   sentencing   the
defendant Ching Leng and/or the administrator of his estate
to   surrender   to  the   Register  of   Deeds  of  the  Province   of
Rizal the owner's copy of T.C.T. No. 91137 so that the same
may be cancelled failing in which the said T.C.T. No. 91137
Province of Rizal is hereby ordered to issue, in lieu thereof,
a new transfer certificate of title over the said property in the
name   of   the   plaintiff   Pedro   Asedillo   of   legal   age,   and   a
resident   of   Estrella   Street,   Makati,   Metro   Manila,   upon
payment of the fees that may be required therefor, including
the realty taxes due the Government.
IT IS SO ORDERED. (pp. 42­44, Ibid.)
Said decision was likewise served by publication on July 2, 9 and
16, 1979 pursuant to Section 7 of Rule 13 of the Revised Rules of
Court (CA Decision, pp. 83­84, Ibid.). The title over the property
in   the   name   of   Ching   Leng   was   cancelled   and   a   new   Transfer
Certificate of Title was issued in favor of Pedro Asedillo (p. 77,
CA Rollo) who subsequently sold the property to Villa Esperanza
Development, Inc. on September 3, 1979 (pp. 125­126, Ibid.).
On   October   29,   1979   petitioner   Alfredo   Ching   learned   of   the
abovestated decision. He filed a verified petition on November 10,
1979 to set it aside as null and void for lack of jurisdiction which
was   granted   by   the   court   on   May   29,   1980   (penned   by   Hon.
Florentino de la Pena, Vacation Judge, pp. 54­59, Rollo).
On motion of counsel for private respondent the said order of May
29, 1980 was reconsidered and set aside, the decision dated June
15, 1979 aforequoted reinstated in the order dated September 2,
1980. (pp. 60­63, Ibid.)
On October 30, 1980, petitioner filed a motion for reconsideration
of the said latter order but the same was denied by the trial court on
April 12, 1981 (pp. 77­79, Ibid.)
Petitioner filed an original petition for certiorari with the Court of
Appeals but the same was dismissed on September 30, 1981. His
motion for reconsideration was likewise denied on February 10,
1982 (pp. 81­90, Ibid.)
Private respondent Pedro Asedillo died on June 7, 1981 at Makati,
Metro Manila during the pendency of the case with the Court of
Appeals (p. 106, CA Rollo).
Hence, the instant petition.
Private   respondent's   comment   was   filed   on   June   1,   1982   (p.
117, Ibid.) in compliance with the resolution dated April 26, 1982
(p. 109, Ibid.) Petitioner filed a reply to comment on June 18, 1982
(p. 159, Ibid ), and the Court gave due course to the petition in the
resolution of June 28, 1982 (p. 191, Ibid.)
Petitioner raised the following:
ASSIGNMENTS OF ERROR
I
WHETHER   OR   NOT   A   DEAD   MAN   CHING   LENG
AND/OR   HIS   ESTATE   MAY   BE   VALIDLY   SERVED
WITH SUMMONS AND DECISION BY PUBLICATION.
II
WHETHER   OR   NOT   AN   ACTION   FOR
RECONVEYANCE   OF   PROPERTY   AND
CANCELLATION OF TITLE IS IN PERSONAM, AND IF
SO, WOULD A DEAD MAN AND/OR HIS ESTATE BE
BOUND BY SERVICE OF SUMMONS AND DECISION
BY PUBLICATION.
III
WHETHER   OR   NOT   THE   PROCEEDINGS   FOR
RECONVEYANCE   AND   CANCELLATION   OF   TITLE
CAN BE HELD EX­PARTE.
IV
WHETHER OR NOT THE TRIAL COURT ACQUIRED
JURISDICTION   OVER   THE   SUBJECT   MATTER   AND
THE PARTIES.
V Plastic Products, Inc. (70 SCRA 475 [1976]) the decision of the
WHETHER   OR   NOT   PRIVATE   RESPONDENT   IS
GUILTY OF LACHES IN INSTITUTING THE ACTION
FOR   RECONVEYANCE   AFTER   THE   LAPSE   OF   19
YEARS   FROM   THE   TIME   THE   DECREE   OF
REGISTRATION WAS ISSUED.
Petitioner's appeal hinges on whether or not the Court of Appeals
has   decided   a   question   of   substance   in   a   way   probably   not   in
accord with law or with the applicable decisions of the Supreme
Court.
Petitioner avers that an action for reconveyance and cancellation of
title is in personam and the court a quo never acquired jurisdiction
over   the   deceased   Ching   Leng   and/or   his   estate   by   means   of
service of summons by publication in accordance with the ruling
laid down in Ang Lam v. Rosillosa et al., 86 Phil. 448 [1950].
On the  other  hand, private respondent argues that an action for
cancellation of title is quasi in rem, for while the judgment that
may be rendered therein is not strictly a judgment in in rem, it fixes
and settles the title to the property in controversy and to that extent
partakes of the nature of the judgment in rem, hence, service of
summons by publication may be allowed unto Ching Leng who on
the face of the complaint was a non­resident of the Philippines in
line with the doctrine enunciated in Perkins v. Dizon, 69 Phil. 186
[1939].
The petition is impressed with merit.
An action to redeem, or to recover title to or possession of, real
property   is   not  an  action in   rem or   an  action  against   the   whole
world, like a land registration proceeding or the probate of a will; it
is an action in personam, so much so that a judgment therein is
binding only upon the parties properly impleaded and duly heard
or   given   an   opportunity   to   be   heard.   Actions in   personam and
actions in rem differ in that the former are directed against specific
persons and seek personal judgments, while the latter are directed
against   the   thing   or   property   or   status   of   a   person   and   seek
judgments   with   respect   thereto   as   against   the   whole   world.   An
action   to   recover   a   parcel   of   land   is   a   real   action   but   it   is   an
action in   personam,   for   it   binds   a   particular   individual   only
although  it   concerns  the   right  to  a   tangible  thing   (Ang  Lam  v.
Rosillosa, supra).
Private respondent's action for reconveyance and cancellation of
title being in personam, the judgment in question is null and void
for lack of jurisdiction over the person of the deceased defendant
Ching Leng. Verily, the action was commenced thirteen (13) years
after the latter's death. As ruled by this Court in Dumlao v. Quality
lower court insofar as the deceased is concerned, is void for lack of
jurisdiction over his person. He was not, and he could not have
been   validly   served   with   summons.   He   had   no   more   civil
personality. His juridical personality, that is fitness to be subject of
legal   relations,   was   lost   through   death   (Arts.   37   and   42   Civil
Code).
The   same   conclusion   would   still   inevitably   be   reached
notwithstanding joinder of Ching Leng's estate as co­defendant. it
is a well­settled rule that an estate can sue or be sued through an
executor or administrator in his representative capacity (21 Am. Jr.
872).   Contrary   to   private   respondent's   claims,   deceased   Ching
Leng is a resident of 44 Libertad Street, Pasay City as shown in his
death certificate and T. C. T. No. 91137 and there is an on­going
intestate proceedings in the same court, Branch III commenced in
1965, and notice  of  hearing thereof duly published in the  same
year. Such misleading and misstatement of facts demonstrate lack
16
of candor on the part of private respondent and his counsel, which
is censurable.
The complaint for cancellation of Ching Leng's Torrens Title must
be filed in the original land registration case, RTC, Pasig, Rizal,
sitting as a land registration court in accordance with Section 112
of the Land Registration Act (Act No. 496, as amended) not in CFI
Pasay City in connection with, or as a mere incident in Civil Case
No. 6888­P (Estanislao v. Honrado, 114 SCRA 748 [1982]).
Section   112   of   the   same   law   requires   "notice   to   all   parties   in
interest." Since Ching Leng was already in the other world when
the summons was published he could not have been notified at all
and   the   trial   court   never   acquired   jurisdiction   over   his   person.
The ex­parte proceedings for cancellation of title could not have
been held (Estanislao v. Honrado, supra).
The cited case of Perkins v. Dizon, supra is inapplicable to the case
at bar since petitioner Perkins was a non­resident defendant sued in
Philippine courts and sought to be excluded from whatever interest
she   has   in   52,874   shares   of   stocks   with   Benguet   Consolidated
Mining Company. The action being a quasi in rem summons by
publication satisfied the constitutional requirement of due process.
The   petition   to   set   aside   the   judgment   for   lack   of   jurisdiction
should have been granted and the amended complaint of private
respondent based on possession and filed only in 1978 dismissed
outrightly. Ching Leng is an innocent purchaser for value as shown
by the evidence adduced in his behalf by petitioner herein, tracing
back the roots of his title since 1960, from the time the decree of
registration was issued.
The   sole   remedy   of   the   landowner   whose   property   has   been
wrongfully or erroneously registered in another's name—after one
year from the date of the decree—is not to set aside the decree, but
respecting  the   decree   as incontrovertible   and  no longer  open to
review, to bring an ordinary action in the ordinary court of justice
for   damages   if   the   property   has   passed   unto   the   hands   of   an
innocent   purchaser   for   value   (Sy,   Sr.   v.   Intermediate   Appellate
Court, G.R. No. 66742; Teoville Development Corporation v. IAC,
et al., G.R. No. 75011, June 16, 1988).
Failure to take steps to assert any rights over a disputed land for 19
years from the date of registration of title is fatal to the private
respondent's cause of action on the ground of laches. Laches is the
failure or neglect, for an unreasonable length of time to do that
which by exercising due diligence could or should have been done,
earlier;   it   is   negligence   or   omission   to   assert   a   right   within   a
reasonable time warranting a presumption that the party entitled to
assert it either has abandoned it or declined to assert it (Bailon­
Casilao   v.   Court   of   Appeals,   G.R.   No.   78178,   April   15,   1988; marriage. He  beats her  for  no justifiable  reason, humiliates and
Villamor v. Court of Appeals, G.R. No. 41508, June 27, 1988). embarrasses her, and denies her love, sexual comfort and loyalty.
During the time they lived together, they acquired properties. She
The real purpose of the Torrens system is to quiet title to land and
managed their pizza business and worked hard for its development.
to   stop   forever   any   question   as   to   its   legality.   Once   a   title   is
She prays for the declaration of the nullity of their marriage and for
registered,   the   owner   may   rest   secure,   without   the   necessity   of
the dissolution of the conjugal partnership of gains.
waiting in the portals of the court, or sitting on the "mirador su
casa," to avoid the possibility of losing his land (National Grains In   his   answer   to   the   complaint,   petitioner   averred   that   it   is
Authority v. IAC, 157 SCRA 388 [1988]). respondent who is psychologically incapacitated. He denied that
she was the one who managed the pizza business and claimed that
A Torrens title is generally a conclusive evidence of the ownership
he   exclusively   owns   the   properties   "existing   during   their
of   the   land   referred   to  therein   (Section   49,   Act   496).   A   strong
marriage."
presumption exists that Torrens titles are regularly issued and that
they   are   valid.   A   Torrens   title   is   incontrovertible   against   any In   her   reply,   respondent   alleged   that   "she   controlled   the   entire
"information   possessoria"   or   title   existing   prior   to   the   issuance generation   of   Fiesta   Pizza   representing   80%   of   the   total
thereof not annotated on the title (Salamat Vda. de Medina v. Cruz, management of the same and that all income from said business
G.R. No. 39272, May 4, 1988). are conjugal in nature."

PREMISES   CONSIDERED,   (1)   the   instant   petition   is   hereby The public prosecutor, in compliance with the directive of the trial

GRANTED; (2) the appealed decision of the Court of Appeals is court, and pursuant Section 48 of the Family Code, 1 certified that
hereby REVERSED and SET ASIDE; (3) the trial court's decision Republic of the Philippines no collusion exists between the parties in asking for the declaration
dated   June   15,   1979   and   the   Order   dated   September   2,   1980 SUPREME COURT of the nullity of their marriage and that he would appear for the
reinstating the same are hereby declared NULL and VOID for lack state to see to it that the evidence is not fabricated or suppressed.
THIRD DIVISION
of jurisdiction and (4) the complaint in Civil Case No. 6888­P is
Each party submitted a list of the properties with their valuation,
hereby DISMISSED. G.R. No. 159521 December 16, 2005
acquired during their union, thus:
SO ORDERED. FRANCISCO L. GONZALES, Petitioner,
  Valuation of  Valuation of 
Melencio­Herrera, Sarmiento and Regalado, JJ., concur. vs.
respondent petitioner (Rec
ERMINDA F. GONZALES, Respondents. (Record, p. 110) p. 111)
Padilla, J., took no part.
D E C I S I O N 1. Acropolis property None P 6,000,000
2. Baguio City property P 10,000,000 10,000,000
SANDOVAL­GUTIERREZ, J.: 3. Nasugbu, Batangas property 5,000,000 5,000,000
This   petition   for   review   on certiorari seeks   the   reversal   of   the 4. Corinthian house and lot 18,000,000 23,000,000
Decision dated April 2, 2003 and Resolution dated August 8, 2003, 5. Sagitarius condominium 2,500,000 2,000,000
both issued by the Court of Appeals in CA­G.R. CV No. 66041, 6. Office 30,000,000 24,000,000
entitled,   "Erminda   F.   Gonzales, plaintiff­ 7. Greenmeadows lot 10,000,000 15,000,000
appellee versus Francisco L. Gonzales, defendant­appellant." 8. White Plains 7,000,000 10,000,000
9. Corinthian lot 12,000,000 None
In   March   1977,   Francisco   Gonzales,   petitioner,   and   Erminda Personal Property (Vehicles)
Gonzales, respondent,  started  living  as  husband and wife.  After
1. Galant ’83 model None P 120,000
two (2) years, or on February 4, 1979, they got married. From this
2. Toyota Corona ’79 model ­ 80,000
union, four (4) children were born, namely: Carlo Manuel, Maria
3. Coaster ’77 model ­ 150,000
Andres, Maria Angelica and Marco Manuel.
4. Pajero ’89 model ­ 500,000
On   October   29,   1992,   respondent   filed   a   complaint   with   the 5. Corolla ’92 model ­ 180,000
Regional Trial Court, Branch 143, Makati City, for annulment of 6. L­300 ’90 model 350,000
marriage with prayer for support pendente lite, docketed as Civil 7. Mercedes Sedan ’79 model 220,000
Case   No.   32­31111.   The   complaint   alleges   that   petitioner   is 8. Pick­up ’89 model 100,000
psychologically   incapacitated   to   comply   with   the   obligations   of 9. Mercedes wagon ’80 model 300,000
17
 10. Nissan Sentra ’89 model
11. 8’Tamaraws
Evidence adduced during the trial show that petitioner used to beat
respondent   without   justifiable   reasons,   humiliating   and
embarrassing her in the presence of people and even in front of
their children. He has been afflicted with satyriasis, a personality
disorder characterized by excessive and promiscuous sex hunger
manifested   by   his   indiscriminate   womanizing.   The   trial   court
found that:
"The  evidence  adduced by plaintiff was overwhelming to prove
that the defendant by his infliction of injuries on the plaintiff, his
wife, and excessive and promiscuous hunger for sex, a personality
disorder  called satyriasis, was, at the  time  of  the  celebration of
marriage,   psychologically   incapacitated   to   comply   with   the
essential obligations of marriage although such incapacity became
manifest only after its solemnization. The defendant’s evidence, on
the other hand, on the psychological incapacity of plaintiff did not
have any evidentiary weight, the same being doubtful, unreliable,
unclear and unconvincing."
On February 12, 1997, the trial court rendered its Decision, the
dispositive portion of which reads:
"WHEREFORE, in view of the foregoing, judgment is rendered:
1)   Declaring   the   marriage   contracted   by   and   between
FRANCISCO L. GONZALEZ and ERMINDA F. FLORENTINO
solemnized by Rev. Fr. Alberto Ampil, S.J. on February 4, 1979, at
the Manila Hilton Chapel, Nuestra de Guia Parish, Ermita, Manila,
NULL and VOID ab initio with all legal effects as provided for
under applicable laws;
2)   Awarding   the   custody   of   minors   Maria   Andrea   and   Marco
Manuel to the plaintiff, and Carlo Manuel and Maria Angela with
rights   of   visitation   given   to   both   parties   under   an   arrangement
mutually acceptable to both of them;
3) Ordering the parties to deliver the children’s legitimes pursuant
to Article 50, in relation to Article 51 of the Family Code;
4)   Ordering   the   defendant   to   give   monthly   support   to   Maria
Andrea   and   Marco   Manuel   in   the   amount   of   Forty   Thousand
(₱40,000.00)   Pesos   within   five   (5)   days   of   each   corresponding
month delivered at the residence of the plaintiff staring January
1997 and thereafter;
200,000 5) Ordering the dissolution of the conjugal partnership of gains and
­ dividing   the   conjugal   properties   between   the   plaintiff   and   the
defendant as follows:
A. 1) Plaintiff’s share of real properties:
1. Corinthian lot ­­­­­­­­­­­­­­­­­­­­ ₱ 12,000,000
2. Acropolis property ­­­­­­­­­­­­­ 6,000,000
3. Baguio property ­­­­­­­­­­­­­­­­­ 10,000,000
4. Nasugbu property ­­­­­­­­­­­­­­ 5,000,000
5. Greenmeadows property ­­­­­ 12,500,000
6. Sagitarius condominium ­­­­­­ 2,250,000
₱ 47,750,000
2) Personal:
1. Pajero ’89 model ­­­­­­­­­­­­­­­ ₱ 500,000
2. L­300 ’90 model ­­­­­­­­­­­­­­­­ 350,000
3. Nissan Sentra ’89 model ­­­­­ 200,000
₱ 1,050,000
B. 1) Defendant’s share of real properties:
1. Corinthian house and lot ­­­­ ₱ 20,500,000
2. Office ­­­­­­­­­­­­­­­­­­­­­­­­­­­­­ 27,000,000
₱ 47,500,000
2) Personal:
1. Galant ’83 model ­­­­­­­­­­­­­­­ ₱ 120,000
2. Toyota Corona ’79 model ­­­­ 80,000
3. Coaster ’77 model ­­­­­­­­­­­­­­ 150,000
4. Corolla ’92 model ­­­­­­­­­­­­­­ 180,000
5. Mercedes Sedan ’79 model ­­­ 220,000
6. Pick­up ’89 model ­­­­­­­­­­­­­­ 100,000
7. Mercedes wagon ’80 model— 300,000
₱ 1,150,000
8. Four (4) Tamaraws ­­­­­­­­­­­­­
6) Ordering the plaintiff to pay the defendant in cash the amount of
₱2,196,125.
18
7)   Ordering   the   defendant   who   has   actual   possession   of   the
conjugal properties to deliver to plaintiff her share of the real and
personal properties, including four (4) Tamaraws, above­described,
and execute the necessary documents valid in law conveying the
title and ownership of said properties in favor of the plaintiff."
Not   satisfied   with   the   manner   their   properties   were   divided,
petitioner appealed to the Court of Appeals. He did not contest that
part   of   the   decision   which   declared   his   marriage   to   respondent
void ab initio.
In its Decision dated April 2, 2003, the Appellate Court affirmed
the assailed Decision of the trial court.
Petitioner filed a motion for reconsideration but it was denied in an
Order dated July 23, 1997.
Hence, the instant petition for review on certiorari.
The sole issue for our resolution is whether the court of Appeals
erred   in   ruling   that   the   properties   should   be   divided   equally
between the parties.
Let it be stressed that petitioner does not challenge the Appellate
Court’s   Decision   declaring   his   marriage   with   respondent   void.
Consequently,   their   property   relation   shall   be   governed   by   the
provisions of Article 147 of the Family Code quoted as follows:
"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 co­ownership.
In the absence of proof to the contrary, properties acquired while
they lived together shall be presumed to have been obtained by
their joint efforts, work or industry, and shall be owned by them in
equal  shares. For  purposes  of  this  Article,  a  party  who  did  not
participate in the acquisition by the other  party of  any property
shall   be   deemed   to   have   contributed   jointly   in   the   acquisition
thereof if the former's efforts consisted in the care and maintenance
of the family and of the household."
These provisions enumerate the two instances when the property
relations between spouses shall be governed by the rules on co­
ownership. These are: (1) when a man and woman capacitated to
marry each other live exclusively with each other as husband and
wife  without   the   benefit   of   marriage;  and  (2)   when  a   man  and
woman live together under a void marriage. Under this property
regime of co­ownership, properties 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.

Article 147 creates a presumption that properties acquired during
the  cohabitation of  the parties have  been acquired through their
joint efforts, work or industry and shall be owned by them in equal
shares. It further provides that a party who did not participate in
the acquisition by the other party of any property shall be deemed
to have contributed jointly in the acquisition thereof if the former’s
efforts consisted in the care and maintenance of the family and of
the household.

While   it   is   true   that   all   the   properties   were   bought   from   the
proceeds   of   the   pizza   business,   petitioner   himself   testified   that
respondent was not a plain housewife and that she helped him in
managing   the   business.   In   his   handwritten   letter   to   her   dated
September 6, 1989, he admitted that "You’ve helped me for what
we are now and I won’t let it be destroyed."

It   appeared   that   before   they   started   living   together,   petitioner

offered respondent to be his partner in his pizza business and to
take over its operations. Respondent started managing the business
in 1976. Her job was to: (1) take care of the daily operations of the
business; (2) manage the personnel; and (3) meet people during
inspection   and   supervision   of   outlets.   She   reported   for   work
everyday, even on Saturdays and Sundays, without receiving any
salary or allowance.

In petitions for review on certiorari under Rule 45 of the Rules of
Court, the general rule is that only questions of law may be raised
by the parties and passed upon by this Court. 2 Factual findings of
the Appellate Court are generally binding on, especially this Court,
when in complete accord with the findings of the trial court,3 as in
this case. This is because it is not our function to analyze or weigh
the evidence all over again.4

WHEREFOR,   the   instant   petition   is   hereby DENIED.   The

assailed Decision and Resolution of the Court of Appeals, in CA­
G.R. CV No. 66041, are AFFIRMED. Costs against petitioner.

SO ORDERED.

ANGELINA SANDOVAL­GUTIERREZ
Associate Justice

19
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 145222               April 24, 2009
SPOUSES   ROBERTO   BUADO   and   VENUS
BUADO, Petitioners,
vs.
THE HONORABLE COURT OF APPEALS, Former Division,
and ROMULO NICOL, Respondents.
D E C I S I O N
TINGA, J.:
Before   this   Court   is   a   petition   for   certiorari   assailing   the
Decision1 of the Court of Appeals in CA­G.R. CV No. 47029 and
its Resolution denying the motion for reconsideration thereof.
The case stemmed from the following factual backdrop:
On 30 April 1984, Spouses Roberto and Venus Buado (petitioners)
filed   a   complaint   for   damages   against   Erlinda   Nicol   (Erlinda)
with Branch   19 of   the   Regional   Trial   Court   (RTC)   of   Bacoor,
Cavite, docketed as Civil Case No. 84­33. Said action originated
from   Erlinda   Nicol’s   civil   liability   arising   from   the   criminal
offense of slander filed against her by petitioners.
On   6   April   1987,   the   trial   court   rendered   a   decision   ordering
Erlinda to pay damages. The dispositive portion reads:
Wherefore, judgment is hereby rendered in favor of the plaintiff[s]
and  against   defendant  ordering   the   latter   to   pay   the   former   the
amount of thirty thousand (₱30,000.00) pesos as moral damages,
five thousand (₱5,000.00) pesos as attorney’s fees and litigation
expenses, another five thousand (₱5,000.00) pesos as exemplary
damages and the cost of suit.2
Said decision was affirmed, successively, by the Court of Appeals
and this Court. It became final and executory on 5 March 1992.
On 14 October 1992, the trial court issued a writ of execution, a
portion of which provides:
Now, therefore, you are commanded that of the goods and chattels
of the defendant Erlinda Nicol, or from her estates or legal heirs,
you   cause   the   sum   in   the   amount   of   forty   thousand   pesos
(₱40,000.00),   Philippine   Currency,   representing   the   moral
damages,   attorney’s   fees   and   litigation   expenses   and   exemplary
damages and the cost of suit of the plaintiff aside from your lawful
fees on this execution and do likewise return this writ into court
within sixty (60) days from date, with your proceedings endorsed
hereon.
But   if   sufficient   personal   property   cannot   be   found   whereof   to
satisfy   this   execution   and   lawful   fees   thereon,   then   you   are
commanded that of the lands and buildings of said defendant you
make the said sum of money in the manner required by the Rules
of Court, and make return of your proceedings with this writ within
sixty (60) days from date.3
Finding Erlinda Nicol’s personal properties insufficient to satisfy
the judgment, the Deputy Sheriff issued a notice of levy on real
property   on   execution   addressed   to   the   Register   of   Deeds   of
Cavite.   The   notice   of   levy   was   annotated   on   the   Transfer
Certificate of Title No. T­125322.
On 20 November 1992, a notice of sheriff’s sale was issued.
Two (2) days before the public auction sale on 28 January 1993, an
affidavit   of   third­party   claim   from   one   Arnulfo   F.   Fulo   was
received by the deputy sheriff prompting petitioners to put up a
sheriff’s   indemnity   bond.   The   auction   sale   proceeded   with
petitioners as the highest bidder.
On 4 February 1993, a certificate of sale was issued in favor of
petitioners.
Almost   a   year   later   on   2   February   1994,   Romulo   Nicol
(respondent), the husband of Erlinda Nicol, filed a complaint for
annulment   of   certificate   of   sale   and   damages   with   preliminary
injunction against petitioners and the deputy sheriff. Respondent,
as plaintiff therein, alleged that the defendants, now petitioners,
connived and directly levied upon and execute his real property
without   exhausting   the   personal   properties   of   Erlinda   Nicol.
Respondent   averred   that   there   was   no   proper   publication   and
posting of the notice of sale. Furthermore, respondent claimed that
his property which was valued at ₱500,000.00 was only sold at a
"very low price" of  ₱51,685.00, whereas the judgment obligation
of   Erlinda   Nicol   was   only  ₱40,000.00.   The   case   was   assigned
to Branch 21 of the RTC of Imus, Cavite.
In response, petitioners filed a motion to dismiss on the grounds of
lack of jurisdiction and that they had acted on the basis of a valid
writ of execution. Citing De Leon v. Salvador,4 petitioners claimed
that respondent should have filed the case with Branch 19 where
the judgment originated and which issued the order of execution,
writ of execution, notice of levy and notice of sheriff’s sale.
20
In an Order5 dated 18 April 1994, the RTC dismissed respondent’s
complaint and ruled that Branch 19 has jurisdiction over the case,
thus:
As   correctly   pointed   out   by   the   defendants,   any   flaw   in   the
implementation   of   the   writ   of   execution   by   the   implementing
sheriff   must   be   brought   before   the   court   issuing   the   writ   of
execution. Besides, there are two (2) remedies open to the plaintiff,
if he feels that the property being levied on belongs to him and not
to the judgment debtor. The first remedy is to file a third­party
claim. If he fails to do this, a right is reserved to him to vindicate
his claim over the property by any proper action. But certainly, this
is not the proper action reserved to the plaintiff to vindicate his
claim  over  the  property  in  question  to  be  ventilated before   this
court. As earlier stated, this case should have been addressed to
Branch 19, RTC Bacoor as it was that court which issued the writ
of execution.6
Respondent moved for reconsideration but it was denied on 26 July
1994.
On appeal, the Court of Appeals reversed the trial court and held
that Branch 21 has jurisdiction to act on the  complaint filed by
appellant. The dispositive portion reads:
WHEREFORE, the Orders appealed from are hereby REVERSED
and SET ASIDE. This case is REMANDED to the Regional Trial
Court of Imus, Cavite, Branch 21 for further proceedings.
SO ORDERED.7
Petitioners’ motion for reconsideration was denied on 23 August
2000.   Hence,   the   instant   petition   attributing   grave   abuse   of
discretion on the part of the Court of Appeals.
A petition for certiorari is an extraordinary remedy that is adopted
to correct errors of jurisdiction committed by the lower court or
quasi­judicial agency, or when there is grave abuse of discretion on
the part of such court or agency amounting to lack or excess of
jurisdiction. Where the error is not one of jurisdiction, but of law
or fact which is a mistake of judgment, the proper remedy should
be appeal. In addition, an independent action for certiorari may be
availed of only when there is no appeal or any plain, speedy and
adequate remedy in the ordinary course of law.8
Nowhere in the petition was it shown that the jurisdiction of the
Court of Appeals was questioned. The issue devolves on whether
the husband of the judgment debtor may file an independent action
to protect the conjugal property subject to execution. The alleged
error therefore is an error of judgment which is a proper subject of
an appeal.
Nevertheless,   even   if   we   were   to   treat   this   petition   as   one   for
review, the case should still be dismissed on substantive grounds.
Petitioners maintain that Branch 19 retained jurisdiction over its
judgment to the exclusion of all other  co­ordinate courts for  its
execution   and   all   incidents   thereof,   in   line   with   De   Leon   v.
Salvador. Petitioners insist that respondent, who is the husband of
the   judgment   debtor,   is   not   the   "third   party"   contemplated   in
Section 17 (now Section 16), Rule 39 of the Rules of Court, hence
a separate action need not be filed. Furthermore, petitioners assert
that   the   obligation   of   the   wife   redounded   to   the   benefit   of   the
conjugal   partnership   and   cited   authorities   to   the   effect   that   the
husband is liable for the tort committed by his wife.
Respondent on the other hand merely avers that the decision of the
Court   of   Appeals   is   supported   by   substantial   evidence   and   in
accord with law and jurisprudence.9
Verily,  the  question  of  jurisdiction  could be  resolved through a
proper interpretation of Section 16, Rule 39 of the Rules of Court,
which reads:
Sec. 16. Proceedings where property claimed by third person.
If the property levied on is claimed by any person other than the
judgment obligor or his agent, and such person makes an affidavit
of his title thereto or right to the possession thereof, stating the
grounds of such right or title, and serves the same upon the officer
making the levy and a copy thereof upon the judgment obligee, the
officer   shall   not   be   bound   to   keep   the   property,   unless   such
judgment obligee, on demand of the officer, files a bond approved
by the court to indemnify the third­party claimant in a sum not less
than the value of the property levied on. In case of disagreement as
to such value, the same shall be determined by the court issuing the
writ of execution. No claim for damages for the taking or keeping
of the property may be enforced against the bond unless the action
therefor is filed within one hundred twenty (120) days from the
date of the filing of the bond.
The   officer   shall   not   be   liable   for   damages   for   the   taking   or
keeping of the property, to any third­party claimant if such bond is
filed. Nothing herein contained shall prevent such claimant or any
third   person   from   vindicating   his   claim   to   the   property   in   a
separate   action,   or   prevent   the   judgment   obligee   from   claiming
damages   in   the   same   or   a   separate   action   against   a   third­party
claimant who filed a frivolous or plainly spurious claim.
When the writ of execution is issued in favor of the Republic of the
Philippines, or any officer duly representing it, the filing of such
bond shall not be required, and in case the sheriff or levying officer
is sued for damages as a result of the levy, he shall be represented
by   the   Solicitor   General   and   if   held   liable   therefor,   the   actual
damages   adjudged   by   the   court   shall   be   paid   by   the   National
Treasurer   out   of   such   funds   as   may   be   appropriated   for   the
purpose. (Emphasis Supplied)
Apart   from   the   remedy   of   terceria   available   to   a   third­party
claimant or to a stranger to the foreclosure suit against the sheriff
or officer effecting the writ by serving on him an affidavit of his
title and a copy thereof upon the judgment creditor, a third­party
claimant may  also  resort  to an independent  separate  action, the
object of which is the recovery of ownership or possession of the
property seized by the  sheriff, as well as damages arising from
wrongful seizure and detention of the property. If a separate action
is the recourse, the third­party claimant must institute in a forum of
competent   jurisdiction   an   action,   distinct   and   separate   from   the
action in which the  judgment is being enforced, even before or
without   need   of   filing   a   claim   in   the   court   that   issued   the
writ.101awphi1.zw+
A third­party claim must be filed a person other than the judgment
debtor or his agent. In other words, only a stranger to the case may
file a third­party claim.
This leads us to the question: Is the husband, who was not a party
to   the   suit   but   whose   conjugal   property   is   being   executed   on
account of the other spouse being the judgment obligor, considered
a "stranger?"
In determining whether the husband is a stranger to the suit, the
character of the property must be taken into account. In Mariano v.
Court of Appeals,11 which was later adopted in Spouses Ching v.
Court   of   Appeals,12 this   Court   held   that   the   husband   of   the
judgment   debtor   cannot   be   deemed   a   "stranger"   to   the   case
prosecuted and adjudged against his wife for an obligation that has
redounded to the benefit of the conjugal partnership. 13 On the other
hand,   in   Naguit   v.   Court   of   Appeals 14 and   Sy   v.   Discaya,15 the
Court   stated   that   a   spouse   is   deemed   a   stranger   to   the   action
wherein the writ of execution was issued and is therefore justified
in   bringing   an   independent   action   to   vindicate   her   right   of
ownership over his exclusive or paraphernal property.lawphil.net
Pursuant to Mariano however, it must further be settled whether
the obligation of the judgment debtor redounded to the benefit of
the conjugal partnership or not.
21
Petitioners argue that the obligation of the wife arising from her
criminal liability is chargeable to the conjugal partnership. We do
not agree.
There is no dispute that contested property is conjugal in nature.
Article 122 of the Family Code 16 explicitly provides that payment
of personal debts contracted by the husband or the wife before or
during   the   marriage   shall   not   be   charged   to   the   conjugal
partnership except insofar as they redounded to the benefit of the
family.
Unlike   in   the   system   of   absolute   community   where   liabilities
incurred by either spouse by reason of a crime or quasi­delict is
chargeable to the absolute community of property, in the absence
or insufficiency of the exclusive property of the debtor­spouse, the
same   advantage   is   not   accorded   in   the   system   of   conjugal
partnership of gains. The conjugal partnership of gains has no duty
to make advance payments for the liability of the debtor­spouse.
Parenthetically, by no stretch of imagination can it be concluded
that   the   civil   obligation   arising   from   the   crime   of   slander
committed   by   Erlinda   redounded   to   the   benefit   of   the   conjugal
partnership.
To   reiterate,   conjugal   property   cannot   be   held   liable   for   the
personal   obligation   contracted   by   one   spouse,   unless   some
advantage   or   benefit   is   shown   to   have   accrued   to   the   conjugal
partnership.17
In Guadalupe v. Tronco,18 this Court held that the car which was
claimed by the third party complainant to be conjugal property was
being levied upon to enforce "a judgment for support" filed by a
third person, the third­party claim of the wife is proper since the
obligation which is personal to the husband is chargeable not on
the conjugal property but on his separate property.
Hence, the filing of a separate action by respondent is proper and
jurisdiction is thus vested on Branch 21. Petitioners failed to show
that the Court of Appeals committed grave abuse of discretion in
remanding the case to Branch 21 for further proceedings.
WHEREFORE, the petition is DISMISSED. The Decision of the
Court of Appeals is AFFIRMED. Costs against petitioners.
SO ORDERED.
DANTE O. TINGA
Associate Justice
22
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 164201               December 10, 2012
EFREN   PANA, Petitioner,
vs.
HEIRS   OF   JOSE   JUANITE,   SR.   and   JOSE   JUANITE,
JR., Respondents.
D E C I S I O N
ABAD, J.:
This case is about the propriety of levy and execution on conjugal
properties where one of the spouses has been found guilty of a
crime and ordered to pay civil indemnities to the victims' heirs.
The Facts and the Case
The prosecution accused petitioner Efren Pana (Efren), his wife
Melecia, and others of  murder  before  the. Regional  Trial Court
(RTC) of Surigao City in Criminal Cases 4232 and 4233.1
On   July   9,   1997   the   RTC   rendered   a   consolidated
decision2 acquitting   Efren   of   the   charge   for   insufficiency   of
evidence but finding Melecia and another person guilty as charged
and sentenced them to the penalty of death. The RTC ordered those
found guilty to pay each of the heirs of the victims, jointly and
severally, P50,000.00 as civil indemnity, P50,000.00 each as moral
damages, and P150,000.00 actual damages.
On   appeal   to   this   Court,   it   affirmed   on   May   24,   2001   the
conviction of both accused but modified the penalty to reclusion
perpetua.   With   respect   to   the   monetary   awards,   the   Court   also
affirmed   the   award   of   civil   indemnity   and   moral   damages   but
deleted the award for actual damages for lack of evidentiary basis.
In its place, however, the Court made an award of P15,000.00 each
by   way   of   temperate   damages.   In   addition,   the   Court   awarded
P50,000.00 exemplary damages per victim to be paid solidarily by
them.3 The   decision   became   final   and   executory   on   October   1,
2001.4
Upon motion for execution by the heirs of the deceased, on March
12, 2002 the RTC ordered the issuance of the writ, 5 resulting in the
levy   of   real   properties   registered   in   the   names   of   Efren   and
Melecia.6 Subsequently, a notice of levy7 and a notice of sale on
execution8 were issued.
On April 3, 2002, petitioner Efren and his wife Melecia filed a
motion  to quash the   writ  of  execution,  claiming  that  the   levied
properties   were   conjugal   assets,   not   paraphernal   assets   of
Melecia.9 On   September   16,   2002   the   RTC   denied   the
motion.10 The   spouses   moved   for   reconsideration   but   the   RTC
denied the same on March 6, 2003.11
Claiming that the RTC gravely abused its discretion in issuing the
challenged orders, Efren filed a petition for certiorari before the
Court of Appeals (CA). On January 29, 2004 the CA dismissed the
petition   for   failure   to   sufficiently   show   that   the   RTC   gravely
abused its discretion in issuing its assailed orders.12 It also denied
Efren’s   motion   for   reconsideration,13 prompting   him   to   file   the
present petition for review on certiorari.
The Issue Presented
The sole issue presented in this case is whether or not the CA erred
in   holding   that   the   conjugal   properties   of   spouses   Efren   and
Melecia can be levied and executed upon for the satisfaction of
Melecia’s civil liability in the murder case.
Ruling of the Court
To determine whether the obligation of the wife arising from her
criminal   liability   is   chargeable   against   the   properties   of   the
marriage,   the   Court   has   first   to   identify   the   spouses’   property
relations.
Efren claims that his marriage with Melecia falls under the regime
of conjugal partnership of gains, given that they were married prior
to the enactment of the Family Code and that they did not execute
any   prenuptial   agreement.14 Although   the   heirs   of   the   deceased
victims do not dispute that it was the Civil Code, not the Family
Code,   which   governed   the   marriage,   they   insist   that   it   was   the
system of absolute community of property that applied to Efren
and Melecia. The reasoning goes:
Admittedly, the spouses were married before the effectivity of the
Family   Code.   But   that   fact   does   not   prevent   the   application   of
[A]rt.   94,   last   paragraph,   of   the   Family   Code   because   their
property   regime   is   precisely   governed   by   the   law   on   absolute
community.  This  finds  support  in  Art.  256 of   the   Family  Code
which states:
"This code shall have retroactive  effect in so far as it does not
prejudice or impair vested or acquired rights in accordance with
the Civil Code or other laws."
23
None of the spouses is dead. Therefore, no vested rights have been
acquired by each over the properties of the community. Hence, the
liabilities imposed on the accused­spouse may properly be charged
against the community as heretofore discussed.15
The   RTC   applied   the   same   reasoning   as   above. 16 Efren   and
Melecia’s   property   relation   was   admittedly   conjugal   under   the
Civil Code but, since the transitory provision of the Family Code
gave its provisions retroactive effect if no vested or acquired rights
are   impaired,   that   property   relation   between   the   couple   was
changed when the Family Code took effect in 1988. The latter code
now prescribes in Article 75 absolute community of property for
all marriages unless the parties entered into a prenuptial agreement.
As it happens, Efren and Melecia  had no prenuptial agreement.
The CA agreed with this position.17
Both the RTC and the CA are in error on this point. While it is true
that the personal stakes of each spouse in their conjugal assets are
inchoate   or   unclear   prior   to   the   liquidation   of   the   conjugal
partnership of gains and, therefore, none of them can be said to
have   acquired   vested   rights   in   specific   assets,   it   is   evident   that
Article 256 of the Family Code does not intend to reach back and
automatically convert into absolute community of property relation
all   conjugal   partnerships   of   gains   that   existed   before   1988
excepting only those with prenuptial agreements.
The   Family   Code   itself   provides   in   Article   76   that   marriage
settlements cannot be modified except prior to marriage.
Art. 76. In order that any modification in the marriage settlements
may   be   valid,   it   must   be   made   before   the   celebration   of   the
marriage, subject to the provisions of Articles 66, 67, 128, 135 and
136.
Clearly, therefore, the conjugal partnership of gains that governed
the marriage between Efren and Melecia who were married prior to
1988   cannot   be   modified   except   before   the   celebration   of   that
marriage.
Post­marriage modification of such settlements can take place only
where:  (a)   the   absolute  community   or  conjugal  partnership   was
dissolved and liquidated upon a decree of legal separation; 18 (b) the
spouses   who   were   legally   separated   reconciled   and   agreed   to
revive   their   former   property   regime;19 (c)   judicial   separation   of
property had been had on the ground that a spouse abandons the
other without just cause or fails to comply with his obligations to
the   family;20 (d)   there   was   judicial   separation   of   property   under
Article 135; (e) the spouses jointly filed a petition for the voluntary
dissolution of their absolute community or conjugal partnership of
gains.21 None of these circumstances exists in the case of Efren and
Melecia.
What is more, under the conjugal partnership of gains established
by Article 142 of the Civil Code, the husband and the wife place
only the fruits of their separate property and incomes from their
work or industry in the common fund. Thus:
Art.   142.   By   means   of   the   conjugal   partnership   of   gains   the
husband   and   wife   place   in   a   common   fund   the   fruits   of   their
separate property and the income from their work or industry, and
divide   equally,   upon   the   dissolution   of   the   marriage   or   of   the
partnership, the net gains or benefits obtained indiscriminately by
either spouse during the marriage.
This means that they continue under such property regime to enjoy
rights of ownership over their separate properties. Consequently, to
automatically change the marriage settlements of couples who got
married under the Civil Code into absolute community of property
in 1988 when the Family Code took effect would be to impair their
acquired or vested rights to such separate properties.
The RTC cannot take advantage of the spouses’ loose admission
that   absolute   community   of   property   governed   their   property
relation since the record shows that they had been insistent that
their property regime is one of conjugal partnership of gains.22 No
evidence   of   a   prenuptial   agreement   between   them   has   been
presented.
What is clear is that Efren and Melecia were married when the
Civil   Code   was   still   the   operative   law   on   marriages.   The
presumption, absent any evidence to the contrary, is that they were
married   under   the   regime   of   the   conjugal   partnership   of   gains.
Article 119 of the Civil Code thus provides:
Art. 119. The future spouses may in the marriage settlements agree
upon absolute or relative community of property, or upon complete
separation of property, or upon any other regime. In the absence of
marriage settlements, or when the same are void, the system of
relative community or conjugal partnership of gains as established
in this Code, shall govern the property relations between husband
and wife.
Of   course,   the   Family   Code   contains   terms   governing   conjugal
partnership   of   gains   that   supersede   the   terms   of   the   conjugal
partnership   of   gains   under   the   Civil   Code.   Article   105   of   the
Family Code states:
"x x x x
The   provisions   of   this   Chapter   [on  the   Conjugal  Partnership   of
Gains] shall also apply to conjugal partnerships of gains already
established between spouses before  the  effectivity  of  this Code,
without prejudice to vested rights already acquired in accordance
with the Civil Code or other laws, as provided in Article 256."23
Consequently, the Court must refer to the Family Code provisions
in deciding whether or not the conjugal properties of Efren and
Melecia may be held to answer for the civil liabilities imposed on
Melecia in the murder case. Its Article 122 provides:
Art. 122. The payment of personal debts contracted by the husband
or the wife before or during the marriage shall not be charged to
the   conjugal   properties   partnership   except   insofar   as   they
redounded to the benefit of the family.
Neither  shall the  fines and pecuniary indemnities imposed upon
them be charged to the partnership.
However,   the   payment   of   personal   debts   contracted   by   either
spouse before the marriage, that of fines and indemnities imposed
upon them, as well as the support of illegitimate children of either
spouse, may be enforced against the partnership assets after the
responsibilities   enumerated   in   the   preceding   Article   have   been
covered,   if   the   spouse   who   is   bound   should   have   no   exclusive
property   or   if   it   should   be   insufficient;   but   at   the   time   of   the
liquidation  of   the   partnership, such spouse   shall  be  charged  for
what has been paid for the purpose above­mentioned.
Since Efren does not dispute the RTC’s finding that Melecia has
no exclusive property of her  own,24 the above  applies. The  civil
indemnity that the decision in the murder case imposed on her may
be enforced against their conjugal assets after the responsibilities
enumerated   in   Article   121   of   the   Family   Code   have   been
covered.25 Those responsibilities are as follows:
Art. 121. The conjugal partnership shall be liable for:
(1) The support of the spouse, their common children,
and the legitimate children of either spouse; however,
the support of illegitimate children shall be governed by
the provisions of this Code on Support;
(2)   All   debts   and   obligations   contracted   during   the
marriage by the designated administrator­spouse for the
benefit of the conjugal partnership of gains, or by both
spouses or by one of them with the consent of the other;
(3) Debts and obligations contracted by either spouse
without the consent of the other to the extent that the
family may have benefited;
24
(4)   All  taxes,  liens,  charges,   and  expenses,  including
major or minor repairs upon the  conjugal partnership
property;
(5) All taxes and expenses for mere preservation made
during the marriage upon the separate property of either
spouse;
(6) Expenses to enable either spouse to commence or
complete a professional, vocational, or other activity for
self­improvement;
(7) Antenuptial debts of either spouse insofar as they
have redounded to the benefit of the family;
(8) The value of what is donated or promised by both
spouses in favor  of their  common legitimate  children
for the exclusive purpose of commencing or completing
a professional or vocational course or other activity for
self­improvement; and
(9) Expenses of litigation between the spouses unless
the suit is found to be groundless.
If the conjugal partnership is insufficient to cover the foregoing
liabilities,   the   spouses   shall   be   solidarily   liable   for   the   unpaid
balance with their separate properties.1âwphi1
Contrary to Efren’s contention, Article 121 above allows payment
of the criminal indemnities imposed on his wife, Melecia, out of
the partnership assets even before these are liquidated. Indeed, it
states   that   such   indemnities   "may   be   enforced   against   the
partnership   assets   after   the   responsibilities   enumerated   in   the
preceding article have been covered."[26] No prior liquidation of
those assets is required. This is not altogether unfair since Article
122 states that "at the time of liquidation of the partnership, such
[offending] spouse shall be charged for what has been paid for the
purposes above­mentioned."
WHEREFORE,   the
Court AFFIRMS with MODIFICATION the   Resolutions   of   the
Court of Appeals in CA­G.R. SP 77198 dated January 29, 2004
and   May   14,   2004.   The   Regional   Trial   Court   of   Surigao   City,
Branch   30,   shall   first   ascertain   that,   in   enforcing   the   writ   of
execution on the conjugal properties of spouses Efren and Melecia
Pana   for   the   satisfaction   of   the   indemnities   imposed   by   final
judgment on the latter accused in Criminal Cases 4232 and 4233,
the responsibilities enumerated in Article 121 of the Family Code
have been covered.
SO ORDERED.
ROBERTO A. ABAD
Associate Justice

25
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. L­61464 May 28, 1988
BA FINANCE CORPORATION, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, AUGUSTO 
YULO, LILY YULO (doing business under the name and style
of A & L INDUSTRIES), respondents.
GUTIERREZ, JR., J.:
This is a petition for review seeking to set aside the decision of the
Court of Appeals which affirmed the decision of the then Court of
First Instance of Manila, dismissing the complaint instituted by the
petitioner and ordering it to pay damages on the basis of the private
respondent's counterclaim.
On July 1, 1975, private respondent Augusto Yulo secured a loan
from the petitioner in the amount of P591,003.59 as evidenced by a
promissory note he signed in his own behalf and as representative
of the A & L Industries. Respondent Yulo presented an alleged
special power of attorney executed by his wife, respondent Lily
Yulo, who manages A & L Industries and under whose name the
said business is registered, purportedly authorizing Augusto Yulo
to   procure   the   loan   and   sign   the   promissory   note.   About   two
months prior to the loan, however, Augusto Yulo had already left
Lily   Yulo   and   their   children   and   had   abandoned   their   conjugal
home. When the obligation became due and demandable, Augusto
Yulo failed to pay the same.
On  October   7, 1975,  the   petitioner  filed its  amended  complaint
against  the   spouses  Augusto and Lily  Yulo  on the   basis  of  the
promissory   note.   It   also   prayed   for   the   issuance   of   a   writ   of
attatchment alleging that the said spouses were guilty of fraud in
contracting the debt upon which the action was brought and that
the fraud consisted of the spouses' inducing the petitioner to enter
into a contract with them by executing a Deed of Assignment in
favor of the petitioner, assigning all their rights, titles and interests
over a construction contract executed by and between the spouses
and A. Soriano Corporation on June 19, 1974 for a consideration
of   P615,732.50   when,   in   truth,   the   spouses   did   not   have   any
intention of remitting the proceeds of the said construction contract
to   the   petitioner   because   despite   the   provisions   in   the   Deed   of
Assignment that the spouses shall, without compensation or costs,
collect and receive in trust for the petitioner all payments made
upon the construction contract and shall remit to the petitioner all
collections therefrom, the said spouses failed and refuse to remit
the collections and instead, misappropriated the proceeds for their
own   use   and   benefit,   without   the   knowledge   or   consent   of   the
petitioner.
The trial court issued the writ of attachment prayed for thereby
enabling the petitioner to attach the properties of A & L Industries.
Apparently   not   contented   with   the   order,   the   petitioner   filed
another motion for the examination of attachment debtor, alleging
that the properties attached by the sheriff were not sufficient to
secure the satisfaction of any judgment that may be recovered by it
in the case. This was likewise granted by the court.
Private respondent Lily Yulo filed her answer with counterclaim,
alleging that although Augusta Yulo and she are husband and wife,
the former had abandoned her and their children five (5) months
before the filing of the complaint; that they were already separated
when the promissory note was executed; that her signature in the
special   power   of   attorney   was   forged   because   she   had   never
authorized Augusto Yulo in any capacity to transact any business
for and in behalf of A & L Industries, which is owned by her as a
single   proprietor,   that   she   never   got   a   single   centavo   from   the
proceeds of the loan mentioned in the promissory note; and that as
a   result   of   the   illegal   attachment   of   her   properties,   which
constituted the assets of the A & L Industries, the latter closed its
business and was taken over by the new owner.
After   hearing,   the   trial   court   rendered   judgment   dismissing   the
petitioner's complaint against the private respondent Lily Yulo and
A & L Industries and ordering the petitioner to pay the respondent
Lily   Yulo   P660,000.00   as   actual   damages;   P500,000.00   as
unrealized profits; P300,000.00 as exemplary damages; P30,000.00
as and for attorney's fees; and to pay the costs.
The petitioner appealed. The Court of Appeals affirmed the trial
court's   decision   except   for   the   exemplary   damages   which   it
reduced from P300,000.00 to P150,000.00 and the attorney's fees
which were reduced from P30,000.00 to P20,000.00.
In resolving the question of whether or not the trial court erred in
holding that the signature of respondent Lily Yulo in the special
power of attorney was forged, the Court of Appeals said:
The  crucial issue   to  be   determined  is  whether   or  not  the
signatures of the appellee Lily Yulo in Exhibits B and B­1
are   forged.   Atty.   Crispin   Ordoña,   the   Notary   Public,
admitted   in   open   court   that   the   parties   in   the   subject
26
documents did not sign their signatures in his presence. The
same were already signed by the supposed parties and their
supposed witnesses at the time they were brought to him for
ratification.   We   quote   from   the   records   the   pertinent
testimony of Atty. Ordoña, thus:
Q.   This   document  marked   as   Exhibit   B­1,  when
this was presented to you by that common friend,
June Enriquez, it was already typewritten, it was
already accomplished, all typewritten.?
A. Yes, sir.
Q   And   the   parties   had   already   affixed   their
signatures in this document?
A. Yes, sir.
Q. In this document marked as Exhibit B although
it appears here that this is an acknowledgment, you
have   not   stated   here   that   the   principal   actually
acknowledged this  document to  be  her  voluntary
act and deed?
A   This   in   one   of   those   things   that   escaped   my
attention. Actually I have not gone over the second
page. I believed it was in order I signed it. (TSN
pp. 13­14, Hearing of Nov. 26, 1976).
The glaring admission by the Notary Public that he failed to
state in the acknowledgment portion of Exhibit B­1 that the
appellee Lily Yulo acknowledged the said document to be
her   own   voluntary   act   and   deed,   is   a   very   strong   and
commanding circumstance to show that she did not appear
personally before the said Notary Public and did not sign the
document.
Additionally, the  Notary Public admitted that, while June
Enriquez   is   admittedly   a   mutual   friend   of   his   and   the
defendant Augusta Yulo, and who is also an instrumental
witness in said Exhibit B­1., he could not recognize or tell
which   of   the   two   signatures   appearing   therein,   was   the
signature of this June Enriquez.
Furthermore, as the issue is one of credibility of a witness,
the findings and conclusions of the trial court before whom
said witness, Atty. Crispin Ordoña, the Notary Public before
whom the questioned document was supposedly ratified and
acknowledged,   deserve   great   respect   and   are   seldom
disturbed on appeal by appellate tribunals, since it is in the
best and peculiar advantage of determining and observing
the   conduct,   demeanor   and   deportment   of   a   particular
witness while he is testifying in court, an opportunity not
enjoyed by the appellate courts who merely have to rely on
the   recorded   proceedings   which   transpired   in   the   court
below,   and   the   records   are   bare   of   any   circumstance   of
weight, which the trial court had overlooked and which if
duly   considered,  may  radically   affect  the   outcome  of   the
case.
On the other hand, the appellee Lily Yulo, to back up her
claim of forgery of her signature in Exhibit B­1, presented
in court a handwriting expert witness in the person of Police
Captain   Yakal   Giron   of   the   Integrated   National   Police
Training Command, and who is also a Document Examiner
of   the   same   Command's   Crime   Laboratory   at   Fort
Bonifacio, Metro Manila. His experience as an examiner of
questioned and disputed documents, in our mind, is quite
impressive.   To   qualify   him   as   a   handwriting   expert,   he
declared that he underwent extensive and actual studies and
examination of disputed or questioned document, both at the
National   Bureau   of   Investigation   Academy   and   National
Bureau of Investigation Questioned Document Laboratory,
respectively,   from   July   1964,   up   to   his   appointment   as
Document   Examiner   in   June,   1975,   and,   to   further   his
experience   along  this   line,  he   attended   the   297th   Annual
Conference   of   the   American   Society   of   Questioned
Docurnent   Examiners   held   at   Seattle,   Washington,   in
August   1971,   as   a   representative   of   the   Philippines,   and
likewise   conducted   an   observation   of   the   present   and
modern   trends   of   crime   laboratories   in   the   West   Coast,
U.S.A., in 1971; that he likewise had conducted actual tests
and examination of about 100,000 documents, as requested
by   the   different   courts,   administrative,   and   governmental
agencies of the Government, substantial portions of which
relate to actual court cases.
In concluding that the signatures of the appellee Lily Yulo,
in the disputed document in question (Exh. B­1), were all
forgeries, and not her genuine signature, the expert witness
categorically  recited  and  specified  in   open  court   what  he
observed   to   be   about   twelve   (12)   glaring   and   material
significant differences, in his comparison of the signatures
appearing   in  the   genuine   specimen  signatures  of  the   said
appellee   and   with   those   appearing   in   the   questioned
document (Exhibit B­1). Indeed, we have likewise seen the
supposed   notable   differences,   found   in   the   standard   or
genuine   signatures   of   the   appellee   which  were   lifted   and
obtained in the official files of the government, such as the
Bureau of Internal Revenue on her income tax returns, as
compared   to   the   pretended   signature   of   the   appellee
appearing   in   Exhibits   B,   B­1.   It   is   also   noteworthy   to
mention that the appellant did not even bother to conduct a
cross­examination of the handwriting expert witness, Capt.
Giron, neither did the appellant present another handwriting
expert,   at   least   to   counter­act   or   balance   the   appellee's
handwriting expert.
Prescinding from the foregoing facts, we subscribe fully to
the   lower   court's   observations   that   the   signatures   of   the
appellee Lily Yulo in the questioned document (Exh. B­1)
were forged. Hence, we find no factual basis to disagree.
(pp. 28­30, Rollo)
As to the petitioner's contention that even if the signature of Lily
Yulo   was   forged   or   even   if   the   attached   properties   were   her
exclusive   property,   the   same   can   be   made   answerable   to   the
obligation because the said properties form part of  the conjugal
partnership of the spouses Yulo, the appellate court held that these
contentions are without merit because there is strong preponderant
evidence  to  show  that  A  &  L  Industries  belongs exclusively  to
respondent Lily Yulo, namely: a) The Certificate of Registration of
A & L Industries, issued by the Bureau of Commerce, showing
that said business is a single proprietorship, and that the registered
owner thereof is only Lily Yulo; b) The Mayor's Permit issued in
favor of A & L Industries, by the Caloocan City Mayor's Office
showing compliance by said single proprietorship company with
the City Ordinance governing business establishments; and c) The
Special Power of Attorney itself, assuming but without admitting
its   due   execution,   is   tangible   proof   that   Augusto   Yulo   has   no
interest whatsoever in the A & L Industries, otherwise, there would
have been no necessity for the Special Power of Attorney if he is a
part owner of said single proprietorship.
With   regard   to   the   award   of   damages,   the   Court   of   Appeals
affirmed the findings of the trial court that there was bad faith on
the   part of   the   petitioner  as to  entitle  the   private  respondent  to
damages as shown not only by the fact that the petitioner did not
present the Deed of Assignment or the construction agreement or
any evidence whatsoever to support its claim of fraud on the part
of   the   private   respondent   and   to   justify   the   issuance   of   a
preliminary attachment, but also by the following findings:
Continuing and elaborating further on the appellant's mala
fide actuations in securing the writ of attachment, the lower
court stated as follows:
27
Plaintiff   not   satisfied   with   the   instant   case   where   an
order   for   attachment   has   already   been   issued   and
enforced, on the strength of the same Promissory Note
(Exhibit"A"),   utilizing   the   Deed   of   Chattel  Mortgage
(Exhibit "4"), filed a foreclosure proceedings before the
Office   of   the   Sheriff   of   Caloocan   (Exhibit"6")
foreclosing  the   remaining  properties  found  inside  the
premises formerly occupied by the A & L Industries. A
minute examination of Exhibit "4" will show that the
contracting   parties   thereto,   as   appearing   in   par.   1
thereof,   are   Augusto   Yulo,   doing   business   under   the
style   of   A   &   L   Industries   (should   be   A   &   L   Glass
Industries Corporation), as mortgagor and BA Finance
Corporation as mortgagee, thus the enforcement of the
Chattel   Mortgage   against   the   property   of   A   &   L
Industries exclusively owned by Lily T. Yulo appears
to be without any factual or legal basis whatsoever. The
chattel mortgage, Exhibit "4" and the Promissory Note,
Exhibit A, are based on one and the same obligation.
Plaintiff tried to enforce as it did enforce its claim into
two different modes a single obligation.
Aware   that   defendant   Lily   Yulo,   filed   a   Motion   to
Suspend Proceedings by virtue of a complaint she filed
with the Court of First Instance of Caloocan, seeking
annulment of the Promissory Note, the very basis of the
plaintiff in filing this complaint, immediately after the
day it filed a Motion for the Issuance of an Alias Writ
of   Preliminary   Attachment   .   .   .Yet,   inspite   of   the
knowledge   and   the   filing   of   this   Motion   to   Suspend
Proceedings,   the   Plaintiff   still   filed   a   Motion   for   the
Issuance   of   a   Writ   of   Attachment   dated   February   6,
1976 before this court. To add insult to injury, plaintiff
even filed a Motion for Examination of the Attachment
Debtor,   although   aware   that   Lily   Yulo   had   already
denied participation  in  the   execution  of   Exhibits  "A"
and "B". These incidents and actions taken by plaintiff,
to the thinking of the court, are sufficient to prove and
establish the element of bad faith and malice on the part
of plaintiff which may warrant the award of damages in
favor   of   defendant   Lily   Yulo.   (Ibid.,   pp.   102­
103).<äre||anº•1àw>
Indeed,   the   existence   of   evident   bad   faith   on   the
appellant's part in proceeding against the appellee Lily
Yulo in the present case, may likewise be distressed on
the fact that its officer Mr. Abraham Co, did not even
bother   to   demand   the   production   of   at   least   the
 duplicate   original   of   the   Special   Power   of   Attorney
(Exhibit B) and merely contended himself with a mere
xerox   copy   thereof,   neither   did   he   require   a   more
specific authority from the A & L Industries to contract
the loan in question, since from the very content and
recitals of the disputed document, no authority, express
or   implied,   has   been   delegated   or   granted   to   August
Yulo to contract a loan, especially with the appellant.
(pp. 33­34, Rollo)
Concerning the actual damages, the appellate court ruled that the
petitioner should have presented evidence to disprove or rebut the
private respondent's claim but it remained quiet and chose not to
disturb the testimony and the  evidence presented by the private
respondent to prove her claim.
In this petition for certiorari, the petitioner raises three issues. The
first issue deals with the appellate court's affirmance of the trial
court's findings that the signature of the private respondent on the
Special Power of Attorney was forged. According to the petitioner,
the Court of Appeals disregarded the direct mandate of Section 23,
Rule 132 of the Rules of Court which states in part that evidence of
handwriting by comparison may be made "with writings admitted
or treated as genuine by the party against whom the evidence is
offered, or proved to be genuine to the satisfaction of the judge,"
and that there is no evidence on record which proves or tends to
prove the genuineness of the standards used.
There is no merit in this contention.
The   records   show   that   the   signatures   which   were   used   as
"standards"   for   comparison   with   the   alleged   signature   of   the
private respondent in the Special Power of Attorney were those
from the latter's residence certificates in the years 1973, 1974 and
1975, her income tax returns for the years 1973 and 1975 and from
a document on long bond paper  dated May 18, 1977. Not only
were the signatures in the foregoing documents admitted by the
private respondent as hers but most of the said documents were
used   by   the   private   respondent   in   her   transactions   with   the
government. As was held in the case of Plymouth Saving & Loan
Assn. No. 2 v. Kassing (125 NE 488, 494):
We believe the true rule deduced from the authorities to
be that the genuineness of a "standard" writing may be
established (1) by the admission of the person sought to
be charged with the disputed writing made at or for the
purposes   of   the   trial   or   by   his   testimony;   (2)   by
witnesses who saw the standards written or to whom or
in   whose   hearing   the   person   sought   to   be   charged
acknowledged   the   writing   thereof;   (3)   by   evidence
showing   that   the   reputed   writer   of   the   standard   has
acquiesced   in   or   recognized   the   same,   or   that   it   has
been   adopted   and   acted   upon   by   him   his   business
transactions or other concerns....
Furthermore, the judge found such signatures to be sufficient as
standards.   In   the   case   of Taylor­Wharton   Iron   &   Steel   Co.   v.
Earnshaw (156 N.E. 855, 856), it was held:
When a writing is offered as a standard of comparison it
is for  the presiding judge  to decide  whether  it is the
handwriting   of   the   party   to   be   charged.   Unless   his
finding is founded upon error of law, or upon evidence
which is,  as matter  of  law, insufficient  to  justify  the
finding, this court will not revise it upon exceptions."
(Costelo v. Crowell, 139 Mass. 588, 590, 2 N.E. 648;
Nuñez v. Perry, 113 Mass, 274, 276.)
We cannot find any error on the part of the trial judge in using the
above documents as standards and also in giving credence to the
expert   witness   presented   by   the   private   respondent   whose
testimony   the   petitioner   failed  to   rebut   and  whose   credibility   it
likewise failed to impeach. But more important is the fact that the
unrebutted   handwriting   expert's   testimony   noted   twelve   (12)
glaring   and   material   differences   in   the   alleged   signature   of   the
private respondent in the Special Power of Attorney as compared
with the specimen signatures, something which the appellate court
also   took   into   account.   In Cesar   v.   Sandiganbayan (134   SCRA
105, 132), we ruled:
Mr. Maniwang pointed to other significant divergences
and   distinctive   characteristics   between   the   sample
signatures and the signatures on the questioned checks
in  his  report which the   court's  Presiding  Justice  kept
mentioning during Maniwang's testimony.
In   the   course   of   his   cross­examination,   NBI   expert
Tabayoyong   admitted   that   he   saw   the   differences
between   the   exemplars   used   and   the   questioned
signatures but he dismissed the differences because he
did   not   consider   them   fundamental.   We   rule   that
significant differences are more fundamental than a few
similarities.   A   forger   always   strives   to   master   some
similarities.
The second issue raised by the petitioner is that while it is true that
A   &   L   Industries   is   a   single   proprietorship   and   the   registered
owner   thereof   is   private   respondent   Lily   Yulo,   the   said
proprietorship was established during the marriage and its assets
28
were also acquired during the same. Therefore, it is presumed that
this property forms part of the conjugal partnership of the spouses
Augusto   and   Lily   Yulo   and   thus,   could   be   held   liable   for   the
obligations contracted by Augusto Yulo, as administrator  of  the
partnership.
There is no dispute that A & L Industries was established during
the marriage of Augusta and Lily Yulo and therefore the same is
presumed conjugal and the fact that it was registered in the name
of only one of the spouses does not destroy its conjugal nature (See
Mendoza v. Reyes, 124 SCRA 161, 165). However, for the said
property to be held liable, the obligation contracted by the husband
must   have   redounded  to  the   benefit   of  the  conjugal   partnership
under   Article   161   of   the   Civil   Code.   In   the   present   case,   the
obligation which the petitioner is seeking to enforce against the
conjugal property managed by the  private respondent Lily Yulo
was undoubtedly contracted by Augusto Yulo for his own benefit
because   at   the   time   he   incurred   the   obligation   he   had   already
abandoned his family and had left their conjugal home. Worse, he
made it appear that he was duly authorized by his wife in behalf of
A & L Industries, to procure such loan from the petitioner. Clearly,
to make A & L Industries liable now for the said loan would be
unjust and contrary to the express provision of the Civil Code. As
we have ruled in Luzon Surety Co., Inc. v. De Gracia (30 SCRA
111, 115­117):
As explained in the decision now under review: "It is
true   that   the   husband   is   the   administrator   of   the
conjugal property pursuant to the provisions of Art. 163
of the new Civil Code. However, as such administrator
the only obligations incurred by the husband that are
chargeable   against   the   conjugal   property   are   those
incurred   in   the   legitimate   pursuit   of   his   career,
profession or business with the honest belief that he is
doing right for the benefit of the family. This is not true
in the case at bar for we believe that the husband in
acting   as   guarantor   or   surety   for   another   in   an
indemnity agreement as that involved in this case did
not act for the benefit of the conjugal partnership. Such
inference is more emphatic in this case, when no proof
is presented that Vicente Garcia in acting as surety or
guarantor received consideration therefore, which may
redound to the benefit of the conjugal partnership.(Ibid,
pp. 46­47).
xxx xxx xxx
In the most categorical language, a conjugal partnership
under that provision is liable only for such "debts and
 obligations contracted by the husband for the benefit of
the conjugal partnership." There must be the requisite
showing then of some advantage which clearly accrued
to the welfare of the spouses. There is none in this case.
xxx xxx xxx
Moreover,   it   would   negate   the   plain   object   of   the
additional requirement in the present Civil Code that a
debt   contracted   by   the   husband   to   bind   a   conjugal
partnership   must   redound   to   its   benefit.   That   is   still
another provision indicative of the solicitude and tender
regard that the law manifests for the family as a unit. Its
interest   is   paramount;   its   welfare   uppermost   in   the
minds of the codifiers and legislators.
We, therefore, rule that the petitioner cannot enforce the obligation
contracted by Augusto Yulo against his conjugal properties with
respondent Lily Yulo. Thus, it follows that the writ of attachment
cannot issue against the said properties.
Finally,   the   third   issue   assails   the   award   of   actual   damages
according to the petitioner, both the lower court and the appellate
court overlooked the fact that the properties referred to are still
subject   to   a   levy   on   attachment.   They   are,   therefore,   still
under custodia   legis and   thus,   the   assailed   decision   should   have
included   a   declaration   as   to   who   is   entitled   to   the   attached
properties   and   that   assuming   arguendo   that   the   attachment   was
erroneous, the lower court should have ordered the sheriff to return
to   the   private   respondent   the   attached   properties   instead   of
condemning   the   petitioner   to   pay   the   value   thereof   by   way   of
actual damages.
In the case of Lazatin v. Twaño (2 SCRA 842, 847), we ruled:
xxx xxx xxx
... It should be observed that Sec. 4 of Rule 59, does not
prescribed   the   remedies   available   to   the   attachment
defendant in case of a wrongful attachment, but merely
provides an action for recovery upon the bond, based on
the undertaking therein made and not upon the liability
arising from a tortuous act, like the malicious suing out
of an attachment. Under the first, where malice is not
essential,   the   attachment   defendant,   is   entitled   to
recover only the actual damages sustained by him by
reason of the attachment. Under the second, where the
attachment   is   maliciously   sued   out,   the   damages
recoverable   may   include   a   compensation   for   every
injury to his credit, business or feed (Tyler v. Mahoney,
168 NC 237, 84 SE  362; Pittsburg etc. 5 Wakefield, We   cannot,   however,   sustain   the   award   of   P500,000.00
etc., 135 NC 73, 47 SE 234). ... representing unrealized profits because this amount was not proved
or justified before the trial court. The basis of the alleged unearned
The question before us, therefore, is whether the attachment of the
profits is too speculative and conjectural to show actual damages
properties of A & L Industries was wrongful so as to entitle the
for a future period. The private respondent failed to present reports
petitioner to actual damages only or whether the said attachment
on   the   average   actual   profits   earned   by   her   business   and   other
was made in bad faith and with malice to warrant the award of
evidence of profitability which are necessary to prove her claim for
other   kinds   of   damages.   Moreover,   if   the   private   respondent   is
the said amount (See G. A. Machineries, Inc. v. Yaptinchay, 126
entitled only to actual damages, was the court justified in ordering
SCRA 78, 88).
the petitioner to pay for the value of the attached properties instead
of   ordering   the   return   of   the   said   properties   to   the   private The judgment is therefore set aside insofar as it holds the petitioner
respondent Yulo ? liable   for   P500,000.00   actual   damages   representing   unrealized
profits, P150,000.00 for exemplary damages and P20,000.00 for
Both the trial and appellate courts found that there was bad faith on
attorney's fees. As stated earlier, the attached properties, should be
the part of the petitioner in securing the writ of attachment. We do
released in favor of the petitioner.
not think so. "An attachment may be said to be wrongful when, for
instance, the plaintiff has no cause of action, or that there is no true WHEREFORE,   the   decision   of   the   Court   of   Appeals   is   hereby
ground therefore, or that the plaintiff has a sufficient security other SET   ASIDE   and   the   petitioner   is   ordered   to   pay   the   private
than the property attached, which is tantamout to saying that the respondent   Lily   Yulo   the   amount   of   SIX   HUNDRED   SIXTY
plaintiff is not entitled to attachment because the requirements of THOUSAND   PESOS   (P660,000.00)   as   actual   damages.   The
entitling   him   to   the   writ   are   wanting.   (7   C.J.S.,   664)"   (p.   48, remaining properties subject of the attachment are ordered released
Section 4, Rule 57, Francisco, Revised Rules of Court). in favor of the petitioner.
Although the petitioner failed to prove the ground relied upon for SO ORDERED.
the   issuance   of   the   writ   of   attachment,   this   failure   cannot   be
Fernan (Chairman), Feliciano, Bidin and Cortes JJ., concur.
equated with bad faith or malicious intent. The steps which were
taken by  the   petitioner   to  ensure   the  security  of  its  claim  were
premised, on the firm belief that the properties involved could be
made   answerable   for   the   unpaid   obligation   due   it.   There   is   no
question that a loan in the amount of P591,003.59 was borrowed
from the bank.
We, thus, find that the petitioner is liable only for actual damages
and not for  exemplary damages and attorney's fees. Respondent
Lily   Yulo   has   manifested   before   this   Court   that   she   no   longer
desires   the   return   of   the   attached   properties   since   the   said
attachment caused her to close down the business. From that time
she   has   become   a   mere   employee   of   the   new   owner   of   the
premises. She has grave doubts as to the running condition of the
attached   machineries   and   equipments   considering   that   the
attachment was effected way back in 1975. She states as a matter
of   fact   that   the   petitioner   has   already   caused   the   sale   of   the
machineries for fear that they might be destroyed due to prolonged
litigation. We, therefore, deem it just and equitable to allow private
respondent Lily Yulo to recover actual damages based on the value
of the attached properties as proven in the trial court, in the amount
of   P660,000.00.   In   turn,   if   there   are   any   remaining   attached
properties,   they   should   be   permanently   released   to   herein
petitioner.
29
30
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 118784 September 2, 1999
HEIRS OF CHRISTINA AYUSTE, petitioner,
vs.
COURT OF APPEALS and VIENA  annulment of the sale is barred by laches because of her failure to
MALABONGA, respondents.
D E C I S I O N
GONZAGA­REYES, J.:
Before   us  is  a   petition  for certiorari under  Rule   45,  asking  this
Court to review the decision of the Court of Appeals dated January
23,   1995   in   CA­G.R.   CV   No.   38232,   which   overturned   the
decision of the Regional Trial Court of Lucena City in Civil Case
No. 90­33.  died in 1989. It is thus clear that the action for annulment of the
At the outset, we note that Christina Ayuste, the plaintiff in the
lower court and the original petitioner herein, died on November
21, 1995. 2 In his Comment dated January 14, 1998 to private
respondent’s   Manifestation   informing   the   Court   of   Christina
Ayuste’s death, petitioner’s counsel re­affirmed such fact of death
and informed the Court of the names of Christina Ayuste’s legal
representatives. 3 The claim not having been extinguished by the
death of Christina Ayuste, we ordered the substitution of her heirs
Marlon Ayuste and Arlaine Ayuste­Yu for Christina Ayuste in our
Resolution dated August 11, 1999.
Christina Ayuste married Rafael Ayuste on September 24, 1961.
Although the couple resided in Manila, they operated a machine
shop   in   Barangay   Iyam,   Lucena   City,   which   was   managed   by
Rafael Ayuste. In order to serve as temporary residence for Rafael
Ayuste while in Lucena, the couple purchased on August 26, 1982
a parcel of land with an area of 180 square meters on which a
residential   house   was   built   situated   at   Yale   Street,   University
Village, Barrio Ibabang Dupay, Lucena City from spouses Pedro
and Aida David. A deed of sale 4 was executed and signed by the
parties and filed with the Register of Deeds of Lucena City. On
October 23, 1983, the Register  of Deeds of  Lucena City issued
Transfer   Certificate   of   Title   No.   T­42972   in   the   name   of
"RAFAEL T. AYUSTE, married to Christina Ayuste."  (4)   Ordering   plaintiff   Christina   Ayuste   to   pay   the   defendant
On February 27, 1987, a deed of absolute sale 6 was executed by
Rafael Ayuste in favor of private respondent whereby the former
sold the abovementioned parcel of land to the latter for P40,000,
which amount Rafael Ayuste acknowledge having received in the
deed. On page 2 of this deed appears the signature of Christina
Ayuste below the phrase "With my conformity." The deed of sale
was registered with the Register of deeds of Lucena City on March
5, 1987 and Transfer Certificate of Title No. T­50046 was issued
in the name of private Respondent.  Both  parties appealed the  trial court’s decision.  On January 23,
After Rafael Ayuste’s death on October 13, 1989, Christina Ayuste
discovered, in the course of an inventory of their properties, that
the title to the land in Lucena was missing. She searched for it in
the office of her husband in Lucena City and it was then that she
learned from her employees about the sale of the house and lot by
her husband to private Respondent.
On March 2, 1990, Christina  Ayuste filed a complaint with the
Regional Trial Court of Lucena City for the annulment of the sale,
cancellation of the title issued in the name of private respondent
and for the payment of moral, exemplary and actual damages. In
her complaint Christina Ayuste alleges that her signature on the
deed of sale was forged and that her husband Rafael Ayuste sold
the property without her knowledge and consent.
The Regional Trial Court rendered its Decision on June 20, 1991,
the dispositive portion of which provides as follows ­­
WHEREFORE, judgment is hereby rendered as follows: 
(1) Declaring null and void the Deed of Absolute Sale of House
and   Lot   (Exhibit   "C")   executed   by   defendant   and   plaintiff’s
husband,   the   deceased   Rafael   Ayuste,   on   February   27,   1987;
(2)   Ordering   defendant   Viena   Malabonga   to   return   to   plaintiff
Christina Ayuste the possession of the house and lot covered by
Transfer   Certificate   of   Title   No.   T­50045,   now   in   the   name   of
defendant   Viena   Malabonga,   together   with   the   improvements
thereon;
(3)   Directing   the   Register   of   Deeds   of   Lucena   City   to   cancel
Transfer Certificate of Title No. T­50046 and to issue in the name
of plaintiff and her children by the late Rafael Ayuste new Transfer
Certificate   of   Title   in   lieu   thereof,   subject   to   all/any   liens   and
encumbrances   annotated   on   the   memorandum   of   the   title   to   be
cancelled;
Vienna Malabonga the sum of P258,200.00 for the improvements
introduced on the lot and house as well as for maintenance of the
premises; and
31
(5)   Ordering   defendant   to   pay   plaintiff   the   amount   of   rents
received from the premises starting March, 1990 until such time
that she finally turns­over (sic) the possession of the house and lot
to plaintiff, at the rate of P2,700.00 per month.
With costs against defendant. 8
1995,   the   Court   of   Appeals   reversed   the   trial   court’s   ruling   by
holding   that  Christina  Ayuste’s  right   to  bring  an  action  for  the
file   it   during   the   existence   of   the   marriage   in   accordance   with
article 173 of the Civil Code. Also, it found private respondent to
be entitled to the protection of a buyer in good faith and for value.
The pertinent portion of the public respondent’s decision provides
—
Record shows that plaintiff­appellant wife (sic) instituted on March
2,   1990   her   action   for   annulment   of   the   sale   executed   by   her
husband on February 27, 1987 — long after said vendor­husband
sale was not instituted "during the marriage" as required by Article
173,   the   very   provision   of   law   which   grants   the   wife   the
privilege/right to have the sale executed by her husband annulled,
in derogation of the suppose (sic) vested right of the buyer. The
two   periods   provided   for   in   said   Article   173   —   "during   the
marriage" and "within 10 years" should concur.
We find no merit in plaintiff­appellant’s claim that she discovered
the   sale,   only   after   her   husband’s   death,   when   she   made   an
inventory and found out that the pertinent titles to the land subject
of   the   sale   were   missing.   It   is   settled   in   this   jurisdiction   that
registration   with   the   Register   of   Deeds   is   notice   to   the   whole
world. The questioned deed of sale has long been registered with
the Register of Deeds of Lucena City — on March 5, 1987 — and
in fact the said property was registered in the name of defendant­
appellant   under   Transfer   Certificate   of   Title   No.  T­50046.   Said
TCT in the name of defendant­appellant is now indefeasible.
The  peculiar  circumstances that militates in favor  of  defendant­
appellant buyer are as follows: The questioned deed of sale was
not   actually   without   the   wife’s   signature   signifying   marital
consent,   so   to   speak.   Evidently, Defendant­Appellant was   led   to
believe   by   the   husband­vendor   that   plaintiff­appellant   gave   her
marital consent to the sale, as said husband presented a deed of
sale   supposedly   pre­signed   by   his   wife,   plaintiff­appellant.
Defendant­appellant is therefore undoubtedly a buyer in good faith
and for value, with vested rights equally entitled to the protection
of the law. The questioned deed of sale was duly registered In the
name of defendant­appellant who was issued a Transfer Certificate
of Title.
x       x       x
Unlike the statute of limitations, laches is not a mere question of
time but is principally a question of the inequity on unfairness of
permitting a stale right to be enforced or asserted. (Marcelino v.
CA, 210 SCRA 444). For failure of the plaintiff­appellant wife to
institute   her   action   for   annulment   of   sale,   while   her   husband­
vendor was still alive as required by Article 173 of the New Civil
Code, plaintiff­appellant wife’s right under Article 166 of the same
Code has become stale and is now barred by laches.
In view of the foregoing findings, We rule that the trial court erred
in giving due course to the action for annulment of sale. With the
foregoing  findings  and  resolution  the  other  issues  raised in  this
appeal are now moot and academic.
WHEREFORE, in view of all the foregoing, judgment is hereby
rendered giving due course to the appeal of defendant­appellant,
­and­ dismissing the appeal of plaintiff­appellant.
The decision dated June 20, 1991 rendered by the Regional Trial
Court is REVERSED and SET ASIDE.
The Deed of Absolute Sale executed on February 27, 1987 by and
between  defendant­appellant   and  plaintiff­appellant’s  husband  is
declared VALID and BINDING upon the plaintiff­appellant. 9
Both the trial and the appellate court decisions have established
that Rafael Ayuste sold conjugal property without the consent of
Christina   Ayuste,   his   wife.   This   factual   finding   shall   not   be
disturbed because only questions of law are reviewed in an appeal
under Rule 45 of the Rules of Court subject to certain well­defined
exceptions none of which are present in the instant case. The only
issue   which   remains   to   be   resolved   is   whether   petitioners   are
entitled to the annulment of the contract of sale entered into by
Rafael Ayuste without the consent of Christina Ayuste.
Petitioners claim that since the law expressly prohibits the husband
from alienating real property belonging to the conjugal partnership
without his wife’s consent, the  contract of  sale in question is a
nullity pursuant to article 1409 of the Civil Code which provides
that contracts expressly prohibited by law are inexistent and void
from  the   beginning.   It  is  further   averred  by  petitioners  that  the
present action is not barred because the action to declare the nullity
of   a  contract  does  not  prescribe.  Furthermore,  Christina  Ayuste
cannot be faulted for having brought the action only after the death
of her husband, despite the periods stated in article 173 of the Civil
Code, since she had no knowledge of the sale during his lifetime as
he concealed the same from her. Finally, it is contended that article
166 is the relevant provision, not article 173. 10
Under the Civil Code, although the husband is the administrator of
the conjugal partnership, 11 he cannot alienate or encumber any
real   property   of   the   conjugal   partnership   without   his   wife’s
consent, 12 subject only to certain exceptions specified in the law.
13 The remedy available to the wife in case her husband should
dispose of their conjugal property without her consent is laid down
in Article 173 of the Civil Code which states that —
The wife may, during the marriage, and within ten years from the
transaction  questioned,  ask  the  courts  for  the  annulment  of   any
contract of  the  husband entered into  without her  consent, when
such consent is  required, or  any act or  contract of  the  husband
which tends to defraud her or impair her interest in the conjugal
partnership property. Should the wife fail to exercise this right, she
or her heirs, after the dissolution of the marriage, may demand the
value   of   property   fraudulently   alienated   by   the   husband.
(Emphasis supplied)
There is no ambiguity in the wording of the law. A sale of real
property of the conjugal partnership made by the husband without
the consent of his wife is voidable 14 The action for annulment
must be brought during the marriage and within ten years from the
questioned transaction by the wife. 15 Where the law speaks in
clear and categorical language, there is no room for interpretation
— there is room only for application. 16
In the present case, the deed of sale was executed on February 27,
1987. Rafael Ayuste died on October 13, 1989. However, it was
only on March 2, 1990 that Christina Ayuste filed her complaint
with the lower court asking for the annulment of the sale. Although
the   action   was   filed   within   ten   years   from   the   questioned
transaction, it was not brought during the existence of the marriage
which was dissolved upon the death of Rafael Ayuste in 1989. 17
Clearly, the action for annulment filed by Christina Ayuste was
barred for having been filed out of time.
The fact that Christina Ayuste only learned of the sale after the
death   of   her   husband   is   not   material.   We   affirm   public
respondent’s ruling that registration of the sale with the Register of
Deeds constitutes a notice to the whole world. 18 Precisely, the
purpose of the legislature in providing a system of registration is to
afford   a   means   of   publicity   so   that   persons   dealing   with   real
property   may   search   the   records   and   thereby   acquire   security
against instruments the execution of which have not been revealed
to  them.  19 Since  the  deed of  sale  was registered on March 5,
32
1987, Christina Ayuste is presumed to have constructive notice of
the sale from such date.
WHEREFORE,   the   decision   of   the   Court   of   Appeals   is
AFFIRMED. No pronouncement as to costs.
SO ORDERED. 
Melo, Panganiban and Purisima, JJ., concur.
Separate Opinions
VITUG, J., concurring: 
The questioned sale was concluded on 27 February 1987, before
the  Family   Code   took  effect;  accordingly,   the   transaction   could
still  be   aptly  governed  by the  then  governing provisions  of  the
Civil Code. Under this Code, the husband could not alienate or
encumber any conjugal real property (acquired by the partnership
after   the   effective   date   of   the   Civil   Code)   without   the   consent,
express or implied, of the wife 1 (Art. 166, Civil Code; Bautista v.
Lovina, 98 Phil. 1006, 1956); otherwise, said the Supreme Court in
Garcia   v.   Court   of   Appeals   (130   SCRA   433,   1984),   reiterating
Tolentino v. Cardenas (123 Phil. 517, 1966), the disposition would
be void. I share the view of my colleagues that such a contract,
absent the  wife’s consent should be  considered merely voidable
consistently   with   Article   173   2   of   the   Civil   Code   under   which
provision, the wife could, during the marriage and within 10 years
from   the   questioned   transaction,   seek   its   annulment   (Felipe   v.
Heirs   of   Maximo   Aldon,   120   SCRA   628   [1983];   Reyes   v.   De
Leon, 20 SCRA 369 [1967]; see Roxas v. CA, 198 SCRA 541,
1991 which applied Art. 173 to a lease contract). Failing to do so,
she   or   her   heirs,   after   the   dissolution   of   the   marriage,   could
demand the value of the property alienated (Art. 173, Civil Code).
It   might   not   be   amiss   to   say   that   an   unauthorized   sale   by   the
husband   of   conjugal   real   property,   not   being   the   administrator
thereof, or  of  the  exclusive  paraphernal of  the wife, not having
obtained   her   prior   consent   thereto,   could   be   void   under   the
provisions of Article 1874 3 of the Civil Code.
A   sale   of   encumbrance   of   conjugal   (or   community)   property
concluded after the effectivity of the Family Code is governed by
an entirely different rule that now treats such a disposition to be
void if done without the conjoint consent of the spouses or, in case
of a spouse’s inability, the authority of the court (see Art. 124, 4
Family Code). The declaration that the disposition by just one of
the   spouses  is  void settles  the  apparent  conflict  in  some   of  the
rulings during the regime of the 1950 Civil Code, in construing the
provisions of said code found in Articles 161, 162, 166, 171 and
173, in relation to Articles 1390, 7403 and 1874, thereof.
The Family Code has also abandoned the 1950 Civil Code concept
of having the husband, absent a contrary statement in a marriage
settlement or in a public instrument executed by the husband or an
order   of   a   court   (Arts.   168,   190   and   196,   Civil   Code),   as   the
statutory administrator of the conjugal partnership of gains (Art.
165,   Civil   Code)   that   permitted   suits   to   bind   the   conjugal
partnership   even   where   the   wife   was   not   named   as   a   party
defendant along with the husband (Stosa, Inc., v. Court of Appeals,
182 SCRA  862). Article  124 of  the  Family Code, like  the  rule
established in the system of absolute community of property (see
Arts. 96­98, Family Code), instead confers the administration and
enjoyment 5 of the conjugal property on the spouses jointly. The
marriage settlement, however, may provide for the administration
of  the   property to  by  one   of   the   spouses, the  provisions  of  the
Family   Code   on   conjugal   partnership   of   gain   being   merely
suppletory   thereto.   In   case   of   disagreement   in   the   joint
administration   and   enjoyment   of   the   partnership   property,   the
husband’s decision shall prevail but the wife may avail herself of
the "proper remedy" in court "within five years from the date of the
contract implementing the decision." 

33
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 143826               August 28, 2003
HEIRS OF IGNACIA AGUILAR­REYES, Petitioners,
vs.
Spouses CIPRIANO MIJARES and FLORENTINA 
MIJARES, Respondents.
D E C I S I O N
YNARES­SANTIAGO, J.:
Under the regime of the Civil Code, the alienation or encumbrance
of a conjugal real property requires the consent of the wife. The
absence   of   such   consent   renders   the   entire   transaction 1 merely
voidable   and  not   void.2 The   wife   may,  during   the   marriage   and
within ten years from the transaction questioned, bring an action
for   the   annulment   of   the   contract   entered   into   by   her   husband
without her consent.3
Assailed in this petition for review on certiorari are the January
26, 2000 Decision4 and June 19, 2000, Resolution5 of the Court of
Appeals   in   CA­G.R.   No.   28464   which   declared   respondents   as
purchasers in good faith and set aside the May 31, 1990 and June
29,   1990   Orders   of   the   Regional   Trial   Court   of   Quezon   City,
Branch 101, in Civil Case No. Q­48018.
The controversy stemmed from a dispute over Lot No. 4349­B­
2,6 approximately   396   square   meters,   previously   covered   by
Transfer   Certificate   of   Title   (TCT)   No.   205445,   located   in
Balintawak, Quezon City and registered in the name of Spouses
Vicente   Reyes   and   Ignacia   Aguilar­Reyes. 7 Said   lot   and   the
apartments   built   thereon   were   part   of   the   spouses’   conjugal
properties having been purchased using conjugal funds from their
garments business.8
Vicente   and   Ignacia   were   married   in   1960,   but   had   been
separated de facto since 1974.9 Sometime in 1984, Ignacia learned
that   on   March   1,   1983,   Vicente   sold   Lot   No.   4349­B­2   to
respondent   spouses   Cipriano   and   Florentina   Mijares   for
P40,000.00.10 As   a   consequence   thereof,   TCT   No.   205445   was
cancelled and TCT No. 306087 was issued on April 19, 1983 in the
name of respondent spouses.11 She likewise found out that Vicente
filed   a   petition   for   administration   and   appointment   of   guardian
with the Metropolitan Trial Court of Quezon City, Branch XXI.
Vicente   misrepresented   therein   that   his   wife,   Ignacia,   died   on
March 22, 1982, and that he and their 5 minor children were her
only heirs.12 On September 29, 1983, the court appointed Vicente
as the guardian of their minor children. 13 Subsequently, in its Order
dated October 14, 1983, the court authorized Vicente to sell the
estate of Ignacia.14
On August 9, 1984, Ignacia, through her counsel, sent a letter to
respondent spouses demanding the return of her ½ share in the lot.
Failing to settle the matter amicably, Ignacia filed on June 4, 1996
a   complaint15 for   annulment   of   sale   against   respondent   spouses.
The complaint was thereafter amended to include Vicente Reyes as
one of the defendants.16
In   their   answer,   respondent   spouses   claimed   that   they   are
purchasers in good faith and that the sale was valid because it was
duly approved by the court. 17 Vicente  Reyes, on the  other hand,
contended that what he sold to the spouses was only his share in
Lot No. 4349­B­2, excluding the  share of his wife, and that he
never represented that the  latter was already dead. 18 He likewise
testified   that   respondent   spouses,   through   the   counsel   they
provided him, took advantage of his illiteracy by filing a petition
for  the  issuance  of  letters of  administration and appointment of
guardian without his knowledge.19
On   February   15,   1990,   the   court a   quo rendered   a   decision
declaring the sale of Lot No. 4349­B­2 void with respect to the
share  of   Ignacia.  It  held  that  the   purchase   price   of  the  lot   was
P110,000.00   and   ordered   Vicente   to   return   ½   thereof   or
P55,000.00 to respondent spouses. The dispositive portion of the
said decision, reads­
WHEREFORE,   premises   above   considered,   judgment   is   hereby
rendered declaring the subject Deed of Absolute Sale, dated March
[1,] 1983 signed by and between defendants Vicente Reyes and
defendant Cipriano Mijares NULL AND VOID WITH RESPECT
TO ONE­HALF (1/2) OF THE SAID PROPERTY;
The Register of Deeds of Quezon City is hereby ordered to cancel
TCT No. 306083 (sic) in the names of defendant spouses Cipriano
Mijares  and  Florentina  Mijares  and  to  issue  a   new   TCT   in  the
name of the plaintiff Ignacia Aguilar­Reyes as owner in fee simple
of one­half (1/2) of said property and the other half in the names of
defendant spouses Cipriano Mijares and Florentin[a] Mijares, upon
payment of the required fees therefore;
Said defendant spouses Mijares are also ordered to allow plaintiff
the use and exercise of rights, as well as obligations, pertinent to
her one­half (1/2) ownership of the subject property;
34
Defendant   Vicente   Reyes   is   hereby   ordered   to   reimburse
P55,000.00 with legal rate of interest from the execution of the
subject Deed of Absolute Sale on March 1, 1983, to the defendant
spouses   Cipriano   Mijares   and   Florentina   Mijares   which
corresponds to the one­half (1/2) of the actual purchase price by
the said Mijares but is annulled in this decision (sic);
Defendant Vicente Reyes is hereby further ordered to pay plaintiff
the   amount   of   P50,000.00   by   way   of   moral   and   exemplary
damages, plus costs of this suit.
SO ORDERED.20
Ignacia filed a motion for modification of the decision praying that
the sale be declared void in its entirety and that the respondents be
ordered   to   reimburse   to   her   the   rentals   they   collected   on   the
apartments built on Lot No. 4349­B­2 computed from March 1,
1983.1âwphi1
On May 31, 1990, the trial court modified its decision by declaring
the   sale   void   in   its   entirety   and   ordering   Vicente   Reyes   to
reimburse respondent spouses the purchase price of P110,000, thus
–
WHEREFORE, premises considered, judgment is hereby rendered
declaring the subject Deed of Absolute Sale, dated March 1, 1983
signed by and between defendants Vicente Reyes and defendant
Cipriano Mijares as null and void ab initio, in view of the absence
of the wife’s conformity to said transaction.
Consequent   thereto,   the   Register   of   Deeds   for   Quezon   City   is
hereby ordered to cancel TCT No. 306083 (sic) in the name of
Cipriano Mijares and Florentin[a] Mijares and issue a new TCT in
the name of the plaintiff and defendant Ignacia Aguilar­Reyes and
Vicente Reyes as owners in fee simple, upon payment of required
fees therefore.
Defendant Vicente Reyes is hereby ordered to pay the amount of
one hundred ten thousand pesos (P110,000.00) with legal rate of
interest at 12% per annum from the execution of the subject Deed
of Absolute Sale on March 1, 1983.
Further, defendant Vicente Reyes is ordered to pay the amount of
P50,000.00 by way of moral and exemplary damages, plus costs of
this suit.
SO ORDERED.21
On motion22 of Ignacia, the court issued an Order dated June 29,
1990   amending   the   dispositive   portion   of   the   May   31,   1990
decision by correcting the Transfer Certificate of Title of Lot No.
4349­B­2, in the name of Cipriano Mijares and Florentina Mijares,
from   TCT   No.   306083   to   TCT   No.   306087;   and   directing   the
Register of Deeds of Quezon City to issue a new title in the name
of Ignacia Aguilar­Reyes and Vicente Reyes. The Order likewise
specified that Vicente Reyes should pay Ignacia Aguilar­Reyes the
amount of P50,000.00 as moral and exemplary damages.23
Both Ignacia Aguilar­Reyes and respondent spouses appealed the
decision to the Court of Appeals.24 Pending the appeal, Ignacia died
and she was substituted by her compulsory heirs.25
Petitioners contended that they are entitled to reimbursement of the
rentals collected on the apartment built on Lot No. 4349­B­2, while
respondent spouses claimed that they are buyers in good faith. On
January 26, 2000, the Court of Appeals reversed and set aside the
decision of the trial court. It ruled that notwithstanding the absence
of Ignacia’s consent to the sale, the same must be held valid in
favor  of  respondents because  they were innocent purchasers for
value.26 The decretal potion of the appellate court’s decision states
– Family   Code   took   effect   by   the   husband   of   the   conjugal
WHEREFORE, premises considered, the Decision appealed from
and the Orders dated May 31, 1990 and June 29, 1990, are SET
ASIDE and in lieu thereof a new one is rendered –
1.   Declaring   the   Deed   of   Absolute   Sale   dated   March   1,   1983
executed   by   Vicente   Reyes   in   favor   of   spouses   Cipriano   and
[Florentina] Mijares valid and lawful;
2. Ordering Vicente Reyes to pay spouses Mijares the amount of
P30,000.00 as attorney’s fees and legal expenses; and
3. Ordering Vicente Reyes to pay spouses Mijares P50,000.00 as
moral damages.
No pronouncement as to costs.
SO ORDERED.27
Undaunted   by   the   denial   of   their   motion   for   reconsideration,
https://lawphil.net/judjuris/juri2003/aug2003/gr_143826_2003.htm
l  ­  fnt28petitioners  filed  the   instant  petition  contending  that the
assailed   sale   of   Lot   No.   4392­B­2   should   be   annulled   because
respondent spouses were not purchasers in good faith.
The issues for resolution are as follows: (1) What is the status of
the sale of Lot No. 4349­B­2 to respondent spouses? (2) Assuming
that the sale is annullable, should it be annulled in its entirety or
only   with   respect   to   the   share   of   Ignacia?   (3)   Are   respondent
spouses purchasers in good faith?
Articles 166 and 173 of the Civil Code, 29 the governing laws at the
time the assailed sale was contracted, provide:
Art.166. Unless the wife has been declared a non compos mentis or
a   spendthrift,   or   is   under   civil   interdiction   or   is   confined   in   a
leprosarium,   the   husband   cannot   alienate   or   encumber   any   real
property of the conjugal partnership without the wife’s consent. If
she   refuses   unreasonably   to   give   her   consent,   the   court   may
compel her to grant the same…
Art. 173. The wife may, during the marriage and within ten years
from the transaction questioned, ask the courts for the annulment
of any contract of the husband entered into without her consent,
when   such   consent   is   required,   or   any   act   or   contract   of   the
husband which tends to defraud her or impair her interest in the
conjugal partnership property. Should the wife fail to exercise this
right, she or her heirs after the dissolution of the marriage, may
demand   the   value   of   property   fraudulently   alienated   by   the
husband.
Pursuant   to   the   foregoing   provisions,   the   husband   could   not
alienate   or   encumber   any   conjugal   real   property   without   the
consent, express or implied, of the wife otherwise, the contract is
voidable. Indeed, in several cases30 the Court had ruled that such
alienation or encumbrance by the husband is void. The better view,
however, is to consider the transaction as merely voidable and not
void.31 This   is   consistent   with   Article   173   of   the   Civil   Code
pursuant to which the wife could, during the marriage and within
10 years from the questioned transaction, seek its annulment.32
In the case of Heirs of Christina Ayuste v. Court of Appeals, 33 it
was categorically held that –
There is no ambiguity in the wording of the law. A sale of real
property of the conjugal partnership made by the husband without
the consent of his wife is voidable. The action for annulment must
be   brought   during   the   marriage   and   within   ten   years   from   the
questioned transaction by the wife. Where the law speaks in clear
and categorical language, there  is no room for interpretation —
there is room only for application.34
Likewise,   in Spouses   Guiang   v.   Court   of   Appeals,35 the   Court
quoted with approval the ruling of the trial court that under the
Civil   Code,   the   encumbrance   or   alienation   of   a   conjugal   real
property by the husband absent the wife’s consent, is voidable and
not void. Thus –
…Under   Article   166   of   the   Civil   Code,   the   husband   cannot
generally alienate or encumber any real property of the conjugal
partnership   without   the   wife’s   consent.   The   alienation   or
35
encumbrance if so made however is not null and void. It is merely
voidable. The offended wife may bring an action to annul the said
alienation or encumbrance. Thus, the provision of Article 173 of
the Civil Code of the Philippines, to wit:
Art. 173. The wife may, during the marriage and within ten years
from the transaction questioned, ask the courts for the annulment
of any contract of the husband entered into without her consent,
when   such   consent   is   required,   or   any   act   or   contract   of   the
husband which tends to defraud her or impair her interest in the
conjugal partnership property. Should the wife fail to exercise this
right, she or her heirs after the dissolution of the marriage, may
demand   the   value   of   property   fraudulently   alienated   by   the
husband.
This   particular   provision   giving   the   wife   ten   (10)   years   x   x   x
during [the] marriage to annul the alienation or encumbrance was
not   carried   over   to   the   Family   Code.   It   is   thus   clear   that   any
alienation or encumbrance made after August 3, 1988 when the
partnership property without the consent of the wife is null and
void…
In the case at bar, there is no dispute that Lot No. 4349­B­2, is a
conjugal property having been purchased using the conjugal funds
of the spouses during the subsistence of their marriage. It is beyond
cavil   therefore   that   the   sale   of   said   lot   to   respondent   spouses
without   the   knowledge   and  consent  of  Ignacia  is   voidable.  Her
action to annul the March 1, 1983 sale which was filed on June 4,
1986, before her demise is perfectly within the 10 year prescriptive
period under Article 173 of the Civil Code. Even if we reckon the
period from November 25, 1978 which was the date when Vicente
and the respondent spouses entered into a contract concerning Lot
No. 4349­B­2, Ignacia’s action would still be within the prescribed
period.
Anent   the   second   issue,   the   trial   court   correctly   annulled   the
voidable   sale   of   Lot   No.   4349­B­2   in   its   entirety.   In Bucoy   v.
Paulino,36 a case involving the annulment of sale with assumption
of mortgages executed by the husband without the consent of the
wife,   it   was   held   that   the   alienation   or   encumbrance   must   be
annulled in its entirety and not only insofar as the share of the wife
in the conjugal property is concerned. Although the transaction in
the   said   case   was   declared   void   and   not   merely   voidable,   the
rationale for the annulment of the whole transaction is the same
thus –
The plain meaning attached to the plain language of the law is that
the contract, in its entirety, executed by the husband without the
wife's   consent,   may   be   annulled   by   the   wife.   Had   Congress
intended to limit such annulment in so far  as the contract shall
"prejudice" the wife, such limitation should have been spelled out
in the statute. It is not the legitimate concern of this Court to recast
the law. As Mr. Justice Jose B. L. Reyes of this Court and Judge
Ricardo C. Puno of  the Court of First Instance correctly stated,
"[t]he rule (in the first sentence of Article 173) revokes Baello vs.
Villanueva, 54 Phil. 213 and Coque vs. Navas Sioca, 45 Phil. 430,"
in which cases annulment was held to refer only to the extent of
the one­half interest of the wife…
The   necessity   to  strike   down  the  contract  of   July  5,  1963  as  a
whole, not merely as to the share of the wife, is not without its
basis in the  common­sense  rule. To be underscored here  is that
upon the provisions of Articles 161, 162 and 163 of the Civil Code,
the conjugal partnership is liable for many obligations while the
conjugal partnership exists. Not only that. The conjugal property is
even subject to the payment of debts contracted by either spouse
before   the   marriage,   as   those   for   the   payment   of   fines   and
indemnities imposed upon them after the responsibilities in Article
161 have been covered (Article 163, par. 3), if it turns out that the
spouse who is bound thereby, "should have no exclusive property
or if it should be insufficient." These are considerations that go
beyond the mere equitable share of the wife in the property. These
are reasons enough for the husband to be stopped from disposing
of   the   conjugal  property  without   the   consent  of   the  wife.  Even
more fundamental is the fact that the nullity is decreed by the Code
not   on   the   basis   of   prejudice   but   lack   of   consent   of   an
indispensable party to the contract under Article 166.37
With  respect  to  the   third  issue,  the   Court  finds  that  respondent
spouses are not purchasers in good faith. A purchaser in good faith
is   one   who  buys   property   of   another,  without   notice   that   some
other person has a right to, or interest in, such property and pays
full and fair price for the same, at the time of such purchase, or
before he has notice of the claim or interest of some other persons
in the property. He buys the property with the belief that the person
from whom he receives the thing was the owner and could convey
title to the property. A purchaser cannot close  his eyes to facts
which should put a reasonable man on his guard and still claim he
acted in good faith.38
In the instant case, there existed circumstances that should have
placed   respondent   spouses   on   guard.   The   death   certificate   of
Ignacia, shows that she died on March 22, 1982. The same death
certificate, however, reveals that – (1) it was issued by the Office
of the Civil Registrar of Lubao Pampanga on March 10, 1982; (2)
the alleged death of Ignacia was reported to the Office of the Civil
Registrar on March 4, 1982; and (3) her burial or cremation would annulment. The October 14, 1983 order authorizing the sale of the
be on March 8, 1982.39 These obvious flaws in the death certificate estate   of   Ignacia,   could   not   have   validated  the   sale   of   Lot   No.
should have prompted respondents to investigate further, especially 4349­B­2 because  said order was issued on the assumption that
so   that   respondent   Florentina   Mijares   admitted   on   cross Ignacia was already dead and that the sale dated March 1, 1983
examination   that   she   asked   for   the   death   certificate   of   Ignacia was never categorically approved in the said order.
because she was suspicious that Ignacia was still alive. 40 Moreover,
The fact that the 5 minor children44 of Vicente represented by the
respondent spouses had all the opportunity to verify the claim of
latter, signed the March 1, 1983 deed of sale of Lot No. 4349­B­2
Vicente that he is a widower because it was their lawyer, Atty.
will not estop them from assailing the validity thereof. Not only
Rodriguito   S.   Saet,   who   represented   Vicente   in   the   special
were they too young at that time to understand the repercussions of
proceedings before the Metropolitan Trial Court.
the sale, they likewise had no right to sell the property of their
Neither can respondent spouses rely on the alleged court approval mother who, when they signed the deed, was very much alive.
of the sale. Note that the Order issued by the Metropolitan Trial
If a voidable contract is annulled, the restoration of what has been
Court   of   Quezon   City,   Branch   XXXI,   appointing   Vicente   as
given is proper. The relationship between parties in any contract
guardian of his 5 minor children, as well as the Order authorizing
even if subsequently annulled must always be characterized and
him to sell the estate of Ignacia were issued only on September 29,
punctuated by good faith and fair dealing. Hence, for the sake of
1983 and October 14, 1983, respectively. On the other hand, the
justice and equity, and in consonance with the salutary principle of
sale of the entire Lot No. 4349­B­2 to respondent spouses appears
non­enrichment at another’s expense, the Court sustains the trial
to have been made not on March 1, 1983, but even as early as
court’s order directing Vicente to refund to respondent spouses the
November   25,   1978.   In   the   "Agreement"   dated   November   25,
amount of P110,000.00 which they have paid as purchase price of
1978, Vicente in consideration of the amount of P110,000.00, sold
Lot   No.   4349­B­2.45 The   court a   quo correctly   found   that   the
to Cipriano Mijares Lot No. 4349­B­2 on installment basis, with
subject of the sale was the entire Lot No. 4349­B­2 and that the
the  first  installment   due  on  or   before  July  31,  1979. 41 This  was
consideration thereof is not P40,000.00 as stated in the March 1,
followed by a "Memorandum of Understanding" executed on July
1983   deed   of   sale,   but   P110,000.00   as   evidenced   by   the   –   (1)
30, 1979, by Vicente and Cipriano – (1) acknowledging Cipriano’s
"Agreement"   dated November  25,  1978 as  well  as  the  July  30,
receipt of Vicente’s down payment in the amount of P50,000.00;
1979   "Memorandum   of   Understanding"   and   the   July   14,   1981
and (2) authorizing Florentina Mijares to collect rentals. 42 On July
"Memorandum   of   Agreement"   which   served   as   receipts   of   the
14, 1981, Vicente and Cipriano executed another "Memorandum
installment payments made by respondent Cipriano Mijares; and
of Agreement," stating, among other, that out of the purchase price
(2)   the   receipt   duly   signed   by   Vicente   Reyes   acknowledging
of   P110,000.00   Vicente   had   remaining   balance   of
receipt of the amount of P110,000.00 from respondent spouses as
P19,000.00.43 Clearly therefore, the special proceedings before the
payment of the sale of the controverted lot.46
Metropolitan Trial Court of Quezon City, Branch XXXI, could not
have  been the  basis of respondent spouses’  claim of  good faith The trial court, however, erred in imposing 12% interest per annum
because the sale of Lot No. 4349­B­2 occurred prior thereto. on the amount due the respondents. In Eastern Shipping Lines, Inc.
v. Court of Appeals,47 it was held that interest on obligations not
Respondent spouses cannot deny knowledge that at the time of the
constituting a loan or forbearance of money is six percent (6%)
sale in 1978, Vicente was married to Ignacia and that the latter did
annually. If the purchase price could be established with certainty
not give her conformity to the sale. This is so because the 1978
at the  time  of  the  filing  of  the  complaint, the  six percent (6%)
"Agreement" described Vicente as "married" but the conformity of
interest should be computed from the date the complaint was filed
his  wife   to  the   sale   did not  appear   in  the   deed. Obviously,  the
until finality of the decision. In Lui v. Loy,48 involving a suit for
execution of another deed of sale in 1983 over the same Lot No.
reconveyance and annulment of title filed by the first buyer against
4349­B­2, after the alleged death of Ignacia on March 22, 1982, as
the seller and the second buyer, the Court, ruling in favor of the
well as the institution of the special proceedings were, intended to
first   buyer   and   annulling   the   second   sale,   ordered   the   seller   to
correct the absence of Ignacia’s consent to the sale. Even assuming
refund to the second buyer (who was not a purchaser in good faith)
that respondent spouses believed in good faith that Ignacia really
the   purchase   price   of   the   lots.   It   was   held   therein   that   the   6%
died   on   March   22,   1982,   after   they   purchased   the   lot,   the   fact
interest   should   be   computed   from   the   date   of   the   filing   of   the
remains that the sale of Lot No. 4349­B­2 prior to Ignacia’s alleged
complaint by the first buyer. After the judgment becomes final and
demise   was   without   her   consent   and   therefore   subject   to
36
executory until  the   obligation  is  satisfied,  the   amount due  shall
earn interest at 12%  per  year, the  interim  period being deemed
equivalent to a forbearance of credit.49
Accordingly,   the   amount   of   P110,000.00   due   the   respondent
spouses which could be determined with certainty at the time of
the filing of the complaint shall earn 6% interest per annum from
June  4,  1986 until  the   finality  of   this  decision.  If   the   adjudged
principal   and   the   interest   (or   any   part   thereof)   remain   unpaid
thereafter,   the   interest   rate   shall   be   twelve   percent   (12%)   per
annum computed from the time the judgment becomes final and
executory until it is fully satisfied.
Petitioner’s prayer for payment of rentals should be denied. Other
than the allegation of Ignacia in her Sinumpaang Salaysay that the
apartments   could   be   rented   at   P1,000.00   a   month,   no   other
evidence   was   presented   to   substantiate   her   claim.   In   awarding
rentals which are in the nature of actual damages, the Court cannot
rely on mere assertions, speculations, conjectures or guesswork but
must   depend   on   competent   proof   and   on   the   best   evidence
obtainable regarding the actual amount of loss.50 None, having been
presented in the case at bar, petitioner’s claim for rentals must be
denied.
While   as   a   general   rule,   a   party   who   has   not   appealed   is   not
entitled   to   affirmative   relief   other   than   the   ones   granted   in   the
decision   of   the   court   below,   law   and   jurisprudence   authorize   a
tribunal to consider errors, although unassigned, if they involve (1)
errors   affecting   the   lower   court’s   jurisdiction   over   the   subject
matter, (2) plain errors not specified, and (3) clerical errors.51 In
this   case,   though   defendant   Vicente   Reyes   did   not   appeal,   the
"plain   error"   committed   by   the   court a   quo as   to   the   award   of
moral and exemplary damages must be corrected. These awards
cannot be lumped together as was done by the trial court. 52 Moral
and   exemplary   damages   are   different   in   nature,   and   require
separate   determination.   Moral   damages   are   awarded   where   the
claimant   experienced   physical   suffering,   mental   anguish,   fright,
serious anxiety, besmirched reputation, wounded feelings, moral
shock, social humiliation, and similar injury as a result of the act
complained of.53 The award of exemplary damages, on the other
hand,   is   warranted   when   moral,   temperate,   liquidated,   or
compensatory damages were likewise awarded by the court.54
payment   of   moral   and   exemplary   damages   must   be   made   by
Vicente to his children, petitioners in this case.
WHEREFORE,   in   view   of   all   the   foregoing,   the   petition   is
PARTIALLY   GRANTED.   The   January   26,   2000   Decision   and
June 19, 2002, Resolution of the Court of Appeals in CA­G.R. No.
28464 are REVERSED and SET ASIDE. The May 31, 1990 Order
of the Regional Trial Court of Quezon City, Branch 101, in Civil
Case No. Q­48018, which annulled the March 1, 1983 Deed of
Absolute Sale over Lot No. 4349­B­2, and ordered the Register of
Deeds of Quezon City to cancel TCT No. 306087 in the name of
respondent   spouses   Cipriano   Mijares   and   Florentina   Mijares
covering the same property; as well as the June 29, 1990 Order
correcting   the   typographical   errors   in   the   order   dated   March  1,
1983, are REINSTATED, with the following modifications –
(1) The Register of Deeds of Quezon City is ordered to
issue a new certificate of title over Lot No. 4349­B­2, in
the name of petitioners as co­owners thereof;
(2)   Vicente   Reyes   is   ordered   to   reimburse   the
respondent   spouses   the   amount   of   P110,000.00   as
purchase price of Lot No. 4349­B­2, with interest at 6%
per   annum   from   June   4,   1986,   until   finality   of   this
decision. After this decision becomes final, interest at
the rate of 12% per annum on the principal and interest
(or   any   part   thereof)   shall   be   imposed   until   full
payment.
(3) Defendant Vicente Reyes is ordered to pay the heirs
of   the   late   Ignacia   Aguilar­Reyes,   the   amounts   of
P25,000.00   as   moral   damages   and   P25,000.00   as
exemplary damages.
SO ORDERED.
Davide,   Jr.,   C.J.,   (Chairman),   Vitug,   Carpio,   and   Azcuna,   JJ.,
concur.

Hence, the trial court’s award of "P50,000.00 by way of moral and
exemplary damages" should be modified. Vicente Reyes should be
ordered to pay the amounts of P25,000.00 as moral damages and
P25,000.00   as   exemplary   damages.   Since   Vicente   Reyes   was
among   the   heirs   substituted   to   the   late   Ignacia   Aguilar­Reyes,

37
38
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 141323               June 8, 2005
DAVID   V.   PELAYO   and   LORENZA* B.
PELAYO, Petitioners,
vs.
MELKI E. PEREZ, Respondent.
D E C I S I O N
AUSTRIA­MARTINEZ, J.:
This   resolves   the   petition   for   review   on certiorari seeking   the
reversal   of   the   Decision 1 of   the   Court   of   Appeals   (CA)
promulgated on April 20, 1999 which reversed the Decision of the
Regional Trial Court (RTC) of Panabo, Davao, Branch 34, in Civil
Case No. 91­46; and the CA Resolution dated December 17, 1999
denying petitioners’ motion for reconsideration.
The antecedent facts as aptly narrated by the CA are as follows:
David Pelayo (Pelayo),by a Deed of Absolute Sale executed on
January 11, 1988, conveyed to Melki Perez (Perez) two parcels of
agricultural land (the  lots)  situated in Panabo, Davao which are
portions of Lot 4192, Cad. 276 covered by OCT P­16873.
Loreza Pelayo (Loreza), wife of Pelayo, and another one whose
signature is illegible witnessed the execution of the deed.
Loreza,   however,   signed   only   on   the   third   page   in   the   space
provided for witnesses on account of which Perez’ application for
registration of the deed with the Office of the Register of Deeds in
Tagum, Davao was denied.
Perez thereupon asked Loreza to sign on the first and second pages
of the deed but she refused, hence, he instituted on August 8, 1991
the instant complaint for specific performance against her and her
husband Pelayo (defendants).
The defendants moved to dismiss the complaint on the ground that
it stated no cause of action, citing Section 6 of RA 6656 otherwise
known as the Comprehensive Agrarian Reform Law which took
effect on June 10, 1988 and which provides that contracts executed
prior thereto shall "be valid only when registered with the Register
of Deeds within a period of three (3) months after the effectivity of
this Act."
The questioned deed having been executed on January 10, 1988,
the defendants claimed that Perez had at least up to September 10,
1988 within which to register the same, but as they failed to, it is
not valid and, therefore, unenforceable.
The   trial   court  thus  dismissed  the   complaint.   On  appeal  to  this
Court, the dismissal was set aside and the case was remanded to
the lower court for further proceedings.
In   their   Answer,   the   defendants   claimed   that   as   the   lots   were
occupied  illegally  by  some  persons  against  whom  they  filed  an
ejectment case, they and Perez who is their friend and known at the
time   as   an   activist/leftist,   hence   feared   by   many,   just   made   it
appear in the deed that the lots were sold to him in order to frighten
said illegal occupants, with the intentional omission of Loreza’s
signature so that the deed could not be registered; and that the deed
being simulated and bereft of consideration is void/inexistent.
Perez   countered   that   the   lots   were   given   to   him   by   defendant
Pelayo in consideration of his services as his attorney­in­fact to
make the necessary representation and negotiation with the illegal
occupants­defendants   in   the   ejectment   suit;   and   that   after   his
relationship with defendant Pelayo became sour, the latter sent a
letter to the Register  of Deeds of  Tagum requesting him not to
entertain   any   transaction   concerning   the   lots   title   to   which  was
entrusted to Perez who misplaced and could [not] locate it.
Defendant Pelayo claimed in any event, in his Pre­trial brief filed
on March 19, 1996, that the deed was without his wife Loreza’s
consent,   hence,   in   light   of   Art.   166   of   the   Civil   Code   which
provides:
Article   166.   Unless   the   wife   has   been   declared   a   non   compos
mentis or a spendthrift, or is under civil interdiction or is confined
in a leprosarium, the husband cannot alienate or encumber any real
property of the conjugal partnership without the wife’s consent . . .
it is null and void.
The trial court, finding, among others, that Perez did not possess,
nor pay the taxes on the lots, that defendant Pelayo was indebted to
Perez for services rendered and, therefore, the deed could only be
considered as evidence of debt, and that in any event, there was no
marital consent to nor actual consideration for the deed, held that
the deed was null and void and accordingly rendered judgment the
dispositive portion of which reads:
WHEREFORE,   judgment   is   hereby   rendered   ordering   and
directing the defendants to pay plaintiff Melki Perez the sum of
TEN   THOUSAND   (₱10,000.00)   Pesos   as   principal   with   12%
39
interest per annum starting from the date of filing of the complaint
on August 1, 1991 until plaintiff is fully paid.
The defendants shall likewise pay to plaintiff the sum of THREE
THOUSAND (₱3,000.00) as attorney’s fees.
The court further orders that the Deed of Absolute Sale, (Annex
‘A’) of the complaint and (Annex ‘C’) of the plaintiff’s Motion for
Summary Judgment is declared null and void and without force
and it is likewise removed as a cloud over defendants’ title and
property in suit. . . ."2
The RTC Decision was appealed by herein respondent Perez to the
CA. Petitioners failed to file their appellees’ brief. The CA then
promulgated its Decision on April 20, 1999 whereby it ruled that
by Lorenza’s signing as witness to the execution of the deed, she
had knowledge of the transaction and is deemed to have given her
consent   to   the   same;   that   herein   petitioners   failed   to   adduce
sufficient   proof   to   overthrow   the   presumption   that   there   was
consideration for the deed, and that petitioner David Pelayo, being
a lawyer, is presumed to have  acted with due care and to have
signed the deed with full knowledge of its contents and import.
The  CA  reversed and set aside  the  RTC  Decision, declaring  as
valid   and   enforceable   the   questioned   deed  of   sale   and  ordering
herein petitioner Lorenza Pelayo to affix her signature on all pages
of said document.
Petitioners moved for reconsideration of the decision but the same
was   denied   per   Resolution   dated   December   17,   1999.   The   CA
found said motion to have been filed out of time and ruled that
even  putting  aside  technicality,   petitioners  failed  to  present  any
ground bearing on the merits of the case to justify a reversal or
setting aside of the decision.
Hence,   this   petition   for   review   on certiorari on   the   following
grounds:
1.   The   CA   erred   in   ignoring   the   specific   provision   of
Section   6,   in   relation   to   Section   4   of   R.A.   No.   6657
otherwise   known as the  Comprehensive   Agrarian  Reform
Law of 1988 which took effect on June 15, 1988 and which
provides that contracts executed prior thereto shall "be valid
only when registered with the Register of Deeds within a
period of three (3) months after the effectivity of this Act."
2. The CA erred in holding that the deed of sale was valid
and considering the  ₱10,000.00 adjudged by the trial court
as Perez’s remuneration as the consideration for the deed of
sale, instead of declaring the same as null and void for being
fictitious or simulated and on the basis of Art. 491, Par. 2 of
 the New Civil Code which prohibits agents from acquiring
by purchase properties from his principal under his charge.
3.   The   CA   made   a   novel   ruling   that   there   was   implied
marital consent of the wife of petitioner David Pelayo.
4.   Petitioners   should   have   been   allowed   to   file   their
appellees’   brief   to   ventilate   their   side,   considering   the
existence   of   peculiar   circumstances   which   prevented
petitioners from filing said brief.
On the other hand, respondent points out that the CA, in resolving
the first appeal docketed as CA­G.R. SP No. 387003 brought by
respondent  assailing  the  RTC  Order   granting  herein  petitioners’
motion to dismiss, already ruled that under R.A. No. 6657, the sale
or transfer of private agricultural land is allowed only when the
area of  the  land being conveyed constitutes or  is a  part of, the
landowner­seller retained area and when the total landholding of
the   purchaser­transferee,   including   the   property   sold,   does   not
exceed five (5) hectares; that in this case, the land in dispute is
only 1.3 hectares and there is no proof that the transferee’s (herein
respondent)   total   landholding   inclusive   of   the   subject   land   will
exceed 5 hectares, the landholding ceiling prescribed by R.A. No.
6657; that the failure of respondent to register the instrument was
not due to his fault or negligence but can be attributed to Lorenza’s
unjustified refusal to sign two pages of the deed despite several
requests of respondent; and that therefore, the CA ruled that the
deed of sale subject of this case is valid under R.A. No. 6657.
Respondent   further   maintains   that   the   CA   correctly   held   in   its
assailed Decision that there was consideration for the contract and
that Lorenza is deemed to have given her consent to the deed of
sale.
Respondent   likewise   opines   that   the   CA   was   right   in   denying
petitioners’ motion for reconsideration where they prayed that they
be allowed to file their appellees’ brief as their counsel failed to
file the same on account of said counsel’s failing health due to
cancer   of   the   liver.   Respondent   emphasized   that   in   petitioners’
motion for reconsideration, they did not even cite any errors made
by the CA in its Decision.
The issues boil down to the question of whether or not the deed of
sale   was   null   and   void   on   the   following   grounds:   (a)   for   not
complying with the provision in R.A. No. 6657 that such document
must be registered with the Register of Deeds within three months
after the effectivity of said law; (b) for lack of marital consent; (c)
for being prohibited under Article 1491 (2) of the Civil Code; and
(d) for lack of consideration.
We rule against petitioners.
The issue of whether or not the deed of sale is null and void under
R.A. No. 6657, for respondent’s failure to register said document
with the Register of Deeds within three months after the effectivity
of R.A. No. 6657, had been resolved with finality by the CA in its
Decision   dated   November   24,   1994   in   CA­G.R.   SP   No.
38700.4 Herein petitioners no longer elevated said CA Decision to
this Court and the same became final and executory on January 7,
1995.5
In   said   decision,   the   CA   interpreted   Section   4,   in   relation   to
Section 70 of R.A. No. 6657, to mean thus:
. . . the proper interpretation of both sections is that under R.A. No.
6657, the sale or transfer of a private agricultural land is allowed
only when said land area constitutes or is a part of the landowner­
seller retained area and only when the total landholdings of the
purchaser­transferee, including the property sold does not exceed
five (5) hectares.
Aside from declaring that the failure of respondent to register the
deed was not of his own fault or negligence, the CA ruled that
respondent’s failure to register the deed of sale within three months
after effectivity of The Comprehensive Agrarian Reform Law did
not   invalidate   the   deed   of   sale   as   "the   transaction   over   said
property is not proscribed by R.A. No. 6657."
Thus, under the principle of law of the case, said ruling of the CA
is   now   binding   on   petitioners.1avvph!1 Such   principle   was
elucidated in Cucueco vs. Court of Appeals,6 to wit:
Law of the case has been defined as the opinion delivered on a
former appeal. It is a term applied to an established rule that when
an appellate court passes on a question and remands the case to the
lower   court   for   further   proceedings,   the   question   there   settled
becomes the law of the case upon subsequent appeal. It means that
whatever is once irrevocably established as the controlling legal
rule   or   decision   between   the   same   parties   in   the   same   case
continues to be the law of the case, whether correct on general
principles or not, so long as the facts on which such decision was
predicated continue to be the facts of the case before the court.
Petitioners not having questioned the Decision of the  CA dated
November 24, 1994 which then attained finality, the ruling that the
deed   of   sale   subject   of   this   case   is   not   among   the   transactions
deemed as invalid under R.A. No. 6657, is now immutable.
We agree with the CA ruling that petitioner Lorenza, by affixing
her   signature   to   the   Deed   of   Sale   on   the   space   provided   for
40
witnesses,   is   deemed   to   have   given   her   implied   consent   to   the
contract of sale.
Sale  is a consensual contract that is perfected by mere  consent,
which may either be express or implied. 7 A wife’s consent to the
husband’s disposition of conjugal property does not always have to
be explicit or set forth in any particular document, so long as it is
shown by acts of the wife that such consent or approval was indeed
given.8 In the present case, although it appears on the face of the
deed of sale that Lorenza signed only as an instrumental witness,
circumstances leading to the execution of said document point to
the fact that Lorenza was fully aware of the sale of their conjugal
property and consented to the sale.
In   their   Pre­Trial   Brief,9 petitioners   admitted   that   even   prior   to
1988, they have been having serious problems, including threats to
the life of petitioner David Pelayo, due to conflicts with the illegal
occupants of the property in question, so that respondent, whom
many feared for being a leftist/activist, offered his help in driving
out said illegal occupants.
Human experience tells us that a wife would surely be aware of
serious   problems   such   as   threats   to   her   husband’s   life   and   the
reasons  for  such  threats.  As  they  themselves  stated,  petitioners’
problems over the subject property had been going on for quite
some time, so it is highly improbable for Lorenza not to be aware
of   what   her   husband   was   doing   to   remedy   such   problems.
Petitioners do not deny that Lorenza Pelayo was present during the
execution   of   the   deed   of   sale   as   her   signature   appears   thereon.
Neither   do   they   claim   that   Lorenza   Pelayo   had   no   knowledge
whatsoever about the contents of the subject document. Thus, it is
quite
certain that she knew of the sale of their conjugal property between
her husband and respondent.
Under  the  rules of evidence, it is presumed that a person takes
ordinary care of his concerns.10 Petitioners did not even attempt to
overcome   the   aforementioned   presumption   as   no   evidence   was
ever presented to show that Lorenza was in any way lacking in her
mental faculties and, hence, could not have fully understood the
ramifications of signing the deed of sale. Neither did petitioners
present   any   evidence   that   Lorenza   had   been   defrauded,   forced,
intimidated   or   threatened   either   by   her   own   husband   or   by
respondent into affixing her signature on the subject document. If
Lorenza had any objections over the conveyance of the disputed
property, she could have totally refrained from having any part in
the execution of the deed of sale. Instead, Lorenza even affixed her
signature thereto.
Moreover, under Article 173, in relation to Article 166, both of the
New  Civil Code, which was still in effect on January 11, 1988
when   the   deed   in   question   was   executed,   the   lack   of   marital
consent to the disposition of conjugal property does not make the
contract void ab initio but merely voidable. Said provisions of law
provide:
Art.   166.   Unless   the   wife   has   been   declared   a non   compos
mentis or a spendthrift, or is under civil interdiction or is confined
in a leprosarium, the husband cannot alienate or encumber any real
property of the conjugal property without the wife’s consent. If she
refuses unreasonably to give her consent, the court may compel her
to grant the same.
. . .
Art. 173. The wife may, during the marriage, and within ten years
from the transaction questioned, ask the courts for the annulment
of any contract of the husband entered into without her consent,
when   such   consent   is   required,   or   any   act   or   contract   of   the
husband which tends to defraud her or impair her interest in the
conjugal partnership property. Should the wife fail to exercise this
right, she or her heirs, after the dissolution of the marriage, may
demand   the   value   of   property   fraudulently   alienated   by   the
husband.
Hence, it has been held that the contract is valid until the court
annuls   the   same   and   only   upon   an   action   brought   by   the   wife
whose   consent   was   not   obtained.11 In   the   present   case,   despite
respondent’s repeated demands for Lorenza to affix her signature
on   all   the   pages   of   the   deed   of   sale,   showing   respondent’s
insistence on enforcing said contract, Lorenza still did not file a
case   for   annulment   of   the   deed   of   sale.   It   was   only   when
respondent filed a complaint for specific performance on August 8,
1991   when   petitioners   brought   up   Lorenza’s   alleged   lack   of
consent   as   an   affirmative   defense.   Thus,   if   the   transaction   was
indeed entered  into  without  Lorenza’s consent,  we  find it  quite
puzzling why for more than three and a half years, Lorenza did
absolutely nothing to seek the nullification of the assailed contract.
The foregoing circumstances lead the Court to believe that Lorenza
knew of the full import of the transaction between respondent and
her
husband; and, by affixing her signature on the deed of sale, she, in
effect,  signified her  consent  to  the   disposition  of   their   conjugal
property.
With regard to petitioners’  asseveration  that  the  deed of  sale  is
invalid under Article 1491, paragraph 2 of the New Civil Code, we
find such argument unmeritorious. Article 1491 (2) provides:
Art. 1491. The following persons cannot acquire by purchase, even
at   a   public   or   judicial   auction,   either   in   person   or   through   the
mediation of another:
. . .
(2) Agents, the property whose administration or sale may have
been entrusted to them, unless the consent of the principal has been
given;
. . .
In Distajo vs. Court of Appeals,12 a landowner, Iluminada Abiertas,
designated one of her sons as the administrator of several parcels
of   her   land.   The   landowner   subsequently   executed   a   Deed   of
Certification of Sale of Unregistered Land, conveying some of said
land to her son/administrator. Therein, we held that:
Under paragraph (2) of the above article, the prohibition against
agents purchasing property in their hands for sale or management
is not absolute. It does not apply if the principal consents to the
sale of the property in the hands of the agent or administrator. In
this case, the deeds of sale signed by Iluminada Abiertas shows
that she gave consent to the sale of the properties in favor of her
son, Rufo, who was the administrator of the properties. Thus, the
consent   of   the   principal   Iluminada   Abiertas   removes   the
transaction out of the prohibition contained in Article 1491(2).13
The above­quoted ruling is exactly in point with this case before
us. Petitioners, by signing the Deed of Sale in favor of respondent,
are   also   deemed  to   have   given   their   consent   to  the   sale   of   the
subject   property   in   favor   of   respondent,   thereby   making   the
transaction   an   exception   to   the   general   rule   that   agents   are
prohibited from purchasing the property of their principals.
Petitioners also argue that the CA erred in ruling that there was
consideration   for   the   sale.   We   find   no   error   in   said   appellate
court’s ruling. The element of consideration for the sale is indeed
present.   Petitioners,   in   adopting   the   trial   court’s   narration   of
antecedent   facts   in   their   petition,14 thereby   admitted   that   they
authorized respondent to represent them in negotiations with the
"squatters" occupying the disputed property and, in consideration
of respondent’s services, they executed the subject deed of sale.
Aside from such services rendered by respondent, petitioners also
acknowledged in  the  deed of  sale  that they received in full the
amount of Ten Thousand Pesos. Evidently, the consideration for
the   sale   is   respondent’s   services   plus   the   aforementioned   cash
money.
41
Petitioners contend that the consideration stated in the deed of sale
is   excessively   inadequate,   indicating   that   the   deed   of   sale   was
merely   simulated.   We   are   not   persuaded.   Our   ruling
in Buenaventura vs. Court of Appeals15 is pertinent, to wit:
. . . Indeed, there is no requirement that the price be equal to the
exact value of the subject matter of sale. . . . As we stated in Vales
vs. Villa:
Courts cannot follow one every step of his life and extricate him
from bad bargains, protect him from unwise investments, relieve
him from one­sided contracts, or annul the effects of foolish acts.
Courts cannot constitute themselves guardians of persons who are
not legally incompetent. Courts operate not because one person has
been defeated or overcome by another, but because he has been
defeated or overcome illegally. Men may do foolish things, make
ridiculous contracts, use miserable judgment, and lose money by
them – indeed, all they have in the world; but not for that alone can
the   law   intervene   and   restore.   There   must   be,   in   addition,
a violation of the law, the commission of what the law knows as
an actionable wrong, before the courts are authorized to lay hold of
the situation and remedy it.16
Verily, in the present case, petitioners have  not presented proof
that there has been fraud, mistake or  undue  influence  exercised
upon   them  by   respondent.  It   is   highly   unlikely  and  contrary  to
human experience that a layman like respondent would be able to
defraud, exert undue influence, or in any way vitiate the consent of
a lawyer like petitioner David Pelayo who is expected to be more
knowledgeable in the ways of drafting contracts and other legal
transactions.
Furthermore,   in   their   Reply   to   Respondent’s
Memorandum, petitioners adopted the CA’s narration of fact that
petitioners stated in a letter they sent to the Register of Deeds of
Tagum that they have entrusted the titles over subject lots to herein
respondent.   Such  act  is   a   clear   indication   that   they  intended  to
convey the subject property to herein respondent and the deed of
sale was not merely simulated or fictitious.
Lastly, petitioners claim that they were not able to fully ventilate
their   defense   before   the   CA   as   their   lawyer,   who   was   then
suffering from cancer  of  the liver, failed to file their  appellees’
brief. Thus, in their motion for reconsideration of the CA Decision,
they prayed that they be allowed to submit such appellees’ brief.
The CA, in its Resolution dated December 17, 1999, stated thus:
By   movant­defendant­appellee’s   own   information,   his   counsel
received a copy of the decision on May 5, 1999. He, therefore, had
fifteen (15) days from said date or up to May 20, 1999 to file the
motion. The motion, however, was sent through a private courier
and, therefore, considered to have been filed on the date of actual
receipt on June 17, 1999 by the addressee – Court of Appeals, was
filed beyond the reglementary period.
Technicality aside, movant has not proffered any ground bearing
on   the   merits   of   the   case   why   the   decision   should   be   set
aside.1awphi1
Petitioners   never   denied   the   CA   finding   that   their   motion   for
reconsideration   was   filed   beyond   the   fifteen­day   reglementary
period.   On   that   point   alone,   the   CA   is   correct   in   denying   due
course to said motion. The motion having been belatedly filed, the
CA Decision had then attained finality. Thus, in Abalos vs. Philex
Mining Corporation,18 we held that:
.   .  .   Nothing   is  more   settled   in  law   than   that   once   a   judgment
attains finality it thereby becomes immutable and unalterable. It
may no longer be modified in any respect, even if the modification
is meant to correct what is perceived to be an erroneous conclusion
of   fact   or   law,   and   regardless   of   whether   the   modification   is
attempted to be made by the court rendering it or by the highest
court of the land.
Moreover, it is pointed out by the CA that said motion did not
present any defense  or  argument on the  merits  of  the  case  that
could have convinced the CA to reverse or modify its Decision.
We have consistently held that a petitioner’s right to due process is
not violated where he was able to move for reconsideration of the
order   or   decision   in   question.19 In   this   case,   petitioners   had   the
opportunity to fully expound on their defenses through a motion
for   reconsideration.   Petitioners   did   file   such   motion   but   they
wasted   such   opportunity   by   failing   to   present   therein   whatever
errors   they   believed   the   CA   had   committed   in   its   Decision.
Definitely,   therefore,   the   denial   of   petitioners’   motion   for
reconsideration,   praying   that   they   be   allowed   to   file   appellees’
brief, did not infringe petitioners’ right to due process as any issue
that   petitioners   wanted   to   raise   could   and   should   have   been
contained in said motion for reconsideration.
IN VIEW OF THE FOREGOING, the petition is DENIED and
the Decision of the Court of Appeals dated April 20, 1999 and its
Resolution dated December 17, 1999 are hereby AFFIRMED.
SO ORDERED.
MA. ALICIA AUSTRIA­MARTINEZ
Associate Justice
42
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 170166               April 6, 2011
JOE A. ROS and ESTRELLA AGUETE, Petitioners,
vs.
PHILIPPINE NATIONAL BANK ­ LAOAG 
BRANCH, Respondent.
D E C I S I O N
CARPIO, J.:
The Case
G.R.   No.   170166   is   a   petition   for   review 1 assailing   the
Decision2 promulgated   on   17   October   2005   by   the   Court   of
Appeals   (appellate   court)   in   CA­G.R.   CV   No.   76845.   The
appellate court granted the appeal filed by the Philippine National
Bank – Laoag Branch (PNB). The appellate court reversed the 29
June 2001 Decision of Branch 15 of the Regional Trial Court of
Laoag City (trial court) in Civil Case No. 7803.
The trial court declared the Deed of Real Estate Mortgage executed
by   spouses   Jose   A.   Ros3 (Ros)   and   Estrella   Aguete   (Aguete)
(collectively,   petitioners),   as   well   as   the   subsequent   foreclosure
proceedings, void. Aside from payment of attorney’s fees, the trial
court also ordered PNB to vacate the subject property to give way
to petitioners’ possession.
The Facts
The appellate court narrated the facts as follows:
On January 13, 1983, spouses Jose  A. Ros and Estrella  Aguete
filed a complaint for the annulment of the Real Estate Mortgage
and   all   legal   proceedings   taken   thereunder   against   PNB,   Laoag
Branch before the Court of First Instance, Ilocos Norte docketed as
Civil Case No. 7803.
The complaint was later amended and was raffled to the Regional
Trial Court, Branch 15, Laoag City.
The  averments in  the  complaint  disclosed that  plaintiff­appellee
Joe   A.   Ros   obtained   a   loan   of  ₱115,000.00   from   PNB   Laoag
Branch on October 14, 1974 and as security for the loan, plaintiff­
appellee Ros executed a real estate mortgage involving a parcel of
land – Lot No. 9161 of the Cadastral Survey of Laoag, with all the
improvements thereon described under Transfer Certificate of Title
No. T­9646.
Upon maturity, the loan remained outstanding. As a result, PNB
instituted extrajudicial foreclosure proceedings on the mortgaged
property. After the extrajudicial sale thereof, a Certificate of Sale
was issued in favor of PNB, Laoag as the highest bidder. After the
lapse  of  one  (1)  year  without the  property being redeemed, the
property   was   consolidated   and   registered   in   the   name   of   PNB,
Laoag Branch on August 10, 1978.
Claiming   that   she   (plaintiff­appellee   Estrella   Aguete)   has   no
knowledge of the loan obtained by her husband nor she consented
to the mortgage instituted on the conjugal property – a complaint
was filed to annul the proceedings pertaining to the mortgage, sale
and consolidation of the property – interposing the defense that her
signatures affixed on the documents were forged and that the loan
did not redound to the benefit of the family.1avvphi1
In its answer, PNB prays for the dismissal of the complaint for lack
of cause of action, and insists that it was plaintiffs­appellees’ own
acts [of]
omission/connivance   that   bar   them   from   recovering   the   subject
property   on   the   ground   of   estoppel,   laches,   abandonment   and
prescription.4]
The Trial Court’s Ruling
On 29 June 2001, the trial court rendered its Decision 5 in favor of
petitioners. The trial court declared that Aguete did not sign the
loan   documents,   did   not   appear   before   the   Notary   Public   to
acknowledge the execution of the loan documents, did not receive
the loan proceeds from PNB, and was not aware of the loan until
PNB notified her in 14 August 1978 that she and her family should
vacate   the   mortgaged   property   because   of   the   expiration   of   the
redemption period. Under the Civil Code, the effective law at the
time of the transaction, Ros could not encumber any real property
of the conjugal partnership without Aguete’s consent. Aguete may,
during  their   marriage   and  within  ten  years from the   transaction
questioned, ask the courts for the annulment of the contract her
husband entered into without her consent, especially in the present
case where her consent is required. The trial court, however, ruled
that its decision is without prejudice to the right of action of PNB
to recover the amount of the loan and its interests from Ros.
The dispositive portion reads:
WHEREFORE, premises considered, judgment is hereby rendered:
1.   DECLARING   the   Deed   of   Real   Estate   Mortgage
(Exhibit   "C")   and   the   subsequent   foreclosure
proceedings conducted thereon NULL and VOID;
2. ORDERING  the  Register  of  Deeds of  the  City  of
Laoag   to   cancel   TCT   No.   T­15276   in   the   name   of
defendant   PNB   and   revert   the   same   in   the   name   of
plaintiffs spouses Joe Ros and Estrella Aguete;
3.  ORDERING   defendant  to  vacate  and  turnover  the
possession of the premises of the property in suit to the
plaintiffs; and
4.   ORDERING   defendant  to   pay  plaintiffs   attorney’s
fee   and   litigation   expenses   in   the   sum   of   TEN
THOUSAND (₱10,000.00) PESOS.
No pronouncement as to costs.
SO ORDERED. 6]
PNB filed its Notice of Appeal  of the trial court’s decision on 13
7
September 2001 and paid the corresponding fees. Petitioners filed
on the same date a motion for execution pending appeal, 8 which
PNB  opposed.9 In  their  comment to  the  opposition10 filed on  10
October 2001, petitioners stated that at the hearing of the motion
on 3 October 2001, PNB’s lay representative had no objection to
the execution of judgment pending appeal. Petitioners claimed that
the  house on the  subject lot is dilapidated, a danger  to life  and
limb,   and   should   be   demolished.   Petitioners   added   that   they
obliged themselves to make the house habitable at a cost of not less
₱50,000.00. The repair cost would accrue to PNB’s benefit should
the appellate court reverse the trial court. PNB continued to oppose
petitioners’ motion.11
In an Order12 dated 8 May 2002, the trial court found petitioners’
motion for execution pending appeal improper because petitioners
have made it clear that they were willing to wait for the appellate
court’s decision. However, as a court of justice and equity, the trial
court allowed petitioners to occupy the subject property with the
condition   that   petitioners   would  voluntarily   vacate   the   premises
and   waive   recovery   of   improvements   introduced   should   PNB
prevail on appeal.
The Appellate Court’s Ruling
On   17   October   2005,   the   appellate   court   rendered   its
Decision13 and granted PNB’s appeal. The appellate court reversed
the trial court’s decision, and dismissed petitioners’ complaint.
The appellate court stated that the trial court concluded forgery
without adequate proof; thus it was improper for the trial court to
43
rely solely on Aguete’s testimony that her signatures on the loan
documents were forged. The appellate court declared that Aguete
affixed her signatures on the documents knowingly and with her
full consent.
Assuming arguendo that Aguete did not give her consent to Ros’
loan, the appellate court ruled that the conjugal partnership is still
liable because the loan proceeds redounded to the benefit of the
family. The records of the case reveal that the loan was used for
the   expansion   of   the   family’s   business.   Therefore,   the   debt
obtained is chargeable against the conjugal partnership.
Petitioners filed the present petition for review before this Court on
9 December 2005.
The Issues
Petitioners assigned the following errors:
I. The Honorable Court of Appeals erred in not giving weight to
the findings and conclusions of the trial court, and in reversing and
setting aside such findings and conclusions without stating specific
contrary evidence;
II.  The  Honorable   Court  of   Appeals   erred  in  declaring  the   real
estate mortgage valid;
III. The Honorable Court of Appeals erred in declaring, without
basis,   that   the   loan   contracted   by   husband   Joe   A.   Ros   with
respondent  Philippine  National  Bank  –  Laoag  redounded  to  the
benefit of his family, aside from the fact that such had not been
raised by respondent in its appeal.14]
The Court’s Ruling
The petition has no merit. We affirm the ruling of the appellate
court.
The Civil Code was the applicable law at the time of the mortgage.
The   subject   property   is   thus   considered   part   of   the   conjugal
partnership   of   gains.   The   pertinent   articles   of   the   Civil   Code
provide:
Art. 153. The following are conjugal partnership property:
(1) That which is acquired by onerous title during the
marriage at the expense of the common fund, whether
the acquisition be for the partnership, or for only one of
the spouses;
(2) That which is obtained by the industry, or work or
as salary of the spouses, or of either of them;
 (3) The fruits, rents or interest received or due during
the   marriage,   coming   from   the   common   property   or
from the exclusive property of each spouse.
Art. 160. All property of the marriage is presumed to belong to the
conjugal partnership, unless it be proved that it pertains exclusively
to the husband or to the wife.
Art. 161. The conjugal partnership shall be liable for:
(1) All debts and obligations contracted by the husband
for the  benefit of  the conjugal partnership, and those
contracted by the wife, also for the same purpose, in the
cases where she may legally bind the partnership;
(2) Arrears or income due, during the marriage, from
obligations which constitute a charge upon property of
either spouse or of the partnership;
(3) Minor repairs or for mere preservation made during
the  marriage  upon the  separate  property of either  the
husband or the wife; major repairs shall not be charged
to the partnership;
(4)   Major   or   minor   repairs   upon   the   conjugal
partnership property;
(5) The maintenance of the family and the education of
the children of both husband and wife, and of legitimate
children of one of the spouses;
(6)   Expenses   to   permit   the   spouses   to   complete   a
professional, vocational or other course.
Art.   166.   Unless   the   wife   has   been   declared   a non   compos
mentis or a spendthrift, or is under civil interdiction or is confined
in a leprosarium, the husband cannot alienate or encumber any real
property of the conjugal partnership without the wife’s consent. If
she   refuses   unreasonably   to   give   her   consent,   the   court   may
compel her to grant the same.
Art. 173. The wife may, during the marriage, and within ten years
from the transaction questioned, ask the courts for the annulment
of any contract of the husband entered into without her consent,
when   such   consent   is   required,   or   any   act   or   contract   of   the
husband which tends to defraud her or impair her interest in the
conjugal partnership property. Should the wife fail to exercise this
right, she or her heirs after the dissolution of the marriage may
demand   the   value   of   the   property   fraudulently   alienated   by   the
husband.
There is no doubt that the subject property was acquired during
Ros and Aguete’s marriage. Ros and Aguete were married on 16
January   1954,   while   the   subject   property   was   acquired   in
1968.15 There  is also no doubt that Ros  encumbered the  subject
property   when   he   mortgaged  it   for   P115,000.00   on   23  October
1974.16 PNB Laoag does not doubt that Aguete, as evidenced by
her signature, consented to Ros’ mortgage to PNB of the subject
property. On the other hand, Aguete denies ever having consented
to the loan and also denies affixing her signature to the mortgage
and loan documents.
The   husband   cannot   alienate   or   encumber   any   conjugal   real
property   without   the   consent,   express   or   implied,   of   the   wife.
Should the husband do so, then the contract is voidable. 17 Article
173   of   the   Civil   Code   allows   Aguete   to   question   Ros’
encumbrance of the subject property. However, the same article
does not guarantee that the courts will declare the annulment of the
contract. Annulment will be declared only upon a finding that the
wife did not give her consent. In the present case, we follow the
conclusion of the  appellate  court and rule  that Aguete  gave  her
consent to Ros’ encumbrance of the subject property.
The documents disavowed by Aguete are acknowledged before a
notary public, hence they are public documents. Every instrument
duly   acknowledged   and   certified   as   provided   by   law   may   be
presented   in   evidence   without   further   proof,   the   certificate   of
acknowledgment  being prima  facie evidence   of  the   execution   of
the   instrument   or   document   involved.18 The   execution   of   a
document that has been ratified before a notary public cannot be
disproved   by   the   mere   denial   of   the   alleged   signer. 19 PNB   was
correct when it stated that petitioners’ omission to present other
positive evidence to substantiate their claim of forgery was fatal to
petitioners’ cause.20 Petitioners did not present any corroborating
witness, such as a handwriting expert, who could authoritatively
declare that Aguete’s signatures were really forged.
A   notarized   document   carries   the   evidentiary   weight   conferred
upon it with respect to its due execution, and it has in its favor the
presumption of regularity which may only be rebutted by evidence
so clear, strong and convincing as to exclude all controversy as to
the falsity of the certificate. Absent such, the presumption must be
upheld. The burden of proof to overcome the presumption of due
execution of  a notarial document lies on the one contesting the
same. Furthermore,  an  allegation  of   forgery  must  be   proved  by
clear   and   convincing   evidence,   and   whoever   alleges   it   has   the
burden of proving the same.21]
Ros himself cannot bring action against PNB, for no one can come
before   the   courts   with   unclean   hands.1avvphi1 In   their
44
memorandum   before   the   trial   court,   petitioners   themselves
admitted that Ros forged Aguete’s signatures.
Joe   A.   Ros   in   legal   effect   admitted   in   the   complaint   that   the
signatures   of   his   wife   in   the   questioned   documents   are   forged,
incriminating   himself   to   criminal   prosecution.   If   he   were   alive
today, he would be prosecuted for forgery. This strengthens the
testimony   of   his   wife   that   her   signatures   on   the   questioned
documents are not hers.
In filing the complaint, it must have been a remorse of conscience
for having wronged his family; in forging the signature of his wife
on the questioned documents; in squandering the P115,000.00 loan
from   the   bank   for   himself,   resulting   in   the   foreclosure   of   the
conjugal property; eviction of his family therefrom; and, exposure
to public contempt, embarassment and ridicule.22]
The   application   for   loan   shows   that   the   loan   would   be   used
exclusively "for additional working [capital] of buy & sell of garlic
& virginia tobacco."23 In her testimony, Aguete confirmed that Ros
engaged in such business, but claimed to be unaware whether it
prospered. Aguete was also aware of loans contracted by Ros, but
did not know where he "wasted the money." 24 Debts contracted by
the husband for and in the exercise of the industry or profession by
which he contributes to the support of the family cannot be deemed
to be his exclusive and private debts.25
If   the   husband   himself   is   the   principal   obligor   in   the
contract, i.e., he   directly   received   the   money   and   services   to   be
used in or for his own business or his own profession, that contract
falls within the term "x x x x obligations for the benefit of the
conjugal partnership." Here, no actual benefit may be proved. It is
enough that the benefit to the family is apparent at the signing of
the   contract.   From   the   very   nature   of   the   contract   of   loan   or
services,   the   family   stands   to   benefit   from   the   loan   facility   or
services   to   be   rendered   to   the   business   or   profession   of   the
husband. It is immaterial, if in the end, his business or profession
fails   or   does   not   succeed.   Simply   stated,   where   the   husband
contracts   obligations   on   behalf   of   the   family   business,   the   law
presumes, and rightly so, that such obligation will redound to the
benefit of the conjugal partnership.26]
For this reason, we rule that Ros’ loan from PNB redounded to the
benefit of the conjugal partnership. Hence, the debt is chargeable
to the conjugal partnership.
WHEREFORE,   we DENY the   petition.   The   Decision   of   the
Court of Appeals in CA­G.R. CV No. 76845 promulgated on 17
October 2005 is AFFIRMED. Costs against petitioners.
SO ORDERED. in said court against the respondents. The CA Resolution denied
the petitioners’ motion for reconsideration.
ANTONIO T. CARPIO
Associate Justice
The subject matter of the action is a parcel of land with an area of
520.50 square meters situated in Diliman, Quezon City, described
as Lot 15, Block 89 of the subdivision plan Psd­68807, covered by
Transfer Certificate of Title (TCT) No. 107534 4 issued on May 23,
1966 and registered in the name of Domingo B. Hernandez, Sr.
married to Sergia V. Hernandez. Later on, said TCT No. 107534
was cancelled and in lieu thereof, TCT No. 290121 5 was issued in
favor of Melanie Mingoa.
These are the factual antecedents of this case:
On February 11, 1994, a complaint6 was filed with  the  RTC  of
Quezon City by herein petitioners, heirs of Domingo Hernandez,
Sr., namely, spouse Sergia Hernandez and their surviving children
Domingo, Jr. and Maria Leonora Wilma, against the respondents
herein, Dolores Camisura, Melanie Mingoa, Atty. Plaridel Mingoa,
Republic of the Philippines Sr. and all persons claiming rights under the latter, and the Quezon
SUPREME COURT City Register of Deeds. The case was docketed as Civil Case No.
Manila 094­19276.
FIRST DIVISION In   their   complaint,   the   petitioners   asked   for   (a)   the   annulment
and/or declaration of nullity of TCT No. 290121 including all its
G.R. No. 146548               December 18, 2009
derivative titles, the Irrevocable Special Power of Attorney (SPA)
dated February 14, 1963 in favor of Dolores Camisura, 7 the SPA
HEIRS OF DOMINGO HERNANDEZ, SR., namely: SERGIA dated May 9, 1964 in favor of Plaridel Mingoa, Sr., 8 and the Deed
V.   HERNANDEZ   (Surviving   Spouse),   DOMINGO   V. of Absolute Sale of Real Estate 9 dated July 9, 1978 executed by
HERNANDEZ,   JR.,   and   MARIA   LEONORA   WILMA Plaridel   Mingoa,   Sr.   in   favor   of   Melanie   Mingoa   for   being
HERNANDEZ, Petitioners, products   of   forgery   and   falsification;   and   (b)   the   reconveyance
vs. and/or issuance to them (petitioners) by the Quezon City Register
PLARIDEL   MINGOA,   SR.,   DOLORES   CAMISURA, of Deeds of the certificate of title covering the subject property.
MELANIE MINGOA AND QUEZON CITY REGISTER OF Respondents filed a Motion to Dismiss 10 the complaint interposing
DEEDS,1 Respondents. the following grounds: the claim or demand has been paid, waived,
abandoned or otherwise extinguished; lack of cause of action; lack
of jurisdiction over the person of the defendants or over the subject
D E C I S I O N
or nature of the suit; and prescription. The following were attached
to said motion: a Deed of Transfer of Rights 11 dated February 14,
LEONARDO­DE CASTRO, J.:
1963 from Domingo Hernandez, Sr. to Camisura, the Irrevocable
SPA12 executed by the former in the latter’s favor, and a Deed of
This is a petition for review on certiorari of the Decision2 dated Sale   of   Right   in   a   Residential   Land   and   Improvements
September 7, 2000 and Resolution3 dated December 29, 2000, both Therein13 dated  May  9,  1964  executed  by  Camisura   in  favor  of
of the Court of Appeals (CA), in CA­G.R. CV No. 54896. The CA Plaridel Mingoa, Sr.
Decision reversed and set aside the decision of the Regional Trial
In   its   Order14 dated   September   1,   1994,   the   trial   court   denied
Court (RTC) of Quezon City (Branch 92), which ruled in favor of
respondents’ motion to dismiss.
herein petitioners in the action for reconveyance filed by the latter
45
Respondents filed a petition for certiorari and prohibition with the
CA   assailing   the   aforementioned   Order   of   denial   by   the   RTC.
Their initial petition was dismissed for being insufficient in form.
Respondents  then  re­filed  their   petition,  which  was  docketed as
CA­G.R.   SP   No.   36868.   In   a   decision15 dated   May   26,   1995,
respondents’ re­filed petition was denied due course by the CA.
Having been filed beyond the reglementary period, respondents’
subsequent motion for reconsideration was simply noted by the CA
in its Resolution of July 7, 1995. On the basis of a technicality, this
Court,   in   a   Resolution   dated   September   27,   1995,   dismissed
respondents' appeal which was docketed as G.R. No. 121020. Per
Entry of Judgment,16 said Resolution became final and executory
on January 2, 1996.
Meanwhile,   respondents   filed   their   Answer17 in   the   main   case
therein denying the allegations of the complaint and averring as
defenses the same grounds upon which they anchored their earlier
motion to dismiss.
The parties having failed to amicably settle during the scheduled
pre­trial conference, the case proceeded to trial.
The evidence respectively presented by the parties is summarized
as follows:18
x   x   x   [It]   appears   that   in   the   early   part   of   1958,   Domingo
Hernandez, Sr. (who was then a Central Bank employee) and his
spouse Sergia V. Hernandez were awarded a piece of real property
by the Philippine Homesite and Housing Corporation (PHHC) by
way of salary deduction. On October 18, 1963, the [petitioners]
then having paid in full the entire amount of P6,888.96, a Deed of
Absolute Sale of the property was executed by the PHHC in their
favor. TCT No. 107534, covering the property was issued to the
[petitioners]   on   May   23,   1966.   It   bears   an   annotation   of   the
retention period of the property by the awardee (i.e., restriction of
any unauthorized sale to third persons within a certain period). Tax
payments due on the property were religiously paid (until 1955) by
the [petitioners] as evidenced by receipts under the [petitioners’]
name.
Hernandez, Sr. died intestate in April 1983 and it was only after his
burial that his heirs found out that TCT No. 107534 was already
cancelled a year before (in 1982), and in lieu thereof, TCT No.
290121   was   issued   to   the   [respondents].   Upon   diligent   inquiry,
[petitioners]   came   to   know   that   the   cancellation   of   TCT   (No.
107534) in favor of the [respondents’] xxx TCT (No. 290121) was
based upon three sets of documents, namely, (1) Irrevocable Power
of Attorney; (2) Irrevocable Special Power of Attorney; and (3)
Deed of Absolute Sale.
[Petitioners] also allege that because of financial difficulties, they
were   only   able   to   file   a   complaint   on   February   11,   1995   after
consulting with several lawyers.
x x x x
[Respondents] xxx on the other hand do not deny that Hernandez,
Sr. was indeed awarded a piece  of real property by the PHHC.
According to the [respondents] xxx, Hernandez, Sr. was awarded
by   the   PHHC   the   Right   to   Purchase   the   property   in   question;
however, the late Hernandez, Sr. failed to pay all the installments
due on the said property. Thus, afraid that he would forfeit his right
to purchase the property awarded to him, Hernandez, Sr. sold to
Dolores Camisura his rights for the sum of P6,500.00 on February
14, 1963, through a deed of transfer of rights, seemingly a printed
form from the PHHC. Simultaneous to this, Hernandez, Sr. and his
spouse   executed   an   irrevocable   special   power   of   attorney,
appointing Dolores Camisura as their attorney­in­fact with express
power   to   sign,   execute   and   acknowledge   any   contract   of
disposition,   alienation   and   conveyance   of   her   right   over   the
aforesaid parcel of land.
Apparently, this special power of attorney was executed for the
purpose of securing her right to transfer  the  property to a third
person considering that there was a prohibition to dispose of the
property by the original purchaser within one (1) year from full
payment. Else wise stated, the irrevocable power of attorney was
necessary in order to enable the buyer, Dolores Camisura, to sell
the lot to another, Plaridel Mingoa, without the need of requiring
Hernandez, to sign a deed of conveyance.
On May 9, 1964, Dolores Camisura sold her right over the said
property to Plaridel Mingoa for P7,000.00. Camisura then executed
a similar irrevocable power of attorney and a deed of sale of right
in a residential land and improvements therein in favor of Plaridel
Mingoa.   Upon   such   payment   and   on   the   strength   of   the   said
irrevocable power of attorney, Plaridel Mingoa took possession of
the said property and began paying all the installments due on the
property   to   PHHC.   Plaridel   Mingoa   further   secured   TCT   No.
107534 (issued in the name of Domingo Hernandez, Sr.) on May,
1966. On July 9, 1978, Plaridel Mingoa sold to his eldest child,
Melanie Mingoa, the property in question for P18,000.00. TCT No.
107534 was thus cancelled and TCT No. 290121 was issued in the
name of Melanie Mingoa. It is further claimed that since 1966 until
1982, Plaridel Mingoa religiously paid all the taxes due on the said
property; and that from 1983 up to the present, Melanie Mingoa
paid all the property taxes due thereon aside from having actual
possession of the said property. (words in brackets ours)
On May 9, 1996, the RTC rendered a decision 19 in favor of the
petitioners, with the following dispositive portion:
WHEREFORE, premises considered, judgment is hereby rendered
in favor of the plaintiffs as follows:
1) TCT No. 290121 and all its derivative titles are hereby
declared null and void;
2) Ordering the Register of Deeds of Quezon City to cancel
TCT No. 290121 issued in the name of defendant Melanie
Mingoa and corresponding owner’s duplicate certificate and
all its derivative title[s];
3) Ordering defendant Melanie  Mingoa  and all derivative
owners   to   surrender   owner’s   duplicate   copies   of   transfer
certificate of title to the Register of Deeds of Quezon City
for cancellation upon finality of this decision;
4) Ordering the defendants except the Register of Deeds of
Quezon   City   to   turn   over   to   the   plaintiffs   the   peaceful
possession of the subject property; and
5) Ordering the defendants except the Register of Deeds of
Quezon City to jointly and severally (sic) pay the plaintiffs
the sum of P10,000.00 as attorney’s [fees] and to pay the
costs of suit.
SO ORDERED.
In   ruling   in   favor   of   petitioners,   the   trial   court   reasoned   as
follows:20
The two (2) parties in the case at bar gave out conflicting versions
as to who paid for the subject property. The plaintiffs claim that
they were the ones who paid the entire amount out of the conjugal
funds while it is the contention of the defendant Mingoa that the
former were not able to pay. The defendant alleged that the right to
purchase   was   sold   to   him   and   he   was   able   to   pay   the   whole
amount. The  Court is of the  opinion that petitioners’ version is
more credible taken together with the presence of the irrevocable
power   of   attorney   which   both   parties   admitted.   In   light   of   the
version of the defendants, it is highly improbable that a Power of
46
Attorney   would   be   constituted   by   the   plaintiffs   authorizing   the
former to sell the subject property. This is because for all intents
and purposes, the land is already the defendants’ for if we are to
follow their claim, they paid for the full amount of the same. It can
be   safely   concluded   then   that   the   Power   of   Attorney   was
unnecessary   because   the   defendants,   as   buyers,   can   compel   the
plaintiff­sellers to execute the transfer of the said property after the
period of prohibition has lapsed. The defendants, as owners, will
have the right to do whatever they want with the land even without
an   Irrevocable   Power   of   Attorney.   Since   the   presence   of   the
Irrevocable Power of Attorney is established, it is now the task of
this Court to determine the validity of the sale made by virtue of
the said Power of Attorney. As what was said earlier, the Court
subscribes   to   the   points   raised   by   the   plaintiffs.   It   was   proved
during trial that the signature of the wife was falsified. Therefore,
it is as if the wife never authorized the agent to sell her share of the
subject land, it being conjugal property. It follows that the sale of
half of the land is invalid. However, it must be pointed out that the
signature   of   the   deceased   husband   was   never   contested   and   is
therefore   deemed   admitted.   We   now   come   to   the   half   which
belongs   to   the   deceased   husband.   The   Law   on   Sales   expressly
prohibits the agent from purchasing the property of the principal
without the latter’s consent (Article 1491 of the Civil Code). It was
established from the records that defendant Plaridel Mingoa sold
the subject land to his daughter Melanie. It is now for the Court to
decide whether this transaction is valid. x x x Considering that the
sale took place in July 1978, it follows from simple mathematical
computation that Melanie was then a minor (20 years of age) when
she allegedly bought the property from her father. Since Melanie’s
father is the sub­agent of the deceased principal, he is prohibited
by law from purchasing the land without the latter’s consent. This
being   the   case,   the   sale   is   invalid   for   it   appears   that   Plaridel
Mingoa   sold   the   land   to   himself.   It   should   be   noted   that   the
defendants could have easily presented Melanie’s birth certificate,
it being at their disposal, but they chose not to. Because of this, this
Court is of the belief that the presumption that evidence willfully
suppressed would be adverse if produced arises.
The trial court denied respondents’ motion for reconsideration of
the aforementioned decision in its Order21 of August 22, 1996.
Aggrieved, the respondents appealed to the CA, where their case
was   docketed   as   CA­G.R.   CV   No.   54896.   Holding   that   the
petitioners   were   barred   by   prescription   and   laches   to   take   any
action   against   the   respondents,   the   CA,   in   its   herein   assailed
Decision22 dated   September   7,   2000,   reversed   and   set   aside   the
appealed decision, thereby dismissing the complaint filed by the
petitioners before the trial court. In full, the disposition reads:
WHEREFORE, in view of the foregoing, the Decision of the RTC
Branch 92, Quezon City, in Civil Case No. Q­94­19276, entitled,
"Heirs of Domingo Hernandez, Sr. vs. Dolores Camisura, et. al.,"
is hereby REVERSED AND SET ASIDE. A new one is hereby
entered,   DISMISSING   the   complaint   in   Civil   Case   No.   Q­94­
19276   entitled,   "Heirs   of   Domingo   Hernandez,   Sr.   vs.   Dolores
Camisura, et. al.," filed by the plaintiffs­appellees before the RTC
Branch 92, Quezon City for lack of merit.
SO ORDERED.
Petitioners’ subsequent motion for reconsideration was denied by
the CA in its impugned Resolution23 dated December 29, 2000.
Hence,   petitioners   are   now   before   this   Court   via   the   present
recourse. The ten (10) assigned errors set forth in the petition all
boil down to the essential issue of whether the title of the subject
property in the name of respondent Melanie Mingoa may still be
reconveyed to the petitioners. As we see it, the resolution thereof
hinges  on  these  two  pivotal   questions:  (1)  whether  there  was  a
valid alienation involving the subject property; and (2) whether the
action   impugning   the   validity   of   such   alienation   has   prescribed
and/or was barred by laches.
The Court shall deal first with the procedural issues raised by the
respondents in their Comment.24
We held in Vera­Cruz v. Calderon25 that:
As a general rule, only questions of law may be raised in a petition
for review on certiorari to the Supreme Court. Although it has long
been settled that findings of fact are conclusive upon this Court,
there   are   exceptional   circumstances   which   would   require   us   to
review findings of fact of the Court of Appeals, to wit:
(1) the conclusion is a finding grounded entirely on speculation,
surmise   and   conjectures;   (2)   the   inference   made   is   manifestly
mistaken; (3) there is grave abuse of discretion; (4) the judgment is
based   on  misapprehension   of   facts;   (5)   the   findings   of   fact  are
conflicting; (6) the Court of Appeals went beyond the issues of the
case   and   its   findings   are   contrary   to   the   admissions   of   both
appellant and appellees; (7) the findings of fact of the Court of
Appeals are contrary to those of the trial court; (8) said findings of
fact are conclusions without citation of specific evidence on which
they are based; (9) the facts set forth in the decision as well as in
the   petitioner’s   main   and   reply   briefs   are   not   disputed   by   the
respondents; (10) the finding of fact of the Court of Appeals is
premised on the supposed absence of evidence and is contradicted
by evidence on record. (emphasis ours)
The petition before us raises factual issues which are not proper in
a   petition   for   review   under   Rule   45   of   the   Rules   of   Court.
However,   we   find   that   one   of   the   exceptional   circumstances
qualifying a factual review by the Court exists, that is, the factual
findings of the CA are at variance with those of the trial court. We
shall then give due course to the instant petition and review the
factual findings of the CA.
Even   if   only   petitioner   Domingo   Hernandez,   Jr.   executed   the
Verification/Certification26 against   forum­shopping,   this   will   not
deter   us from proceeding with  the  judicial  determination  of   the
issues  in   this  petition.   As  we   ratiocinated  in Heirs  of   Olarte   v.
Office of the President:27
The general rule is that the certificate of non­forum shopping must
be signed by all the plaintiffs in a case and the signature of only
one of them is insufficient. However, the Court has also stressed
that the rules on forum shopping were designed to promote and
facilitate the orderly administration of justice and thus should not
be interpreted with such absolute literalness as to subvert its own
ultimate   and   legitimate   objective.   The   rule   of   substantial
compliance may be availed of with respect to the contents of the
certification. This is because the requirement of strict compliance
with   the   provisions   regarding   the   certification   of   non­forum
shopping   merely   underscores   its   mandatory   nature   in   that   the
certification   cannot   be   altogether   dispensed   with   or   its
requirements   completely   disregarded.   Thus,   under   justifiable
circumstances,   the   Court   has   relaxed   the   rule   requiring   the
submission   of   such   certification   considering   that   although   it   is
obligatory, it is not jurisdictional.
In   HLC   Construction   and   Development   Corporation   v.   Emily
Homes Subdivision Homeowners Association, it was held that the
signature of only one of the petitioners in the certification against
forum shopping substantially complied with rules because all the
petitioners share a common interest and invoke a common cause of
action or defense.
The same leniency was applied by the Court in Cavile v. Heirs of
Cavile, because the lone petitioner who executed the certification
of non­forum shopping was a relative and co­owner of the other
petitioners with whom he shares a common interest. x x x
In the instant case, petitioners share a common interest and defense
inasmuch as they collectively claim a right not to be dispossessed
of  the  subject lot  by virtue  of  their  and their  deceased parents’
construction  of  a  family  home  and occupation thereof  for  more
than  10 years. The  commonality  of  their  stance   to defend  their
alleged right over the controverted lot thus gave petitioners xxx
47
authority to inform the Court of  Appeals in behalf  of  the other
petitioners   that   they   have   not   commenced   any   action   or   claim
involving the  same  issues in another  court  or  tribunal, and that
there   is   no   other   pending   action   or   claim   in   another   court   or
tribunal involving the same issues. x x x
Here,   all   the   petitioners   are   immediate   relatives   who   share   a
common   interest   in   the   land   sought   to   be   reconveyed   and   a
common cause  of  action raising  the  same  arguments in support
thereof.   There   was   sufficient   basis,   therefore,   for   Domingo
Hernandez, Jr. to speak for and in behalf of his co­petitioners when
he certified that they had not filed any action or claim in another
court   or   tribunal   involving   the   same   issues.   Thus,   the
Verification/Certification that Hernandez, Jr. executed constitutes
substantial compliance under the Rules.
Anent the contention that the petition erroneously impleaded the
CA as respondent in contravention of Section 4(a) 28 of Rule 45 of
the 1997 Rules of Civil Procedure, we shall apply our ruling in
Simon v. Canlas,29 wherein we held that:
x x x [The] Court agrees that the correct procedure, as mandated
by Section 4, Rule 45 of the 1997 Rules of Civil Procedure, is not
to implead the lower court which rendered the assailed decision.
However, impleading the lower court as respondent in the petition
for review on certiorari does not automatically mean the dismissal
of the appeal but merely authorizes the dismissal of the petition.
Besides, formal defects in petitions are not uncommon. The Court
has   encountered   previous   petitions   for   review   on   certiorari   that
erroneously impleaded the CA. In those cases, the Court merely
called  the  petitioners’  attention  to   the  defects  and  proceeded  to
resolve the case on their merits.
The Court finds no reason why it should not afford the same liberal
treatment  in   this  case.  While  unquestionably,  the   Court  has  the
discretion to dismiss the appeal for being defective, sound policy
dictates that it is far better to dispose of cases on the merits, rather
than on technicality as the latter approach may result in injustice.
This is in accordance with Section 6, Rule 1 of the 1997 Rules of
Civil   Procedure   which   encourages   a   reading   of   the   procedural
requirements   in   a   manner   that   will   help   secure   and   not   defeat
justice.
We now come to the substantive issues.
As correctly found by the appellate court, the following facts are
undisputed:30
 1.   Domingo   Hernandez,  Sr.   was   awarded  a   piece   of   real
property in 1958 by the PHHC as part of the government’s
housing program at the time. Title over the said property
was issued in 1966 in the name of Hernandez, Sr., after full
payment for the property was received by the PHHC.
2. Neither [petitioners] nor Hernandez, Sr., took possession
of the said property. On the other hand, the [respondents]
took   possession   of   the   said   property   in   1966   and   are   in
actual and physical possession thereof up to the present, and
have made considerable improvements thereon, including a
residential house where they presently reside.
3.   The   Owner’s   Duplicate   Copy   of   the   title   over   the
property given by the PHHC to Hernandez, Sr. was in the
possession   of   Plaridel   Mingoa,   the   latter   being   able   to
facilitate the cancellation of the said title and [the issuance
of] a new TCT xxx in the name of Melanie Mingoa.
4. The realty taxes have been paid by [respondents], albeit
in the name of Hernandez, Sr., but all official receipts of tax
payments are kept by the [respondents].
5. From 1966 (the time when the [respondents] were able to
possess   the   property)   to   1983   (the   time   when   the
[petitioners]  had knowledge that the TCT in the name  of
Hernandez, Sr. had already been cancelled by the Registry
of Deeds of Quezon City) covers almost a span of 17 years;
and from 1983 to 1995 (the time when the Heirs filed the
original action) is a period of another 12 years.
The SPA31 in favor of Dolores Camisura pertinently states that the
latter is the lawful attorney­in­fact of Domingo B. Hernandez, Sr.,
married to Sergia Hernandez, to do and perform, among others, the
following acts and deeds:
1.   To   sign,   execute   and   acknowledge   all   such   contracts,
deeds or other instruments which may be required by the
People’s Homesite and Housing Corporation with respect to
the   purchase   of   that   certain   parcel   of   land   known   and
designated as Lot No. 15 Block E­89 of the Malaya Avenue
Subdivision, situated in Quezon City and containing an area
of 520 square meters, more or less, which I have acquired
thru   the   CENTRAL   BANK   STAFF   HOUSING
CORPORATION;
2. To sign, execute and acknowledge all such contracts or
other instruments which may deem necessary or be required
to sign, execute and acknowledge for the purpose of selling,
transferring, conveying, disposing of or alienating whatever
rights I may have over that parcel of land mentioned above;
x x x.
The Deed of Transfer of Rights,32 also executed by Hernandez, Sr.
in   Camisura’s   favor,   expressly   states   that   the   former,   in
consideration of the amount of ₱6,500.00, transfers his rights over
the   subject   property   to   the   latter.   Notably,   such   deed   was
simultaneously executed with the SPA on February 14, 1963.
From the foregoing, the Court cannot but conclude that the SPA
executed by Hernandez, Sr. in respondent Camisura's favor was, in
reality,   an   alienation   involving   the   subject   property.   We
particularly  note   that  Hernandez,  Sr.,  aside   from  executing  said
SPA,   likewise   sold   his   rights   and   interests   over   the   property
awarded by the PHHC to Camisura. The CA committed no error
when it ruled:33
x   x   x   Appreciating   the   case   in   its   entirety,   the   purported   SPA
appear to be merely a grant of authority to Camisura (and then to
Plaridel Mingoa) to sell and dispose of the subject property as well
as a grant of right to purchase the said property; but in essence,
such SPA are disguised deeds of sale of the property executed in
circumventing   the   retention   period   restriction   over   the   said
property. Verily, the parties knew that the land in question could
not be alienated in favor of any third person within one (1) year
without the approval of the PHHC.
Having ruled that the SPA in favor of Camisura was a contract of
sale, the next question is whether or not such sale was valid.
To   constitute   a   valid   contract,   the   Civil   Code   requires   the
concurrence of the following elements: (1) cause, (2) object, and
(3) consent.
The   consent   of   Domingo   Hernandez,   Sr.   to   the   contract   is
undisputed, thus, the sale of his ½ share in the conjugal property
was   valid.   With   regard   to   the   consent   of   his   wife,   Sergia
Hernandez, to the sale involving their conjugal property, the trial
court found that it was lacking because said wife’s signature on the
SPA was falsified. Notably, even the CA observed that the forgery
was so blatant as to be remarkably noticeable to the naked eye of
an ordinary person. Having compared the questioned signature on
the   SPA34 with   those   of   the   documents35 bearing   the   sample
48
standard   signature   of   Sergia   Hernandez,   we   affirm   both   lower
courts' findings regarding the forgery.
However, Sergia’s lack of consent to the sale did not render the
transfer of her share invalid.
Petitioners contend that such lack of consent on the part of Sergia
Hernandez rendered the SPAs and the deed of sale fictitious, hence
null and void in accordance with Article 140936 of the Civil Code.
Petitioners likewise contend that an action for the declaration of
the   non­existence   of   a   contract   under   Article   1410 37 does   not
prescribe.
We find, after meticulous review of the facts, that Articles 1409
and 1410 are not applicable to the matter now before us.
It bears stressing that the subject matter herein involves conjugal
property. Said property was awarded to Domingo Hernandez, Sr.
in 1958. The assailed SPAs were executed in 1963 and 1964. Title
in   the   name   of   Domingo   Hernandez,   Sr.   covering   the   subject
property was issued on May 23, 1966. The sale of the property to
Melanie   Mingoa   and   the   issuance   of   a   new   title   in   her   name
happened   in   1978.   Since   all   these   events   occurred   before   the
Family Code took effect in 1988, the provisions of the New Civil
Code   govern   these   transactions.   We   quote   the   applicable
provisions, to wit:
Art.   165.   The   husband   is   the   administrator   of   the   conjugal
partnership.
Art. 166. Unless the wife has been declared a non compos mentis
or a spendthrift, or is under civil interdiction or is confined in a
leprosarium,   the   husband   cannot   alienate   or   encumber   any   real
property of the conjugal partnership without the wife’s consent. If
she   refuses   unreasonably   to   give   her   consent,   the   court   may
compel her to grant the same. x x x.
Art. 173. The  wife  may, during the marriage, and within ten
years   from   the   transaction   questioned, ask   the   courts   for   the
annulment of any contract of the husband entered into without her
consent, when such consent is required, or any act or contract of
the husband which tends to defraud her or impair her interest in the
conjugal partnership property. Should the wife fail to exercise this
right, she or her heirs, after the dissolution of the marriage, may
demand   the   value   of   property   fraudulently   alienated   by   the
husband. (Emphasis ours.)
Notwithstanding   the   foregoing,   petitioners   argue   that   the
disposition of conjugal property made by a husband without the
wife’s   consent   is   null   and   void   and   the   right   to   file   an   action
thereon is imprescriptible, in accordance with Garcia v. CA 38 and
Bucoy v. Paulino.39 .
Concededly, in the aforementioned cases of Garcia and Bucoy, the
contracts involving the sale of conjugal property by the husband
without   the   wife's   consent   were   declared   null   and   void   by   this
Court. But even in Bucoy, we significantly ruled, in reference to
Article 173, that:
The plain meaning attached to the plain language of the law is that
the contract, in its entirety, executed by the husband without the
wife’s consent, may be annulled by the wife.40 (emphasis ours)
In succeeding cases, we held that alienation and/or encumbrance of
conjugal property by the husband without the wife’s consent is not
null and void but merely voidable.
In Sps. Alfredo v. Sps. Borras,41 we held that:
The Family Code, which took effect on 3 August 1988, provides
that any alienation or encumbrance made by the husband of the
conjugal partnership property without the consent of the wife is
void. However, when the sale is made before the effectivity of the
Family Code, the applicable law is the Civil Code.
Article   173   of   the   Civil   Code   provides   that   the   disposition   of
conjugal property without the wife's consent is not void but merely
voidable.
We likewise made the same holding in Pelayo v. Perez :42
xxx [Under] Article 173, in relation to Article 166, both of the
New  Civil Code, which was still in effect on January 11, 1988
when   the   deed   in   question   was   executed,   the   lack   of   marital
consent to the disposition of conjugal property does not make the
contract void ab initio but merely voidable.
In   Vera­Cruz   v.   Calderon,43 the   Court   noted   the   state   of
jurisprudence and elucidated on the matter, thus:
In the recent case of Heirs of Ignacia Aguilar­Reyes v. Spouses
Mijares, we reiterated the rule that the husband cannot alienate or
encumber any conjugal real property without the consent, express
or implied, of the wife, otherwise, the contract is voidable. To wit:
Indeed, in several cases the Court has ruled that such alienation or
encumbrance by the husband is void. The better view, however, is
to consider the transaction as merely voidable and not void. This is
consistent with Article 173 of the Civil Code pursuant to which the
wife   could,   during   the   marriage   and   within   10   years   from   the
questioned transaction, seek its annulment.
x x x
Likewise,  in   the   case   of   Heirs   of   Christina   Ayuste   v.   Court  of
Appeals, we declared that:
There is no ambiguity in the wording of the law. A sale of real
property of the conjugal partnership made by the husband without
the consent of his wife is voidable. The action for annulment must
be   brought   during   the   marriage   and   within   ten   years   from   the
questioned transaction by the wife. Where the law speaks in clear
and   categorical   language,   there   is   no   room   for   interpretation   –
there is room only for application.
x x x (Emphasis ours.)
Here, the husband’s first act of disposition of the subject property
occurred   in   1963   when   he   executed   the   SPA   and   the   Deed   of
Transfer of Rights in favor of Dolores Camisura. Thus, the right of
action of  the  petitioners accrued in 1963, as Article  173 of  the
Civil   Code   provides   that   the   wife   may   file   for   annulment   of   a
contract entered into by the husband without her consent within ten
(10)   years  from  the   transaction   questioned.  Petitioners   filed  the
action for reconveyance in 1995. Even if we were to consider that
their right of action arose when they learned of the cancellation of
TCT No. 107534 and the issuance of TCT No. 290121 in Melanie
Mingoa’s name in 1993, still, twelve (12) years have lapsed since
such   discovery,   and   they   filed   the   petition   beyond   the   period
allowed by law. Moreover, when Sergia Hernandez, together with
her   children,   filed   the   action   for   reconveyance,   the   conjugal
partnership   of   property   with   Hernandez,   Sr.   had   already   been
terminated   by   virtue   of   the   latter's   death   on   April   16,   1983.
Clearly, therefore, petitioners’ action has prescribed.
And this is as it should be, for in the same Vera­Cruz case, we
further held that:44
xxx [Under] Article 173 of the New Civil Code, an action for the
annulment of any contract entered into by the husband without the
wife’s   consent   must   be   filed   (1)   during   the   marriage;   and   (2)
within ten years from the transaction questioned. Where any one
of these two conditions is lacking, the action will be considered
as having been filed out of time.
In   the   case   at   bar,   while   respondent   filed   her   complaint   for
annulment of the deed of sale on July 8, 1994, i.e., within the ten­
year period counted from the execution of the deed of sale of the
property on June 3, 1986, the marriage between her and Avelino
had already been dissolved by the death of the latter on November
20, 1993. In other words, her marriage to Avelino was no longer
49
subsisting at the time she filed her complaint. Therefore, the civil
case had already been barred by prescription. (Emphasis ours.)
Thus, the failure of Sergia Hernandez to file with the courts an
action for annulment of the contract during the marriage and within
ten   (10)   years   from   the   transaction   necessarily   barred  her   from
questioning the sale of the subject property to third persons.
As we held in Vda. De Ramones v. Agbayani:45
In Villaranda v. Villaranda, et al., this Court, through Mr. Justice
Artemio V. Panganiban, ruled that without the wife’s consent, the
husband’s alienation or encumbrance of conjugal property prior to
the effectivity of the Family Code is not void, but merely voidable.
However, the wife’s failure to file with the courts an action for
annulment of the contract during the marriage and within ten
(10) years from the transaction shall render the sale valid. x x x
(emphasis ours)
More   than   having   merely   prescribed,   petitioners’   action   has
likewise become stale, as it is barred by laches.
In Isabela Colleges v. Heirs of Nieves­Tolentino,46 this Court held:
Laches   means   the   failure   or   neglect   for   an   unreasonable   and
unexplained length of time to do that which, by observance of due
diligence, could or should have been done earlier. It is negligence
or omission to assert a right within a reasonable time, warranting
the presumption that the party entitled to assert his right either has
abandoned or declined to assert it. Laches thus operates as a bar in
equity.
x x x
The time­honored rule anchored on public policy is that relief will
be denied to a litigant whose claim or demand has become "stale,"
or who has acquiesced for an unreasonable length of time, or who
has   not   been   vigilant   or   who   has   slept   on   his   rights   either   by
negligence,   folly   or   inattention.   In   other   words,   public   policy
requires, for peace of society, the discouragement of claims grown
stale   for   non­assertion;   thus   laches   is   an   impediment   to   the
assertion or enforcement of a right which has become, under the
circumstances, inequitable or unfair to permit.
Pertinently,   in   De   la   Calzada­Cierras   v.   CA, 47 we   ruled   that   a
complaint to recover the title and possession of the lot filed 12
years after the registration of the sale is considered neglect for an
unreasonably long time to assert a right to the property.
Here, petitioners' unreasonably long period of inaction in asserting
their   purported   rights   over   the   subject   property   weighs   heavily
against   them.   We   quote   with   approval   the   findings   of   the   CA
that:48
It was earlier shown that there existed a period of 17 years during
which   time   Hernandez,   Sr.   xxx   never   even   questioned   the
defendants­appellants possession of the property; also there  was
another interval of 12 years after discovering that the TCT of the
property   in   the   name   of   Hernandez,   Sr.   before   the   Heirs   of
Hernandez instituted an action for the reconveyance of the title of
the property.
x x x
The fact that the Mingoa's were able to take actual possession of
the subject property for such a long period without any form of
cognizable protest from Hernandez, Sr. and the plaintiffs­appellees
strongly calls for  the  application of  the  doctrine  of laches. It is
common practice in the real estate industry, an ocular inspection of
the premises involved is a safeguard to the cautious and prudent
purchaser usually takes, and should he find out that the land he
intends to buy is occupied by anybody else other than the seller
who is not in actual possession, it could then be incumbent upon
the   purchaser   to   verify   the   extent   of   the   occupant's   possessory
rights. The plaintiffs­appellees asseverate that the award was made
in favor of Hernandez, Sr. in 1958; full payment made in 1963; and
title issued in 1966. It would thus be contrary to ordinary human
conduct (and prudence dictates otherwise) for any awardee of real
property not to visit and inspect even once, the property awarded to
him and find out if there are any transgressors in his property.
anything at all except only shortly before the death of Hernandez.
To accept that not even the wife knew of the transactions made by
Hernandez,   Sr.   nor   anything   about   the   actual   possession   of   the
defendants­appellants for such a long period is to Us absurd if not
fantastic.
In sum, the rights and interests of the spouses Hernandez over the
subject   property   were   validly   transferred   to   respondent   Dolores
Camisura. Since the sale of the conjugal property by Hernandez,
Sr.   was   without   the   consent   of   his   wife,   Sergia,   the   same   is
voidable; thus, binding  unless annulled. Considering that Sergia
failed to exercise her right to ask for the annulment of the sale
within the prescribed period, she is now barred from questioning
the validity thereof. And more so, she is precluded from assailing
the validity of the subsequent transfers from Camisura to Plaridel
Mingoa and from the latter to Melanie Mingoa. Therefore, title to
the   subject   property   cannot   anymore   be   reconveyed   to   the
petitioners   by   reason   of   prescription   and laches.   The   issues   of
prescription   and laches having   been   resolved,   it   is   no   longer
necessary to discuss the other issues raised in this petition.
WHEREFORE, the instant petition is DENIED and the assailed
Decision dated September 7, 2000 and Resolution dated December
29, 2000 of the Court of Appeals are hereby AFFIRMED.
Costs against the petitioners.
SO ORDERED.

Furthermore,  Hernandez,  Sr.'s  inaction  during  his  lifetime  lends

more credence to the defendants­appellants assertion that the said
property was indeed sold by Hernandez, Sr. by way of the SPAs,
albeit without the consent of his wife. xxx

In addition, the reasons of poverty and poor health submitted by
the plaintiffs­appellees could not justify the 12 years of delay in
filing a complaint against the defendants­appellants. The records
are bereft of any evidence to support the idea that the plaintiffs­
appellees diligently asserted their rights over the said property after
having   knowledge   of   the   cancellation   of   the   TCT   issued   in
Hernandez   name.   Moreover   the   Court   seriously   doubts   the
plausibility of this contention since what the plaintiffs­appellees
are trying to impress on this Court's mind is that they did not know

50
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 190995               August 09, 2017
BENJAMIN A. KO, ALEXANDER A. KO, MA. CYNTHIA K.
AZADA­CHUA, GARY A. KO, ANTHONY A. KO, FELIX A.
KO,   and   DANTON   C.   KO, Petitioners,
vs.
VIRGINIA  DY  ARAMBURO,  VICKY   ARAMBURO,  JULY
ARAMBURO,   JESUS   ARAMBURO,   JOSEPHINE
ARAMBURO,   MARYJANE   ARAMBURO,   AUGUSTO
ARAMBURO,   JR.,   JAIME   ARAMBURO,   JULIET
ARAMBURO,   JACKSON   ARAMBURO,   JOCELYN
ARAMBURO,   AILEEN   ARAMBURO,   JUVY
ARAMBURO,CORAZON   ROTAIRO   ARAMBURO,   AND
NEIL VINCENT ARAMBURO, Respondents.
D E C I S I O N
TIJAM, J.:
This is a Petition for Review on Certiorari under Rule 45, assailing
the Decision dated September 22, 2009 of the Court of Appeals
(CA)   in   CA­G.R.   CV   No.  89611,   affirming   the   Decision  dated
February 16, 2006 of the Regional Trial Court (RTC) of Tabaco
City, Branch 15, in Civil Case No. T­1693.
Factual and Procedural Antecedents
Respondent   Virginia   Dy   Aramburo   (Virginia)   is   Corazon
Aramburo Ko's (Corazon) sister­in­law, the former being the wife
of the latter's brother, Simeon Aramburo (Simeon). Corazon and
Simeon have another sibling, Augusto Aramburo (Augusto), who
predeceased them. Virginia's co respondents herein are the heirs of
Augusto, while the petitioners in the instant case are the heirs of
Corazon who substituted the latter after she died while the case
was pending before the CA.
On November 26, 1993, Virginia, together with her co­respondents
herein,   filed   a   Complaint   for   Recovery   of   Ownership   with
Declaration   of   Nullity   and/or   Alternatively   Reconveyance   and
Damages with Preliminary Injunction against Corazon, docketed as
Civil Case No. T­1693.
Subject of this case are seven parcels of land located in Tabaco
City, Albay, to wit: (1) Transfer Certificate of Title (TCT) No. T­
41187 with an area of 176,549 square meters, more or less; (2)
TCT No. T­41183 with an area of 217,732 sq m, more or less; (3)
TCT No. T­41184 with an area of 39,674 sq m, more or less; (4)
TCT No. T­28161 with an area of 86,585 sq m, more or less; (5)
TCT No. T­41186 with an area of 4,325 sq m, more or less; (6)
TCT No. 49818 with an area of 27,281 sq m, more or less; and (7)
TCT No. 49819 with an area of 35,760 sq m, more or less (subject
properties), now all under the name of Corazon.
The   complaint   alleged   that   Virginia   and   her   husband   Simeon
(Spouses   Simeon   and   Virginia),   together   with   Corazon   and   her
husband Felix (Spouses Felix and Corazon), acquired the subject
properties   from   Spouses   Eusebio   and   Epifania   Casaul   (Spouses
Eusebio and Epifania) through a Deed of Cession dated April 10,
1970.
On   April   13,   1970,   Spouses   Simeon   and   Virginia   and   Spouses
Felix   and   Corazon   executed   a   Deed   of   Cession   in   favor   of
Augusto's   heirs,   subject   of   which   is   the   one­third   pro­indiviso
portion of the subject properties.
However, allegedly with the use of falsified documents, Corazon
was   able   to   have   the   entire   subject   properties   transferred
exclusively   to   her   name,   depriving   her   co­owners   Virginia   and
Augusto's   heirs   of   their   pro­indiviso   share,   as   well   as   in   the
produce of the same.
For   her   part,   Corazon   admitted   having   acquired   the   subject
properties through cession from their uncle and auntie, Spouses
Eusebio and Epifania. She, however, intimated that although the
said properties were previously registered under Spouses Eusebio
and   Epifania's   name,   the   same   were,   in   truth,   owned   by   their
parents, Spouses Juan and Juliana Aramburo (Spouses Juan and
Juliana).   Hence,   when   her   parents   died,   Spouses   Eusebio   and
Epifania allegedly merely returned the said properties to Spouses
Juan and Juliana by ceding the same to their children, Corazon and
Simeon. She further averred that the said properties were ceded
only  to  her  and Simeon, in  that,  her  husband Felix's  name   and
Virginia's name appearing in the Deed were merely descriptive of
51
her and Simeon's civil status, being married to Felix and Virginia,
respectively.
Corazon alleged that she and Simeon thought of sharing a third of
the subject properties with the heirs of their brother Augusto who
predeceased them, hence they executed a Deed of Cession on April
13, 1970 but later on decided to recall and not implement the same.
In fine, thus, Corazon insisted that only she and Simeon share one­
half portion each of the subject properties. 
Corazon further alleged that on December 14, 1974, Simeon sold
and conveyed his entire one­half share in the co­owned properties
in her favor. Hence, Corazon became the sole owner thereof and
consequently,  was  able   to  transfer   the  titles  of   the  same   to  her
name.   Corazon   argued   that   the   subject   properties   belong   to
Simeon's exclusive property, hence, Virginia's conformity to such
sale was not necessary.
Corazon   also   raised   in   her   Answer   to   the   complaint,   that
respondents' action was barred by prescription.
Ruling of the RTC
During trial, it was established that Simeon and Virginia's marriage
had been on bad terms. In fact, since February 4, 1973 Simeon and
Virginia had lived separately. Simeon lived with his sister Corazon
in Tabaco City, Albay, while Virginia and their children lived in
Paco, Manila. From these circumstances, the trial court deduced
that it is highly suspicious that thereafter, Virginia would sign a
deed   of   sale,   consenting   to   her   husband's   decision   to   sell   their
conjugal   assets   to   Corazon.   Virginia   vehemently   disowned   the
signature appearing in the December 14, 1974 Deed of Absolute
Sale.   Verily,   the   National   Bureau   of   Investigation   (NBI)
examination report concluded that the questioned signature and the
specimen signatures of Virginia were not written by one and the
same person and thus, the former is a forgery. 
Without the conformity of Virginia, according to the trial court,
Simeon   cannot   alienate   or   encumber   any   real   property   of   the
conjugal partnership.
The trial court concluded, thus, that the December 14, 1974 Deed
of   Absolute   Sale,   being   falsified,   is   not   a   valid   instrument   to
transfer the one third share of the subject properties.
The trial court also did not accept Corazon's allegation that the
April 13, 1970 Deed of Cession in favor of Augusto's heirs as to
the other one third portion of the subject properties, was cancelled
and not implemented. The trial court noted Corazon's testimony
during trial that she was merely administering the said portion for
Augusto's heirs, her nephews and nieces, who were still minors at
that time.
On February 16, 2006, the trial court rendered a Decision in favor
of herein respondents, thus:
WHEREFORE,   foregoing   premises   considered,   judgment   is
hereby rendered in favor of the plaintiffs:
(1) Declaring   the   plaintiffs   Virginia   Dy­Arambulo   and
Vicky   Aramburo­Lee   together   with   the   interested
parties the owner of ONE­THIRD (1/3) portion of the
property subject mater of this case;
(2) Declaring the co­plaintiffs (heirs of Augusto Aramburo)
likewise the owners of One­third (1/3) portion of the
property subject matter of this case;
(3) Ordering the  Cancellation of  [TCT]  Nos. T­41187,T­
41183,  T­41184,  T­41185,  T­41186, T­48918[4]  [sic]
and T­49819 and another ones issued upon proper steps
taken   in   the   names   of   the   plaintiffs   and   interested
parties;   and   the   other   plaintiffs,   Heirs   of   Augusto
Aramburo, conferring ownership  over  TWO­THIRDS
(2/3) PORTION of the properties subject matter of this
case;
(4) Ordering   the   defendant   to   reimburse   the   plaintiffs
TWO­THIRDS (2/3) of the produce of the properties,
subject   matter   of   this   case   from   the   time   she
appropriated it to herself in 1974 until such time as the
2/3 share are duly delivered to them; and  We find no cogent reason to depart from the the courts a quo's
(5) Ordering   the   defendant   to   pay   plaintiffs   by   way   of
damages the amount of Fifty Thousand (P50,000.00) as
attorney's fees; and  
(6) To pay the cost of suit.
SO ORDERED.
Ruling of the CA
On appeal, Corazon maintained that the subject properties are not
part of Spouses Simeon and Virginia's conjugal properties. This,
according to her, is bolstered by the fact that the subject properties
are not included in the case for dissolution of conjugal partnership
docketed as Special Proceeding No. 67, and in the separation of
properties   case   docketed   as   Civil   Case   No.   T­1032   between
Simeon and Virginia.
Respondents argued otherwise. Particularly, Virginia insisted that
only a third portion of the subject properties is owned by Simeon
and that the same is conjugally­owned by her and Simeon since it
was acquired during their marriage. As such, the  disposition by
Simeon of the one­half portion of the subject properties in favor of
Corazon   is   not   only   void   but   also   fictitious   not   only   because
Simeon does not own the said one­half portion, but also because
Virginia's purported signature in the December 14, 1974 Deed of
Absolute Sale as the vendor's wife was a forgery as found by the
NBI, which was upheld by the trial court.
In its September 22, 2009 assailed Decision,[20] the CA affirmed
the trial court's findings and conclusion in its entirety, thus:
WHEREFORE,  the   present   appeal   is  DISMISSED.
Consequently, the Decision of the [RTC], Branch 15, Tabaco City,
in Civil Case No. T­1693 is hereby AFFIRMED in toto.
SO ORDERED.
Petitioners then, substituting deceased Corazon, filed a Motion for
Reconsideration,   which   was   likewise   denied   by   the   CA   in   its
Resolution dated January 13, 2010:
WHEREFORE, there being no cogent reason for US to depart
from Our  assailed Decision,  WE  hereby  DENY  the  Motion for
Partial Reconsideration.
SO ORDERED.
Hence, this petition.
Issue
Did   the   CA   correctly   sustain   the   RTC   decision,   declaring   the
parties as co­owners of the subject properties? In the affirmative,
52
may the subject titles be nullified and transferred to the parties as
to their respective portions?
This Court's Ruling
The petition is partly meritorious.
At the outset, let it be stated that the law which governs the instant
case   is   the   Old   Civil   Code,   not   the   Family   Code,   as   the
circumstances of this case all occurred before the effectivity of the
Family Code on August 3, 1988.
Proceeding, thus, to the issue of ownership, We find no reason to
depart from the RTC's ruling as affirmed by the CA.
Augusto's   heirs   own   one­third   pro­indiviso   share   in   the   subject
properties
Respondents' (Augusto's heirs) claim concerning one­third of the
subject properties, is anchored upon the April 13, 1970 Deed of
Cession   executed   by   Spouses   Felix   and   Corazon   and   Spouses
Simeon and Virginia in favor of Augusto's children. Petitioners,
however, maintain that the said deed was never given effect as it
was recalled by the said spouses.
The courts a quo found that the said deed, ceding a third of the
subject properties to Augusto's heirs, was in fact implemented as
evidenced   by   Corazon's   testimony   that   she   was   merely
administering   the   said   properties   for   Augusto's   heirs   as   her
nephews and nieces were still minors at that time.
findings as to the existence and effectivity of the April 13, 1970
Deed of Cession giving rights to Augusto's children over the one­
third portion of the subject property. For one, basic is the rule that
factual   findings   of   the   trial   court,   especially   if   affirmed   by   the
appellate court, are binding and conclusive upon this Court absent
any   clear   showing   of   abuse,   arbitrariness,   or   capriciousness
committed by the trial court.[25] In addition, We are not convinced
of Corazon's bare assertion that the said document was cancelled
merely   because   she   and   her   brother   .   Simeon   decided   not   to
implement   it   anymore.   Moreover,   as   can   be   gleaned   from   the
testimony of respondent July Aramburo, one of Augusto's heirs,
which was notably quoted by the petitioners in this petition, it is
clear   that   he,   together   with   his   co­heirs,   are   co­owners   of   the
subject properties along with Spouses Simeon and Virginia  and
Spouses   Felix   and   Corazon,   by   virtue   of   the   Deed   of   Cession
executed   in   their   favor.   The   said   testimony   clearly   stated   that
Simeon was also merely administering the subject properties.
Simeon's heirs, which include Virginia, also own one­third pro­
indiviso share in the subject properties
Respondent Virginia's claim as to the other one­third portion of the
subject properties is ultimately anchored upon the April 10, 1970
Deed of Cession. Corazon, however, countered that inasmuch as
her husband Felix's name in the said Deed of Cession was merely
descriptive of her status as being married to the latter, Virginia's
name   likewise  appeared  in  the   said   Deed  of  Cession  merely  to
describe   Simeon's   status   as   being   married   to   Virginia.   In   fine,
Corazon argued that the properties subject of the said Deed were
given exclusively to her and Simeon. Consequently, the one­half
portion thereof pertains to Simeon's exclusive property and does
not   belong   to   Simeon   and   Virginia's   conjugal   property.   This,
according   to   Corazon,   was   bolstered   by   the   fact   that   Simeon's
share in the subject properties was not included in the petition for
separation of properties between Virginia and Simeon. Petitioners
maintain this argument.
We uphold the courts a quo's conclusion that one­third portion of
the   subject   properties   is   indeed   part   of   Simeon   and   Virginia's
conjugal properties.
It   is   undisputed   that   the   subject   properties   were   originally
registered in the name of Spouses Eusebio and Epifania. It is also
undisputed that in a Deed of Cession dated April 10, 1970, these
parcels   of   land   were   ceded   to  Spouses   Felix   and  Corazon,   and
Spouses Simeon and Virginia. There is likewise no question that
the   subject   properties   were   ceded   to   the   said   spouses   during
Spouses Simeon and Virginia's marriage.
Article   160   of   the   Old   Civil   Code,   which   is   the   applicable
provision since the property was acquired prior to the enactment of
the Family Code as stated above, provides that "all property of the
marriage is presumed to belong to the conjugal partnership, unless
it be proved that it pertains exclusively to the husband or to the
wife." This presumption in favor of conjugality is rebuttable, but
only with a strong, clear and convincing evidence; there must be a
strict proof of exclusive ownership of one of the spouses, and the
burden of proof rests upon the party asserting it.
Thus,  in   this  case,  the  subject  properties,  having   been  acquired
during the marriage, are still presumed to belong to Simeon and
Virginia's conjugal properties.
Unfortunately, Corazon, or the petitioners for that matter, failed to
adduce   ample   evidence   that   would   convince   this   Court   of   the
exclusive character of the properties.
Petitioners' argument that Virginia's name was merely descriptive
of Simeon's civil status is untenable. It bears stressing that if proof
obtains on the acquisition of the property during the existence of
the   marriage,  as  in   this   case,  then   the   presumption   of   conjugal
ownership remains unless a strong, clear and convincing proof was
presented to prove  otherwise. In fact, even the  registration of  a
property in the name of one spouse does not destroy its conjugal
nature.   What   is   material   is   the   time   when   the   property   was
acquired.
We also give scant consideration on petitioners' bare allegation that
the subject properties were actually from the estate of Simeon and
Corazon's   parents,   intimating   that   the   same   were   inherited   by
Simeon and Corazon, hence, considered their exclusive properties.
The records are bereft of any proof that will show that the subject
properties   indeed   belonged   to   Simeon   and   Corazon's   parents.
Again,   what   is   established   is   that   the   subject   properties   were
originally registered under Spouses Eusebio and Epifania's name
and thus, ceded by the  latter. Petitioners' bare allegation on the
matter is so inadequate for the Court to reach a conclusion that the
acquisition of the subject properties was in a nature of inheritance
than a cession.
Likewise, the fact that the subject properties were not included in
the cases for separation of properties between Simeon and Virginia
does not, in any way, prove that the same are not part of Simeon
and Virginia's conjugal properties. Such fact cannot be considered
as  a  strong,  clear   and  convincing  proof  that  the   said   properties
exclusively   belong   to   Simeon.   Besides,   We   note   respondents'
allegation   in   their   Comment   to   this   petition   that   the   case   for
separation   of   properties   between   Simeon   and   Virginia   was   not
resolved by the trial court on the merits as Simeon died during the
pendency   thereof,   and   also   because   there   was   actually   a
disagreement as to the inventory the properties included therein.
This could mean that precisely, other properties may be part of the
53
said spouses' conjugal properties and were not included in the said
case. Notably, such allegation was not denied by the petitioners.
At   any   rate,   the   question   of   whether   petitioners   were   able   to
adduce   proof   to   overthrow   the   presumption   of   conjugality   is   a
factual issue best addressed by the trial court. It cannot be over­
emphasized   that   factual   determinations   of   the   trial   courts,
especially   when  confirmed   by  the   appellate   court,   are   accorded
great weight by the Court and, as a rule, will not be disturbed on
appeal, except for the most compelling reasons, which We do not
find in the case at bar.
Simeon   could   not   have   validly   sold   the   one­third   share   of
Augusto's   heirs,   as   well   as   the   one­third   portion   of   his   and
Virginia's   conjugal   share   without   the   latter's   consent,   to
Corazon
We now proceed to determine the validity of the December 14,
1974   Deed   of   Absolute   Sale   executed   by   Simeon   in   favor   of
Corazon, covering one­half of the subject properties which was his
purported share.
As for the one­third portion of the subject properties pertaining to
Augusto's heirs, we are one with the CA in ruling that the Deed of
Absolute Sale is void as the said portion is owned by Augusto's
heirs as above­discussed and thus, Simeon had no right to sell the
same. It is basic that the object of a valid sales contract must be
owned by the seller.[32] Nemo dat quod non habet, as an ancient
Latin maxim says. One cannot give what one does not have.
However, as to the one­third portion commonly­owned by Spouses
Simeon and Virginia, Simeon's alienation of the same through sale
without Virginia's conformity is merely voidable.
Article 166 of the Old Civil Code explicitly requires the consent of
the wife before the husband may alienate or encumber any real
property   of   the   conjugal   partnership   except   when   there   is   a
showing that the wife is incapacitated, under civil interdiction, or
in like situations.
In this case, Virginia vehemently denies having conformed to the
December 14, 1974 sale in favor of Corazon. In fact, during trial, it
has already been satisfactorily proven, through the NBI's findings
as upheld by the trial court, that Virginia's signature appearing on
the said Deed of Absolute Sale is a forgery. Concedingly, a finding
of   forgery   does   not   depend   entirely   on   the   testimonies   of
handwriting   experts   as   even   this   Court   may   conduct   an
independent examination of the questioned signature in order to
arrive   at   a   reasonable   conclusion   as   to   its   authenticity.   We,
however,   do   not   have   any   means   to   evaluate   the   questioned
signature in this case as even the questioned Deed of Absolute Sale
is   not   available   in   the   records   before   Us.   Hence,   We   are
constrained to the general rule that the factual findings of the RTC
as affirmed by the CA should not be disturbed by this Court unless
there is a compelling reason to deviate therefrom.
In addition, as correctly observed by the courts a quo, We cannot
turn a blind eye on the circumstances surrounding the execution of
the said Deed of Absolute Sale. The CA, quoting the RTC, held
thus:
The   dubiety   of   its   execution   at   a   time   that   [Virginia]   and   her
husband's marital relationship was already stale is not to be taken
for granted. It is a fact that [Virginia] had lived separately from
bed and board with her husband [Simeon] as of February 4, 1973.
It is, therefore, highly suspicious that [later on], x x x she would
consent to her husband's decision selling their conjugal assets to
[Corazon].   Precisely,   her   signature   appearing   in   said   Deed   of
Absolute Sale dated December 14, 1974 x x x is being disowned
by   her   as   being   a   forgery.   Undoubtedly,   the   NBI   Examination
report   anent   this   x   x   x   conducted   by   Sr.   Document   Examiner
Rhoda B. Flores gave the conclusion that the questioned and the
standard/sample signatures of "[Virginia]" was not written by one
and the same person. x x x.
The CA also correctly observed that the forgery, as found by the
RTC,   is   evident   from   the   admitted   fact   of   strained   marital
relationship between Simeon and Virginia and the fact that at the
time the question Deed of Absolute Sale was executed, Simeon
had   been   living   with   Corazon   in   Tabaco   City,   Albay,   while
Virginia and her children were living in Paco, Manila.
Accordingly, without Virginia's conformity, the Deed of Absolute
Sale   executed   on   December   14,   1974   between   Simeon   and
Corazon purportedly covering one­half of the subject properties is
voidable.
As for Augusto's heirs, the action to nullify the sale of their
share, being void is imprescriptible; as for Virginia, the action
to   nullify   the   sale   of   her   share,   being   merely   voidable,   is
susceptible to prescription
At this juncture, We differ from the CA's pronouncement that since
the deed of sale involved is a void contract, the action to nullify the
same is imprescriptible.
We qualify.
For the share of Augusto's heirs sold by Simeon in the December
14, 1974 Deed of Absolute Sale, the sale of the same is void as the
object of such sale, not being owned by the seller, did not exist at
the time of the transaction.[37] Being a void contract, thus, the CA
correctly ruled that the action to impugn the sale of the same is
imprescriptible   pursuant   to   Article   1410[38]   of   the   New   Civil
Code (NCC).
As   for   the   share   pertaining   to   Simeon   and   Virginia,   We   must
emphasize   that   the   governing   law   in   this   case   is   the   Old   Civil
Code. Under the said law, while the husband is prohibited from
selling   the   commonly­owned   real   property   without   his   wife's
consent, still, such sale is not void but merely voidable.[39] Article
173 thereof gave Virginia the right to have the sale annulled during
the marriage within ten years from the date of the sale. Failing in
that,   she   or   her   heirs   may   demand,   after   dissolution   of   the
marriage, only the value of the property that Simeon erroneously
sold.[40] Thus:
Art. 173. The wife may, during the marriage, and within ten years
from the transaction questioned, ask the courts for the annulment
of any contract of the husband entered into without her consent,
when   such   consent   is   required,   or   any   act   or   contract   of   the
husband which tends to defraud her or impair her interest in the
conjugal partnership property. Should the wife fail to exercise this
right, she or her heirs, after the dissolution of the marriage, may
demand   the   value   of   property   fraudulently   alienated   by   the
husband.
In   contrast,   the   Family   Code   does   not   provide   a   period   within
which the wife who gave no consent may assail her husband's sale
of real property. It simply provides that without the other spouse's
written consent or a court order allowing the sale, the same would
be void.[41] Thus, the provisions of the NCC governing contracts
is applied as regards the issue on prescription. Under the NCC, a
void or inexistent contract has no force and effect from the very
54
beginning, and this rule applies to contracts that are declared void
by positive provision of law as in the case of a sale of conjugal
property   without   the   other   spouse's   written   consent.[42]   Under
Article 1410 of the NCC, the action or defense for the declaration
of the inexistence of a contract does not prescribe.
As   this   case,   as   far   as   Virginia   is   concerned,   falls   under   the
provisions of the Old Civil Code, the CA erred in ruling that the
subject Deed of Absolute Sale is void for the lack of the wife's
conformity thereto and thus, applying Article 1410 of  the  NCC
stating that the action to question a void contract is imprescriptible.
Again, Simeon's sale of their conjugal property without his wife's
conformity under the Old Civil Code is merely voidable not void.
The imprescriptibility of an action assailing a void contract under
Article 1410 of the NCC, thus, does not apply in such case. The
10­year   prescriptive   period   under   Article   173   of   the   Old   Civil
Code, therefore, should be applied in this case.
Here, the invalid sale was executed on December 14, 1974 while
the action questioning the same was filed in 1993, which is clearly
way beyond the 10­year period prescribed under Article 173 of the
Old Civil Code. Virginia's recourse is, therefore, to demand only
the value of the property, i.e., the one­third portion of the subject
properties invalidly sold by Simeon without Virginia's conformity
pursuant to the same provision.
In fine, while We uphold the courts a quo's findings that the parties
herein are co­owners of the subject properties, We reverse and set
aside the said courts' ruling, ordering the cancellation of titles of
the   entire   subject   properties   and   the   transfer   of   the   two­thirds
portion of the same to the respondents. While Augusto's heirs are
entitled  to   the  recovery  of   their  share  in  the  subject  properties,
Virginia   is   only   entitled   to   demand   the   value   of   her   share
therefrom pursuant to Article 173 of the Old Civil Code above­
cited.
WHEREFORE,   premises   considered,   the   petition   is  PARTLY
GRANTED. The Decision dated September 22, 2009 of the Court
of   Appeals   in   CA­G.R.   CV   No.   89611,   affirming   the   Decision
dated February 16, 2006 of the Regional Trial Court of Tabaco
City, Branch 15, in Civil Case No. T­1693 is hereby AFFIRMED
in all aspects EXCEPT insofar as it ordered the cancellation of the
titles of the entire subject properties.
Accordingly,   petitioners   Heirs   of   Corazon   Aramburo   Ko,
respondents Virginia Dy Aramburo and all persons claiming under
her,   as   Heirs   of   Simeon   Aramburo,   and   respondents   Heirs   of
Augusto   Aramburo   are   deemed   co­owners   pro­indiviso   of   the
subject properties in equal one­third (1/3) share. As such, the titles
over the subject properties are ORDERED cancelled insofar as the
heirs   of   Augusto   Aramburo's   share   is   concerned.   Virginia   Dy
Aramburo  and  all  persons  claiming  under  her   have  the   right  to
demand for the value of their one­third (1/3) share in a proper case.

SO ORDERED.

Velasco, Jr., (Chairperson), Peralta,[*] Bersamin, and Jardeleza, 
JJ., concur.

55
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 125172 June 26, 1998
Spouses ANTONIO and LUZVIMINDA GUIANG, petitioners,
vs.
COURT OF APPEALS and GILDA COPUZ, respondents.
PANGANIBAN, J.:
The sale of a conjugal property requires the consent of both the
husband and the wife. The absence of the consent of one renders
the sale null and void, while the vitiation thereof makes it merely
voidable. Only in the latter case can ratification cure the defect.
The Case
These were the principles that guided the Court in deciding this
petition for review of the Decision 1 dated January 30, 1996 and
the Resolution 2 dated May 28, 1996, promulgated by the Court of
Appeals in CA­GR CV No. 41758, affirming the Decision of the
lower court and denying reconsideration, respectively.
On   May   28,   1990,   Private   Respondent   Gilda   Corpuz   filed   an
Amended   Complainant 3 against   her   husband   Judie   Corpuz   and
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
ACCORDINGLY, judgment is rendered for the plaintiff and
against the defendants,
1.   Declaring   both   the   Deed   of   Transfer   of   Rights   dated
March  1, 1990  (Exh.  "A")   and  the  "amicable  settlement"
dated March 16, 1990 (Exh. "B")  as null void and of no
effect;
2.   Recognizing   as   lawful   and   valid   the   ownership   and
possession   of   plaintiff   Gilda   Corpuz   over   the   remaining
one­half   portion   of   Lot   9,   Block   8,   (LRC)   Psd­165409
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 one­half
of the amount of realty taxes paid by defendants Guiangs on
Lot 9, Block 8, (LRC) Psd­165409, 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, petitioners­spouses 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   defendants­appellants
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
56
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 petitioners­spouses 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 defendants­spouses Antonio and Luzviminda Guiang in
their answer, and also admitted by defendant Judie Corpuz
when he testified in court (tsn. p. 3, June 9, 1992), although
the latter says that they were married in 1967. The couple
have three children, namely: Junie — 18 years old, Harriet
— 17 years of age, and Jodie or Joji, the youngest, who was
15 years of age in August, 1990 when her mother testified in
court.
Sometime on February 14, 1983, the couple Gilda and Judie
Corpuz, with plaintiff­wife 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) Psd­165409 from Manuel Callejo
who signed as vendor through a conditional deed of sale for
a total consideration of P14,735.00. The consideration was
payable in installment, with right of cancellation in favor of
vendor   should   vendee   fail   to   pay   three   successive
installments (Exh. "2", tsn p. 6, February 14, 1990).
2. Sometime on April 22, 1988, the couple Gilda and Judie
Corpuz sold one­half portion of their Lot No. 9, Block 8,
(LRC) Psd­165409 to the defendants­spouses Antonio and
Luzviminda Guiang. The latter have since then occupied the
one­half portion [and] built their house thereon (tsn. p. 4,
May 22, 1992). They are thus adjoining neighbors of the
Corpuzes.
3. Plaintiff Gilda Corpuz left for Manila sometime in June
1989.   She   was   trying   to   look   for   work   abroad,   in   [the]
Middle   East.   Unfortunately,   she   became   a   victim   of   an
unscrupulous   illegal   recruiter.   She   was   not   able   to   go
abroad.   She   stayed   for   sometime   in   Manila   however,
coming back to Koronadal, South Cotabato, . . . on March
11, 1990. Plaintiff's departure for Manila to look for work in
the Middle East was with the consent of her husband Judie
Corpuz (tsn. p. 16, Aug. 12, 1990; p. 10 Sept. 6, 1991).
After   his   wife's   departure   for   Manila,   defendant   Judie
Corpuz   seldom   went   home   to   the   conjugal   dwelling.   He
stayed most of the time at his place of work at Samahang
Nayon   Building,   a   hotel,   restaurant,   and   a   cooperative.
Daughter Herriet Corpuz went to school at King's College,
Bo. 1, Koronadal, South Cotabato, but she was at the same
time working as household help of, and staying at, the house
of   Mr.   Panes.   Her   brother   Junie   was   not   working.   Her
younger sister Jodie (Jojie) was going to school. Her mother
sometimes sent them money (tsn. p. 14, Sept. 6, 1991.)
Sometime in January 1990, Harriet Corpuz learned that her
father   intended   to   sell   the   remaining   one­half   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. 16­17, Sept.
6, 1991).
4.   However,   in   the   absence   of   his   wife   Gilda   Corpuz,
defendant   Judie   Corpuz   pushed   through   the   sale   of   the
remaining one­half 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   one­half
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)   Psd­165408   (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. "3­A"). The new sale
(Exh. "3") describes the lot sold as Lot 8, Block 9, (LRC)
Psd­165408 but it is obvious from the mass of evidence that
the  correct lot is Lot 8, Block 9, (LRC)  Psd­165409, the
very lot earlier sold to the couple Gilda and Judie Corpuz.
5. Sometimes on March 11, 1990, plaintiff returned home.
She found her children staying with other households. Only
Junie was staying in their house. Harriet and Joji were with
Mr. Panes. Gilda gathered her children together and stayed
at their house. Her husband was nowhere to be found. She
was informed by her children that their father had a wife
already.
6. For staying in their house sold by her husband, plaintiff
was complained against by defendant Luzviminda Guiang
and   her   husband   Antonio   Guiang   before   the   Barangay
authorities   of   Barangay   General   Paulino   Santos   (Bo.   1),
Koronadal, South Cotabato, for trespassing (tsn. p. 34, Aug.
17,   1990).   The   case   was   docketed   by   the   barangay
authorities as Barangay Case No. 38 for "trespassing". On
March   16,   1990,   the   parties   thereat   signed   a   document
known   as   "amicable   settlement".   In   full,   the   settlement
provides for, to wit:
That respondent, Mrs. Gilda Corpuz and her three
children, namely: Junie, Hariet and Judie to leave
voluntarily   the   house   of   Mr.   and   Mrs.   Antonio
Guiang, where they are presently boarding without
any charge, on or before April 7, 1990.
FAIL   NOT   UNDER   THE   PENALTY   OF   THE
LAW.
Believing   that   she   had   received   the   shorter   end   of   the
bargain,   plaintiff   to   the   Barangay   Captain   of   Barangay
Paulino  Santos to question her  signature  on the  amicable
settlement.   She   was   referred   however   to   the   Office­In­
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
57
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.   Defendant­spouses   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) Psd­165409.
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, petitioners­spouses contend that (1) the contract of
sale (Deed of Transfer of  Rights) was merely voidable, and (2)
such contract was ratified by private respondent when she entered
into an amicable sttlement with them.
This Court's Ruling
The petition is bereft of merit.
First Issue: Void or Voidable Contract?
Petitioners insist that the questioned Deed of Transfer of Rights
was validly executed by the parties­litigants in good faith and for
valuable   consideration.   The   absence   of   private   respondent's
consent merely rendered the Deed voidable under Article 1390 of
the Civil Code, which provides:
Art.   1390.   The   following   contracts   are   voidable   or
annullable, even though there may have been no damage to
the contracting parties:
x x x           x x x          x x x
(2) Those where the consent is vitiated by mistake, violence,
intimidation, undue influence or fraud.
These contracts are binding, unless they are annulled by a
proper action in court. They are susceptible of ratification.
(n)
The error in petitioners' contention is evident. Article 1390, par. 2,
refers to contracts visited by vices of consent, i.e., contracts which
were entered into by a person whose consent was obtained and
vitiated through mistake, violence, intimidation, undue influence or
fraud. In this instance, private respondent's consent to the contract
of sale of their conjugal property was totally inexistent or absent.
Gilda Corpuz, on direct examination, testified thus: 11
Q Now, on March 1, 1990, could you still recall where
you were?
A I was still in Manila during that time.
x x x           x x x          x x x
ATTY. FUENTES:
Q   When   did   you   come   back   to   Koronadal,   South
Cotabato?
A That was on March 11, 1990, Ma'am.
Q Now, when you arrived at Koronadal, was there any
problem which arose concerning the ownership of your
residential house at Callejo Subdivision?
A   When   I   arrived   here   in   Koronadal,   there   was   a
problem   which   arose   regarding   my   residential   house
and lot because it was sold by my husband without my
knowledge.
This being the case, said contract properly falls within the ambit of
Article 124 of the Family Code, which was correctly applied by the
teo lower court:
Art. 124. The administration and enjoyment of the conjugal
partnerhip properly shall belong to both spouses jointly. In
case   of   disgreement,   the  husband's  decision   shall  prevail,
subject recourse to the court by the wife for proper remedy,
58
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.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 147978            January 23, 2002
59
THELMA A. JADER­MANALO, 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. Jader­Manalo 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
ten­door 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 ₱1,500,000.00 for the Taytay property
and  ₱2,100,000.00   for   the   Makati   property4 to   be   paid   on
installment   basis   with   downpayments   of  ₱100,000.00   and
₱200,000.00, 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 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
₱200,000.00  and  UCPB   Check   No.   62808  also   dated  April   15,
1992 for ₱100,000.00 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
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 incapacitated   or   otherwise   unable   to   participate   in   the
subject properties and that she gave her consent and conformity to administration of the conjugal property.
the same.20
Hence, the present recourse assigning the following errors:
On   October   20,   1992,   respondent   Norma   F.   Camaisa   filed   a
THE   HONORABLE   COURT   OF   APPEALS
Motion for Summary Judgment21 asserting that there is no genuine
GRIEVIOUSLY   ERRED   IN   RENDERING
issue   as   to   any   material   fact   on  the   basis   of   the   pleadings   and
SUMMARY   JUDGMENT   IN   DISMISSING   THE
admission of the parties considering that the wife's written consent
COMPLAINT   ENTIRELY   AND   ORDERING   THE
was   not   obtained   in   the   contract   to   sell,   the   subject   conjugal
CANCELLATION   OF   NOTICE   OF   LIS   PENDENS
properties belonging to respondents; hence, the contract was null
ON   THE   TITLES   OF   THE   SUBJECT   REAL
and void.
PROPERTIES;
On April 14, 1993, the trial court rendered a summary judgment
THE   HONORABLE   COURT   OF   APPEALS
dismissing the complaint on the ground that under Art. 124 of the
GRIEVIOUSLY   ERRED   IN   FAILING   TO
Family   Code,   the   court   cannot   intervene   to   authorize   the
CONSIDER   THAT   THE   SALE   OF   REAL
transaction in the absence of the consent of the wife since said wife
PROPERTIES BY RESPONDENTS TO PETITIONER
who   refused   to   give   consent   had   not   been   shown   to   be
HAVE ALREADY BEEN PERFECTED, FOR AFTER
incapacitated. The dispositive portion of the trial court's decision
THE LATTER PAID P300,000.00 DOWNPAYMENT,
reads:
RESPONDENT   MRS.   CAMAISA   NEVER
WHEREFORE,  considering these  premises, judgment OBJECTED   TO   STIPULATIONS   WITH   RESPECT
is hereby rendered: TO   PRICE,   OBJECT   AND   TERMS   OF  PAYMENT
IN THE CONTRACT TO SELL ALREADY SIGNED
1.   Dismissing   the   complaint   and   ordering   the
BY   THE   PETITIONER,   RESPONDENT   MR.
cancellation of the Notice of Lis Pendens by reason of
CAMAISA   AND   WITNESSES   MARKED   AS
its filing on TCT Nos. (464860) S­8724 and (464861)
ANNEX  "G" IN THE COMPLAINT EXCEPT, FOR
S­8725 of the Registry of Deeds at Makati and on TCT
MINOR   PROVISIONS   ALREADY   IMPLIED   BY
Nos. 295976 and 295971 of the Registry of Rizal.
LAW,   LIKE   EJECTMENT   OF   TENANTS,
2. Ordering plaintiff Thelma A. Jader to pay defendant SUBDIVISION   OF   TITLE   AND   RESCISSION   IN
spouses   Norma   and   Edilberto   Camaisa,   FIFTY CASE   OF   NONPAYMENT,   WHICH   PETITIONER
THOUSAND   (₱50,000.00)   as   Moral   Damages   and READILY   AGREED   AND   ACCEDED   TO   THEIR
FIFTY THOUSAND (₱50,000.00) as Attorney's Fees. INCLUSION;
Costs against plaintiff.22 THE   HONORABLE   COURT   OF   APPEALS
GRIEVIOUSLY   ERRED   WHEN   IT   FAILED   TO
Petitioner,   thus,   elevated   the   case   to   the   Court   of   Appeals.   On
CONSIDER   THAT   CONTRACT   OF   SALE   IS
November 29, 2000, the Court of Appeals affirmed the dismissal
CONSENSUAL   AND   IT   IS   PERFECTED   BY   THE
by the trial court but deleted the award of ₱50,000.00 as damages
MERE   CONSENT   OF   THE   PARTIES   AND   THE
and ₱50,000.00 as attorney's fees.
APPLICABLE PROVISIONS ARE ARTICLES 1157,
The Court of Appeals explained that the properties subject of the 1356,   1357,   1358,   1403,   1405   AND   1475   OF   THE
contracts were conjugal properties and as such, the consent of both CIVIL   CODE   OF   THE   PHILIPPINES   AND
spouses   is   necessary   to   give   effect   to   the   sale.   Since   private GOVERNED BY THE STATUTE OF FRAUD.23
respondent Norma Camaisa refused to sign the contracts, the sale
The Court does not find error in the decisions of both the trial court
was never perfected. In fact, the downpayment was returned by
and the Court of Appeals.
respondent spouses and was accepted by petitioner. The Court of
Appeals also stressed that the authority of the court to allow sale or Petitioner   alleges   that   the   trial   court   erred   when   it   entered   a
encumbrance   of  a   conjugal  property  without   the   consent  of   the summary judgment in favor of respondent spouses there being a
other spouse is applicable only in cases where the said spouse is genuine issue of fact. Petitioner maintains that the issue of whether
60
the contracts to sell between petitioner and respondent spouses was offer   is   withdrawn   by   either   or   both   offerors.
perfected is a question of fact necessitating a trial on the merits. (Underscoring ours.)

The Court does not agree. A summary judgment is one granted by The properties subject of the contracts in this case were conjugal;
the court upon motion by a party for an expeditious settlement of a hence, for the contracts to sell to be effective, the consent of both
case, there appearing from the pleadings, depositions, admissions husband and wife must concur.
and affidavits that there are no important questions or issues of fact
Respondent Norma Camaisa admittedly did not give her written
involved,   and   that   therefore   the   moving   party   is   entitled   to
consent to the sale. Even granting that respondent Norma actively
judgment as a matter of law.24 A perusal of the pleadings submitted
participated in negotiating for the sale of the subject properties,
by both parties show that there is no genuine controversy as to the
which she denied, her written consent to the sale is required by law
facts involved therein.
for its validity. Significantly, petitioner herself admits that Norma
Both parties admit that there were negotiations for the sale of four refused to sign the contracts to sell. Respondent Norma may have
parcels   of  land  between  petitioner  and  respondent  spouses;  that been   aware   of   the   negotiations   for   the   sale   of   their   conjugal
petitioner and respondent Edilberto Camaisa came to an agreement properties. However, being merely aware of a transaction is not
as to the price and the terms of payment, and a downpayment was consent.25
paid by petitioner to the latter; and that respondent Norma refused
Finally,   petitioner   argues   that   since   respondent   Norma   unjustly
to sign the contracts to sell. The issue thus posed for resolution in
refuses   to   affix   her   signatures   to   the   contracts   to   sell,   court
the  trial court was whether  or not the contracts to sell between
authorization under Article 124 of the Family Code is warranted.
petitioner and respondent spouses were already perfected such that
the latter could no longer back out of the agreement. The argument is bereft of merit. Petitioner is correct insofar as she
alleges that if the written consent of the other spouse cannot be
The law requires that the disposition of a conjugal property by the
obtained or is being withheld, the matter may be brought to court
husband as administrator in appropriate cases requires the written
which will  give   such  authority  if  the   same   is warranted  by the
consent of   the   wife,   otherwise,   the   disposition   is   void.   Thus,
circumstances.   However,   it   should   be   stressed   that   court
Article 124 of the Family Code provides:
authorization under Art. 124 is only resorted to in cases where the
Art.   124.   The   administration   and   enjoyment   of   the spouse who does not give consent is incapacitated.26
conjugal   partnership   property   shall   belong   to   both
In this case, petitioner failed to allege and prove that respondent
spouses jointly. In case of disagreement, the husband's
Norma was incapacitated to give her consent to the contracts. In
decision shall prevail, subject to recourse to the court
the   absence   of   such   showing   of   the   wife's   incapacity,   court
by the wife for a proper remedy, which must be availed
authorization cannot be sought.
of   within   five   years   from   the   date   of   the   contract
implementing such decision. Under the foregoing facts, the motion for summary judgment was
proper   considering   that   there   was   no   genuine   issue   as   to   any
In   the   event   that   one   spouse   is   incapacitated   or
material fact. The only issue to be resolved by the trial court was
otherwise unable to participate in the administration of
whether the contract to sell involving conjugal properties was valid
the conjugal properties, the other spouse may assume
without the written consent of the wife.
sole   powers   of   administration. These   powers   do   not
include   the   powers   of   disposition   or   encumbrance WHEREFORE, the petition is hereby DENIED and the decision
which   must   have   the   authority   of   the   court   or   the of the Court of Appeals dated November 29, 2000 in CA­G.R. CV
written consent of the other spouse. In the absence of No. 43421 AFFIRMED.
such   authority   or   consent   the   disposition   or
encumbrance   shall   be   void. However,   the   transaction SO ORDERED.
shall be construed as a continuing offer on the part of
Davide, Jr., C.J., (Chairman), Puno, Pardo, and Ynares­Santiago,
the consenting spouse and the third person, and may be
JJ., concur.
perfected as a binding contract upon the acceptance by
the other spouse or authorization by the court before the

61
 Republic of the Philippines
SUPREME COURT
SECOND DIVISION
G.R. No. 153802. March 11, 2005
HOMEOWNERS SAVINGS & LOAN BANK, Petitioner,
vs.
MIGUELA C. DAILO, Respondents.
D E C I S I O N
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. SP­4748 (97).
The following factual antecedents are undisputed.
Respondent   Miguela   C.   Dailo   and   Marcelino   Dailo,   Jr.   were
married  on  August  8,  1967.  During  their   marriage,  the   spouses
purchased a house and lot situated at Barangay San Francisco, San
Pablo City from a certain Sandra Dalida. The subject property was
declared for  tax assessment purposes under Assessment of Real
Property No. 94­051­2802. The Deed of Absolute Sale, however,
was   executed   only   in   favor   of   the   late   Marcelino   Dailo,   Jr.   as
vendee thereof to the exclusion of his wife.3
On  December   1,  1993,  Marcelino  Dailo,  Jr.  executed  a   Special
Power   of   Attorney   (SPA)   in   favor   of   one   Lilibeth   Gesmundo,
authorizing the latter to obtain a loan from petitioner Homeowners
Savings and Loan Bank to be secured by the spouses Dailo’s house
and   lot   in   San   Pablo   City.   Pursuant   to   the   SPA,   Gesmundo
obtained a loan in the amount of ₱300,000.00 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 (b) The Certificate of Sale executed by Notary Public Reynaldo
knowledge and consent of respondent.4 Alcantara on April 20, 1995.
Upon   maturity,   the   loan   remained   outstanding.   As   a   result, (c) The Affidavit of Consolidation of Ownership executed by the
petitioner   instituted   extrajudicial   foreclosure   proceedings   on   the defendant
mortgaged   property.   After   the   extrajudicial   sale   thereof,   a
Certificate of Sale was issued in favor of petitioner as the highest (c) The Affidavit of Consolidation of Ownership executed by the
bidder.   After   the   lapse   of   one   year   without   the   property   being defendant over the residential lot located at Brgy. San Francisco,
redeemed, petitioner, through its vice­president, consolidated the San Pablo City, covered by ARP No. 95­091­1236 entered as Doc.
ownership thereof by executing on June 6, 1996 an Affidavit of No. 406; Page No. 83, Book No. III, Series of 1996 of  Notary
Consolidation of Ownership and a Deed of Absolute Sale.5 Public Octavio M. Zayas.
In the meantime, Marcelino Dailo, Jr. died on December 20, 1995. (d) The assessment of real property No. 95­051­1236.
In one of her visits to the subject property, respondent learned that
petitioner had already employed a certain Roldan Brion to clean its
2. The defendant is ordered to reconvey the property subject of this
premises and that her car, a Ford sedan, was razed because Brion
complaint to the plaintiff.
allowed a boy to play with fire within the premises.
ON THE SECOND CAUSE OF ACTION
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 1.   The   defendant   to   pay   the   plaintiff   the   sum   of  ₱40,000.00
City,   Civil   Case   No.   SP­2222   (97)   for Nullity   of   Real   Estate representing the value of the car which was burned.
Mortgage   and   Certificate   of   Sale,  Affidavit   of  Consolidation   of
Ownership,   Deed   of   Sale,   Reconveyance   with   Prayer   for ON BOTH CAUSES OF ACTION
Preliminary   Injunction   and   Damages against   petitioner.   In   the
latter’s Answer   with   Counterclaim,   petitioner   prayed   for   the 1. The  defendant to pay the  plaintiff  the  sum  of  ₱25,000.00 as
dismissal   of   the   complaint   on   the   ground   that   the   property   in attorney’s fees;
question was the exclusive property of the late Marcelino Dailo, Jr.
2. The defendant to pay plaintiff ₱25,000.00 as moral damages;
After   trial   on   the   merits,   the   trial   court   rendered   a Decision on
October 18, 1997. The dispositive portion thereof reads as follows:
3. The  defendant to pay the  plaintiff  the  sum  of  ₱10,000.00 as
exemplary damages;
WHEREFORE, the plaintiff having proved by the preponderance
of evidence the allegations of the Complaint, the Court finds for
4. To pay the cost of the suit.
the plaintiff and hereby orders:
The counterclaim is dismissed.
ON THE FIRST CAUSE OF ACTION:
SO ORDERED.6
1. The declaration of the following documents as null and void:
Upon elevation of the case to the Court of Appeals, the appellate
(a) The Deed of Real Estate Mortgage dated December 1, 1993
court affirmed the trial court’s finding that the subject property was
executed   before   Notary   Public   Romulo   Urrea   and   his   notarial
conjugal in nature, in the absence of clear and convincing evidence
register entered as Doc. No. 212; Page No. 44, Book No. XXI,
to rebut the presumption that the subject property acquired during
Series of 1993.
62
the   marriage   of   spouses   Dailo   belongs   to   their   conjugal
partnership.7 The appellate court declared as void the mortgage on
the   subject   property   because   it   was   constituted   without   the
knowledge and consent of respondent, in accordance with Article
124 of the Family Code. Thus, it upheld the trial court’s order to
reconvey the subject property to respondent. 8 With respect to the
damage to respondent’s car, the appellate court found petitioner to
be liable therefor because it is responsible for the consequences of
the   acts   or   omissions   of   the   person   it   hired   to   accomplish   the
assigned   task.9 All   told,   the   appellate   court   affirmed   the   trial
court’s Decision, but deleted the award for damages and attorney’s
fees for lack of basis.10
Hence, this petition, raising the following issues for this Court’s
consideration:
1. WHETHER OR NOT THE MORTGAGE CONSTITUTED BY
THE   LATE   MARCELINO   DAILO,   JR.   ON   THE   SUBJECT
PROPERTY AS CO­OWNER 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 co­owner 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 co­owners, 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   co­ownership   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 co­ownership apply in
a suppletory manner,18 the conjugal partnership shall be governed
63
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 co­ownership under Article 493
of the Civil Code does. Where the law does not distinguish, courts
should not distinguish.20 Thus, both the trial court and the appellate
court are correct in declaring the nullity of the real estate mortgage
on the subject property for lack of respondent’s consent.
Second,   petitioner   imposes   the   liability   for   the   payment   of   the
principal obligation obtained by the late Marcelino Dailo, Jr. on the
conjugal partnership to the extent that it redounded to the benefit
of the family.21
Under Article 121 of the Family Code, "[T]he conjugal partnership
shall be liable for: . . . (3) Debts and obligations contracted by
either spouse without the consent of the other to the extent that the
family may have been benefited; . . . ." For the subject property to
be   held   liable,   the   obligation   contracted   by   the   late   Marcelino
Dailo,   Jr.   must   have   redounded   to   the   benefit   of   the   conjugal
partnership.   There   must   be   the   requisite   showing   then   of   some
advantage   which  clearly   accrued  to   the   welfare   of   the   spouses.
Certainly, to make a conjugal partnership respond for a liability
that should appertain to the husband alone is to defeat and frustrate
the avowed objective of the new Civil Code to show the utmost
concern for the solidarity and well­being 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   creditor­party
litigant claiming as such.23 Ei incumbit probatio qui dicit, non qui
negat (he   who   asserts,   not   he   who   denies,   must
prove).24 Petitioner’s sweeping conclusion  that the  loan obtained
by   the   late   Marcelino   Dailo,   Jr.   to   finance   the   construction   of
housing   units   without   a   doubt   redounded   to   the   benefit   of   his
family, without adducing adequate proof, does not persuade this
Court. Other than petitioner’s bare allegation, there is nothing from
the records of the case to compel a finding that, indeed, the loan
obtained by the late Marcelino Dailo, Jr. redounded to the benefit
of the  family. Consequently, the  conjugal partnership cannot be
held liable for the payment of the principal obligation.

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

WHEREFORE, the petition is DENIED. Costs against petitioner.

SO ORDERED.

Puno,   (Chairman),   Austria­Martinez,   Callejo,   Sr.,   and   Chico­

Nazario, JJ., concur.

64
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 190846 February 3, 2016
TOMAS P. TAN, JR., Petitioner,
vs.
JOSE G. HOSANA, Respondent.
D E C I S I O N
BRION, J.:
1
Before   us   is   a   petition   for   review   on certiorari  challenging   the
August 28, 2009 decision2 and November 17, 2009 resolution3 of
the Court of Appeals (CA) in CA­G.R. CV No. 88645.
The Facts
The   respondent   Jose   G.   Hosana (Jose) married   Milagros   C.
Hosana (Milagros) on   January   14,   1979.4 During   their   marriage,
Jose and Milagros bought a house and lot located at Tinago, Naga
City,   which   lot   was   covered   by   Transfer   Certificate   of
Title (TCT) No. 21229.5
On January 13, 1998, Milagros sold to the  petitioner  Tomas P.
Tan, Jr. (Tomas) the subject property, as evidenced by a deed of
sale executed by Milagros herself and as attorney­in­fact of Jose,
by virtue of a Special Power of Attorney (SPA) executed by Jose in
her favor.6 The Deed of Sale stated that the purchase price for the
lot   was   P200,000.00.7 After   the   sale,   TCT   No.   21229   was
cancelled and TCT No. 32568 was issued in the name of Tomas.8
On  October   19,  2001,  Jose  filed  a Complaint  for  Annulment  of
Sale/Cancellation   of   Title/Reconveyance   and   Damages against
Milagros, Tomas, and the Register of Deeds of Naga City. 9 The
complaint was filed before the Regional Trial Court (RTC), Branch
62, Naga City. In the complaint, Jose averred that while he was
working in Japan, Milagros, without his consent and knowledge,
conspired   with   Tomas   to   execute   the   SPA   by   forging   Jose’s
signature making it appear that Jose had authorized Milagros to
sell the subject property to Tomas.10
In his Answer, Tomas maintained that he was a buyer in good faith
and for value.11 Before he paid the full consideration of the sale,
Tomas claimed he sought advice from his lawyer­friend who told
him   that   the   title   of   the   subject   lot   was   authentic   and   in
order.12 Furthermore, he alleged that the SPA authorizing Milagros
to sell the property was annotated at the back of the title.13
Tomas   filed   a   cross­claim   against   Milagros   and   claimed
compensatory and moral damages, attorney’s fees, and expenses
for litigation, in the event that judgment be rendered in favor of
Jose.14
The RTC declared Milagros in default for her failure to file her
answer to Jose’s complaint and Tomas’ cross­claim. 15 On the other
hand, it dismissed Tomas’ complaint against the Register of Deeds
since it was only a nominal party.16
After the pre­trial conference, trial on the merits ensued.17
Jose presented his brother, Bonifacio Hosana (Bonifacio), as sole
witness.   Bonifacio   testified   that   he   learned   of   the   sale   of   the
subject property from Milagros’ son.18 When Bonifacio confronted
Milagros that Jose would get angry because of the sale, Milagros
retorted that she sold the property because she needed the money.
Bonifacio immediately informed Jose, who was then in Japan, of
the sale.19
Jose was furious when he learned of the sale and went back to the
Philippines. Jose and Bonifacio verified with the Register of Deeds
and discovered that the title covering the  disputed property had
been transferred to Tomas.20
Bonifacio further   testified  that Jose’s signature   in  the   SPA  was
forged.21 Bonifacio presented documents containing the signature
of Jose  for comparison: Philippine  passport, complaint­affidavit,
duplicate original of  SPA dated 16 February 2002, notice  of lis
pendens,   community   tax   certificate,   voter’s   affidavit,   specimen
signatures, and a handwritten letter.22
On the other hand, Tomas submitted his own account of events as
corroborated   by   Rosana   Robles   (Rosana),   his   goddaughter.
65
Sometime in December 1997, Tomas directed Rosana to go to the
house   of   Milagros   to   confirm   if   Jose   knew   about   the   sale
transaction. Through a phone call by Milagros to Jose, Rosana was
able to talk to Jose who confirmed that he was aware of the sale
and had given his wife authority to proceed with the sale. Rosana
informed Tomas of Jose’s confirmation.23
With the assurance that all the documents were in order, Tomas
made a partial payment of P350,000.00 and another P350,000.00
upon the execution of the Deed of Absolute Sale (Deed of Sale).
Tomas noticed that the consideration written by Milagros on the
Deed of Sale was only P200,000.00; he inquired why the written
consideration   was   lower   than   the   actual   consideration   paid.
Milagros explained that it was done to save on taxes. Tomas also
learned from Milagros that she needed money badly and had to sell
the house because Jose had stopped sending her money.24
The RTC Ruling
In  its   decision   dated  December   27,  2006, 25 the   RTC   decided  in
favor   of   Jose   and   nullified   the   sale   of   the   subject   property   to
Tomas. The RTC held that the SPA dated June 10, 1996, wherein
Jose  supposedly  appointed  Milagros as his  attorney­in­fact, was
actually null and void.
Tomas   and   Milagros   were   ordered   to   jointly   and   severally
indemnify Jose the amount of P20,000.00 as temperate damages.26
The CA Ruling
Tomas appealed the RTC’s ruling to the CA.
In a decision dated August 28, 2009, 27 the CA affirmed the RTC
ruling that the deed of sale and the SPA were void. However, the
CA modified the judgment of the RTC: first, by deleting the award
of temperate damages; and second, by directing Jose and Milagros
to   reimburse   Tomas   the   purchase   price   of   P200,000.00,   with
interest, under the principle of unjust enrichment. Despite Tomas’
allegation   that   he   paid   P700,000.00   for   the   subject   lot,   the   CA
found that there was no convincing evidence that established this
claim.28
Tomas filed a motion for the reconsideration of the CA decision on
the ground that the amount of P200,000.00 as reimbursement for
the purchase price of the house and lot was insufficient and not
supported by the evidence formally offered before and admitted by
the   RTC.   Tomas   contended   that   the   actual   amount   he   paid   as
consideration for the sale was P700,000.00, as supported by his
testimony before the RTC.29
The CA denied the motion for reconsideration for lack of merit" in
a resolution dated November 17, 2009.30
The Petition
Tomas   filed   the   present   petition   for   review   on certiorari to
challenge   the   CA   ruling   which   ordered   the   reimbursement   of
P200,000.00 only, instead of the actual purchase price he paid in
the amount of P700,000.00.31
Tomas argues that, first, all matters contained in the deed of sale,
including   the   consideration   stated,   cannot   be   used   as   evidence
since it was declared null and void; second, the deed of sale was
not  specifically  offered  to  prove  the  actual  consideration  of   the
sale;32 third, his testimony establishing the actual purchase price of
P700,000.00   paid   was   uncontroverted;33 and,   fourth,   Jose   must
return the full amount actually paid under the principle of solutio
indebiti.34
Jose, on the other hand, argues that first, Jose is estopped from
questioning the purchase price indicated in the deed of dale for
failing to immediately raise this question; and second, the terms of
an agreement reduced into writing are deemed to include all the
terms agreed upon and no other evidence can be admitted other
than the terms of the agreement itself.35
The Issues
The core issues are (1) whether the deed of sale can be used as the
basis for the amount of consideration paid; and (2) whether the
testimony of Tomas is sufficient to establish the actual purchase
price of the sale.
OUR RULING
We affirm the CA ruling and deny the petition.
Whether   Tomas   paid   the   purchase   price   of   P700,000.00   is   a
question of fact not proper in a petition for review on certiorari.
Appreciation   of   evidence   and   inquiry   on   the   correctness   of   the
appellate court's factual findings are not the functions of this Court,
as we are not a trier of facts.36
This Court does not address questions of fact which require us to
rule  on "the  truth or  falsehood of  alleged facts,"37 except in the
following cases:
(1)   when   the   findings   are   grounded   entirely   on   speculations,
surmises, or conjectures; (2) when the inference made is manifestly
mistaken, absurd, or impossible; (3) when there is a grave abuse of
discretion; (4) when the judgment is based on misappreciation of
facts; (5) when the findings of fact are conflicting; (6) when in
making its findings, the same  are contrary to the  admissions of
both appellant and appellee; (7) when the findings are contrary to
those   of   the   trial   court;   (8)   when   the   findings   are   conclusions
without citation of specific evidence on which they are based; (9)
when the facts set forth in the petition as well as in the petitioner’s
main and reply briefs are not disputed by the respondent; and (10)
when the findings of fact are premised on the supposed absence of
evidence and contradicted by the evidence on record.38
The present case does not fall under any of these exceptions.
Whether Tomas sufficiently proved that he paid P700,000.00 for
the subject property is a factual question that the CA had already
resolved in the negative.39 The CA found Tomas’ claim of paying
P700,000.00 for the subject property to be unsubstantiated as he
failed to tender any convincing evidence to establish his claim.
We uphold the CA’s finding.
In civil cases, the basic rule is that the party making allegations has
the   burden   of   proving   them   by   a   preponderance   of
evidence.40 Moreover, the parties must rely on the strength of their
own evidence, not upon the weakness of the defense offered by
their opponent.41
Preponderance of evidence is the weight, credit, and value of the
aggregate evidence on either side and is usually considered to be
synonymous   with   the   term   "greater   weight   of   the   evidence"   or
"greater   weight   of   the   credible   evidence."42 Preponderance   of
evidence is a phrase that, in the last analysis, means probability of
66
the truth. It is evidence that is more convincing to the court as it is
worthier of belief than that which is offered in opposition thereto.43
We agree with the CA  that Tomas’ bare allegation that he paid
Milagros the sum of P700,000.00 cannot be considered as proof of
payment, without any other convincing evidence to establish this
claim.   Tomas’   bare   allegation,   while   uncontroverted,   does   not
automatically entitle it to be given weight and credence.
It is settled in jurisprudence that one who pleads payment has the
burden of proving it;44 the burden rests on the defendant to prove
payment, rather  than  on the  plaintiff   to prove  non­payment. 45 A
mere allegation is not evidence,46 and the person who alleges has
the   burden   of   proving   his   or   her   allegation   with   the   requisite
quantum   of   evidence,   which   in   civil   cases   is   preponderance   of
evidence.
The force and effect of a void contract is distinguished from its
admissibility as evidence.
The   next   question   to   be   resolved   is   whether   the   CA   correctly
ordered   the   reimbursement   of   P200,000.00,   which   is   the
consideration stated in the Deed of Sale, based on the principle of
unjust enrichment.
The   petitioner   argues   that   the   CA   erred   in   relying   on   the
consideration   stated   in   the   deed   of   sale   as   basis   for   the
reimbursable amount because a null and void document cannot be
used as evidence.
We find no merit in the petitioner’s argument.
A void or inexistent contract has no force and effect from the very
beginning.47 This rule applies to contracts that are declared void by
positive   provision   of   law,   as   in   the   case   of   a   sale   of   conjugal
property   without   the   other   spouse’s   written   consent.48 A   void
contract is equivalent to nothing and is absolutely wanting in civil
effects.49 It   cannot   be   validated   either   by   ratification   or
prescription.50 When, however, any of the terms of a void contract
have   been   performed,   an   action   to   declare   its   inexistence   is
necessary to allow restitution of what has been given under it.51
It is basic that if a void contract has already "been performed, the
restoration  of  what  has been  given  is  in  order." 52 This  principle
springs from Article 22 of the New Civil Code which states that
"every person who through an act of performance by another, or
any other means, acquires or comes into possession of something
at the expense of the latter without just or legal ground, shall return
the same." Hence, the restitution of what each party has given is a
consequence of a void and inexistent contract.
While   the   terms   and   provisions   of   a   void   contract   cannot   be
enforced  since  it   is  deemed  inexistent,  it   does  not  preclude   the
admissibility   of   the   contract   as   evidence   to   prove   matters   that
occurred  in  the  course   of   executing   the  contract, i.e., what  each
party has given in the execution of the contract.
Evidence is the means of ascertaining in a judicial proceeding the
truth   respecting   a   matter   of   fact,   sanctioned   by   the   Rules   of
Court.53 The  purpose  of  introducing  documentary  evidence   is  to
ascertain the truthfulness of a matter at issue, which can be the
entire content or a specific provision/term in the document.
The deed of sale as documentary evidence may be used as a means
to   ascertain   the   truthfulness   of   the   consideration   stated   and   its
actual payment. The  purpose  of  introducing the deed of  sale as
evidence is not to enforce the terms written in the contract, which
is an obligatory force and effect of a valid contract. The deed of
sale, rather, is used as a means to determine matters that occurred
in the execution of such contract, i.e., the determination of what
each party has given under the void contract to allow restitution
and prevent unjust enrichment.
Evidence is admissible when it is relevant to the issue and is not
excluded by the law of these rules.54 There is no provision in the
Rules   of   Evidence   which   excludes   the   admissibility   of   a   void
document. The Rules only require that the evidence is relevant and
not excluded by the Rules for its admissibility.55
Hence,   a   void   document   is   admissible   as   evidence   because   the
purpose   of   introducing   it   as   evidence   is   to   ascertain   the   truth
respecting   a   matter   of   fact,   not   to   enforce   the   terms   of   the
document itself.
It   is   also   settled   in   jurisprudence   that   with   respect   to   evidence
which   appears   to   be   of doubtful relevancy,   incompetency,   or
admissibility, the safer policy is to be liberal and not reject them on
doubtful   or   technical   grounds,   but   admit   them   unless   plainly
irrelevant,   immaterial,   or   incompetent;   for   the   reason   that   their
rejection places them beyond the consideration of the court, if they
are thereafter found relevant or competent. On the other hand, their
admission, if they turn out later to be irrelevant or incompetent,
can easily be remedied by completely discarding them or ignoring
them.56
In the present case, the deed of sale was declared null and void by
positive   provision   of   the   law   prohibiting   the   sale   of   conjugal
property   without   the   spouse’s   consent.1âwphi1 It   does   not,
however,   preclude   the   possibility   that   Tomas   paid   the
consideration stated therein. The admission of the deed of sale as
evidence is consistent with the liberal policy of the court to admit
the evidence which appears to be relevant in resolving an issue
before the courts.
An offer to prove the regular execution of the deed of sale is
basis   for  the   court   to   determine   the   presence   of   the   essential
elements of the sale, including the consideration paid.
Tomas argues that the Deed of Sale was not specifically offered to
prove the actual consideration of the sale and, hence, cannot be
considered by the court. Tomas is incorrect.
The deed of sale in the present case was formally offered by both
parties  as evidence.57 Tomas,  in fact,  formally  offered it  for  the
purpose of proving its execution and the regularity of the sale.58
The offer  of the deed of  sale to prove  its regularity necessarily
allowed the lower courts to consider the terms written therein to
determine whether all the essential elements 59 for a valid contract
of sale are present, including the consideration of the sale. The fact
that the sale was declared null and void does not prevent the court
from   relying   on   consideration   stated   in   the   deed   of   sale   to
determine the actual amount paid by the petitioner for the purpose
of preventing unjust enrichment.
Hence, the specific offer of the Deed of Sale to prove the actual
consideration of  the sale is not necessary since  it is necessarily
included in determining the regular execution of the sale.
The consideration stated in the notarized Deed of Sale is prima
facie evidence of the amount paid by the petitioner.
The   notarized   deed   of   sale   is   a   public   document   and   is prima
facie evidence of the truth of the facts stated therein.60
67
Prima facie evidence is defined as evidence good and sufficient on
its face. Such evidence as, in the judgment of the law, is sufficient
to establish a given fact, or the group or chain of facts constituting
the   party’s   claim   or   defense   and   which   if   not   rebutted   or
contradicted, will remain sufficient.61
In the present case, the  consideration stated in the deed of  sale
constitutes prima facie evidence of the amount paid by Tomas for
the transfer of the property to his name. Tomas failed to adduce
satisfactory evidence to rebut or contradict the consideration stated
as the actual consideration and amount paid to Milagros and Jose.
The deed of sale was declared null and void by a positive provision
of   law   requiring   the   consent   of   both   spouses   for   the   sale   of
conjugal property. There is, however, no question on the presence
of the consideration of the sale, except with respect to the actual
amount paid. While the deed of sale has no force and effect as a
contract,   it   remains prima   facie evidence   of   the   actual
consideration paid.
As earlier discussed, Tomas failed to substantiate his claim that he
paid to Milagros the amount of P700,000.00, instead of the amount
of   P200,000.00   stated   in   the   deed   of   sale.   No   documentary   or
testimonial evidence to prove payment of the higher amount was
presented,   apart   from   Tomas’   sole   testimony.   Tomas’   sole
testimony   of   payment   is   self­serving   and   insufficient   to
unequivocally prove  that Milagros received P700,000.00 for  the
subject property.
Hence,   the   consideration   stated   in   the   deed   of   sale   remains
sufficient evidence of the actual amount the petitioner paid and the
same   amount   which   should   be   returned   under   the   principle   of
unjust enrichment.
Unjust enrichment exists "when a person unjustly retains a benefit
at the loss of another, or when a person retains money or property
of another against the fundamental principles of justice, equity, and
good   conscience."62 The   prevention   of   unjust   enrichment   is   a
recognized public policy of the State and is based on Article 22 of
the Civil Code. 63
The principle of unjust enrichment requires Jose to return what he
or Milagros received under  the void contract which presumably
benefitted their conjugal partnership.
Accordingly, the CA correctly ordered Jose to return the amount of
P,200,000.00 since this the consideration stated in the Deed of Sale
and given credence by the lower court. Indeed, even Jose expressly
stated in his comment that Tomas is entitled to recover the money
paid  by him  in  the  amount  of   P200,000.00  as  appearing  in the
contract.

WHEREFORE, we   hereby DENY the   petition   for   review

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

SO ORDERED.

ARTURO D. BRION
Associate Justice

68
 Republic of the Philippines
SUPREME COURT
Baguio City
EN BANC
G.R. No. 178902               April 21, 2010
MANUEL O. FUENTES and LETICIA L. 
FUENTES, Petitioners,
vs.
CONRADO G. ROCA, ANNABELLE R. JOSON, ROSE  lawyer, he went to see Rosario in one of his trips to Manila and
MARIE R. CRISTOBAL and PILAR  had her sign an affidavit of consent.3 As soon as Tarciano met the
MALCAMPO, Respondents.
D E C I S I O N
ABAD, J.:
This   case   is   about   a   husband’s   sale   of   conjugal   real   property,
employing   a   challenged   affidavit   of   consent   from   an   estranged
wife.   The   buyers   claim   valid   consent,   loss   of   right   to   declare
nullity of sale, and prescription.
The Facts and the Case
Sabina  Tarroza  owned a  titled 358­square  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 prepared 2 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  ₱60,000.00 for the transfer of the lot’s title to
him.   And,   within   six   months,   Tarciano   was   to   clear   the   lot   of
structures and occupants and secure the consent of his estranged
wife, Rosario Gabriel Roca (Rosario), to the sale. Upon Tarciano’s
compliance with these conditions, the Fuentes spouses were to take
possession of the lot and pay him an additional  ₱140,000.00 or
₱160,000.00,   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
other   conditions,   Atty.   Plagata   notarized   Rosario’s   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  ₱140,000.00 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 Tarciano’s sister, Pilar R.
Malcampo,   represented   by   her   son,   John   Paul   M.   Trinidad
(collectively, the Rocas), filed an action for annulment of sale and
reconveyance of the land against the Fuentes spouses before the
Regional   Trial   Court   (RTC)   of   Zamboanga   City   in   Civil   Case
4707. The Rocas claimed that the  sale  to the  spouses was void
since Tarciano’s wife, Rosario, did not give her consent to it. Her
signature on the affidavit of consent had been forged. They thus
prayed   that   the   property   be   reconveyed   to   them   upon
reimbursement   of   the   price   that   the   Fuentes   spouses   paid
Tarciano.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
69
four­year prescriptive period for nullifying the sale on ground of
fraud had already lapsed.
Both   the   Rocas   and   the   Fuentes   spouses   presented   handwriting
experts at the trial. Comparing Rosario’s standard signature on the
affidavit with those on various documents she signed, the Rocas’
expert testified that the signatures were not written by the same
person.   Making   the   same   comparison,   the   spouses’   expert
concluded that they were.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. Plagata’s testimony remained
technically unrebutted.11
Finally, the RTC noted that Atty. Plagata’s defective notarization
of the affidavit of consent did not invalidate the sale. The law does
not require spousal consent to be on the deed of sale to be valid.
Neither   does   the   irregularity   vitiate   Rosario’s   consent.   She
personally signed the affidavit in the presence of Atty. Plagata.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. Plagata’s testimony that he saw Rosario sign the
document in  Quezon City.  Its jurat said  differently.  Also, upon
comparing the questioned signature with the specimen signatures,
the  CA noted significant variance between them. That Tarciano
and Rosario had been living separately for 30 years since 1958 also
reinforced the conclusion that her signature had been forged.
Since   Tarciano   and   Rosario   were   married   in   1950,   the   CA
concluded that their property relations were governed by the Civil
Code under which an action for annulment of sale on the ground of
lack of  spousal consent may be brought by the  wife during the
marriage within 10 years from the transaction. Consequently, the
action that the Rocas, her  heirs, brought in 1997 fell within 10
years of the January 11, 1989 sale.
Considering, however, that the sale between the Fuentes spouses
and Tarciano was merely voidable, the CA held that its annulment
entitled the spouses to reimbursement of what they paid him plus
legal interest computed from the filing of the complaint until actual
payment. Since  the  Fuentes spouses were  also builders in good
faith, they were entitled under Article 448 of the Civil Code to
payment of the value of the improvements they introduced on the
lot.  The  CA  did  not award damages in favor  of  the  Rocas and
deleted the award of attorney’s fees to the Fuentes spouses.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 Rosario’s signature on the document
of   consent   to   her   husband   Tarciano’s   sale   of   their
conjugal land to the Fuentes spouses was forged;
2. Whether or not the Rocas’ action for the declaration
of nullity of that sale to the spouses already prescribed;
and
3. Whether or not only Rosario, the wife whose consent
was not had, could bring the action to annul that sale.
The Court’s Rulings
First.   The   key   issue   in   this   case   is   whether   or   not   Rosario’s
signature on the document of consent had been forged. For, if the
signature were genuine, the fact that she gave her consent to her
husband’s sale of the conjugal land would render the other issues
merely academic.
The CA found that Rosario’s signature had been forged. The CA
observed   a   marked   difference   between   her   signature   on   the
affidavit of consent15 and her specimen signatures.16 The CA gave
no weight to Atty. Plagata’s testimony that he saw Rosario sign the
document in Manila on September 15, 1988 since this clashed with
his   declaration   in   the   jurat   that   Rosario   signed   the   affidavit   in
Zamboanga City on January 11, 1989.
The   Court   agrees   with   the   CA’s   observation   that   Rosario’s
signature strokes on the  affidavit appears heavy, deliberate, and
forced.   Her   specimen   signatures,   on   the   other   hand,   are
consistently of a lighter stroke and more fluid. The way the letters
"R" and "s" were written is also remarkably different. The variance
is obvious even to the untrained eye.
Significantly, Rosario’s specimen signatures were made at about
the time that she signed the supposed affidavit of consent. They
were,   therefore,   reliable   standards   for   comparison.   The   Fuentes
spouses   presented   no   evidence   that   Rosario   suffered   from   any
illness or disease that accounted for the variance in her signature
when she  signed the   affidavit  of  consent. Notably,  Rosario  had
been living separately from Tarciano for 30 years since 1958. And
she   resided   so   far   away   in   Manila.   It   would   have   been   quite
tempting for Tarciano to just forge her signature and avoid the risk
that she would not give her consent to the sale or demand a stiff
price for it.
What is more, Atty. Plagata admittedly falsified the jurat of the
affidavit of consent. That jurat declared that Rosario swore to the
document and signed it in Zamboanga City on January 11, 1989
when, as Atty. Plagata  testified, she  supposedly signed it about
four months earlier at her residence in Paco, Manila on September
15,   1988.   While   a   defective   notarization   will   merely   strip   the
document   of   its   public   character   and   reduce   it   to   a   private
instrument, that falsified jurat, taken together with the marks of
forgery   in   the   signature,   dooms   such   document   as   proof   of
Rosario’s consent to the sale of the land. That the Fuentes spouses
honestly   relied   on   the   notarized   affidavit   as   proof   of   Rosario’s
consent does not matter. The sale is still void without an authentic
consent.
70
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 wife’s consent. Still, if
he sold the same without his wife’s consent, the sale is not void but
merely voidable. Article 173 gave Rosario the right to have the
sale annulled during the marriage within ten years from the date of
the   sale.   Failing   in   that,   she   or   her   heirs   may   demand,   after
dissolution  of  the   marriage,  only  the  value  of  the   property  that
Tarciano fraudulently sold. Thus:
Art. 173. The wife may, during the marriage, and within ten years
from the transaction questioned, ask the courts for the annulment
of any contract of the husband entered into without her consent,
when   such   consent   is   required,   or   any   act   or   contract   of   the
husband which tends to defraud her or impair her interest in the
conjugal partnership property. Should the wife fail to exercise this
right, she or her heirs, after the dissolution of the marriage, may
demand   the   value   of   property   fraudulently   alienated   by   the
husband.
But, as already stated, the Family Code took effect on August 3,
1988. Its Chapter 4 on Conjugal Partnership of Gains expressly
superseded   Title   VI,   Book   I   of   the   Civil   Code   on   Property
Relations Between Husband and Wife.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 husband’s sale of the real property.
It simply provides that without the other spouse’s written consent
or a court order allowing the sale, the same would be void. Article
124 thus provides:
Art. 124. x x x In the event that one spouse is incapacitated or
otherwise   unable   to   participate   in   the   administration   of   the
conjugal properties, the other spouse may assume sole powers of
administration.   These   powers   do   not   include   the   powers   of
disposition or encumbrance which must have the authority of the
court or the written consent of the other spouse. In the absence of
such authority or consent, the disposition or encumbrance shall be
void. x x x
Under the provisions of the Civil Code governing contracts, a void
or   inexistent   contract   has   no   force   and   effect   from   the   very
beginning. And this rule applies to contracts that are declared void
by positive provision of law, 20 as in the case of a sale of conjugal
property   without   the   other   spouse’s   written   consent.   A   void
contract is equivalent to nothing and is absolutely wanting in civil
effects.   It   cannot   be   validated   either   by   ratification   or
prescription.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 mother’s (his wife’s) written consent.
The passage of time did not erode the right to bring such an action.
Besides, even assuming that it is the Civil Code that applies to the
transaction as the CA held, Article 173 provides that the wife may
bring an action for  annulment of  sale  on the  ground of  lack of
spousal   consent   during   the   marriage   within   10   years   from   the
transaction.   Consequently,   the   action   that   the   Rocas,   her   heirs,
brought in 1997 fell within 10 years of the January 11, 1989 sale. It
did not yet prescribe.
The Fuentes spouses of course argue that the RTC nullified the
sale   to   them   based   on   fraud   and   that,   therefore,   the   applicable
prescriptive   period   should   be   that   which   applies   to   fraudulent
transactions, namely, four years from its discovery. Since notice of
the sale may be deemed given to the Rocas when it was registered
with the Registry of Deeds in 1989, their right of action already
prescribed in 1993.
But, if there had been a victim of fraud in this case, it would be the
Fuentes spouses in that they appeared to have agreed to buy the
property upon an honest belief that Rosario’s written consent to the
sale was genuine. They had four  years then from the  time they
learned that her signature had been forged within which to file an
action to annul the sale and get back their money plus damages.
They never exercised the right.
If, on the other hand, Rosario had agreed to sign the document of
consent upon a false representation that the property would go to
their children, not to strangers, and it turned out that this was not
the   case,   then   she   would   have   four   years   from   the   time   she
discovered the fraud within which to file an action to declare the
sale void. But that is not the case here. Rosario was not a victim of
fraud or misrepresentation. Her consent was simply not obtained at
all. She lost nothing since the sale without her written consent was
void. Ultimately, the Rocas ground for annulment is not forgery
but the  lack of  written consent of their mother  to the  sale. The
forgery is merely evidence of lack of consent.
Third. The Fuentes spouses point out that it was to Rosario, whose
consent was not obtained, that the law gave the right to bring an
action to declare  void her  husband’s sale  of  conjugal land. But
here, Rosario died in 1990, the year after the sale. Does this mean
that the right to have the sale declared void is forever lost?
The answer is no. As stated above, that sale was void from the
beginning.   Consequently,   the   land   remained   the   property   of
Tarciano and Rosario despite that sale. When the two died, they
passed on the ownership of the property to their heirs, namely, the
Rocas.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
71
In   fairness   to   the   Fuentes   spouses,   however,   they   should   be
entitled, among other things, to recover from Tarciano’s heirs, the
Rocas, the ₱200,000.00 that they paid him, with legal interest until
fully paid, chargeable against his estate.
Further, the Fuentes spouses appear to have acted in good faith in
entering the land and building improvements on it. Atty. Plagata,
whom the parties mutually entrusted with closing and documenting
the transaction, represented that he got Rosario’s signature on the
affidavit of consent. The Fuentes spouses had no reason to believe
that the lawyer had violated his commission and his oath. They had
no way of knowing that Rosario did not come to Zamboanga to
give her consent. There is no evidence that they had a premonition
that the requirement of consent presented some difficulty. Indeed,
they  willingly  made   a  30 percent  down payment on  the  selling
price months earlier on the assurance that it was forthcoming.
Further,   the   notarized   document   appears   to   have   comforted   the
Fuentes   spouses   that   everything   was   already   in   order   when
Tarciano executed a deed of absolute sale in their favor on January
11, 1989. In fact, they paid the balance due him. And, acting on the
documents submitted to it, the Register of Deeds of Zamboanga
City issued a new title in the names of the Fuentes spouses. It was
only after all these had passed that the spouses entered the property
and built on it. He is deemed a possessor in good faith, said Article
526 of the Civil Code, who is not aware that there exists in his title
or mode of acquisition any flaw which invalidates it.
As possessor  in good faith,  the  Fuentes spouses were  under  no
obligation to pay for their stay on the property prior to its legal
interruption by a final judgment against them. 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 determine the amount of indemnity to which petitioner
shall fix the terms thereof. (361a) spouses Manuel and Leticia Fuentes are entitled.

The Rocas shall of course have the option, pursuant to Article 546 SO ORDERED.
of the Civil Code,25 of indemnifying the Fuentes spouses for the
costs of the improvements or paying the increase in value which ROBERTO A. ABAD
the property may have acquired by reason of such improvements. Associate Justice

WHEREFORE,   the   Court   DENIES   the   petition   and   AFFIRMS

WITH MODIFICATION the decision of the Court of Appeals in
CA­G.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 T­90,981 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  ₱200,000.00   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

72
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 206114 June 19, 2017
DOLORES ALEJO, Petitioner
vs.
SPOUSES ERNESTO CORTEZ and PRISCILLA SAN  However, 9n July 3, 1996, Jorge wrote a letter to Dolores denying
PEDRO, SPOUSES JORGE LEONARDO and JACINTA  knowledge and consent to the Kasunduan. Jorge further informed
LEONARDO and THE REGISTER OF DEEDS OF  Dolores   that   Jacinta   was   retracting   her   consent   to
BULACAN, Respondents
D E C I S I O N
TIJAM, J.:
Assailed   in   this   Petition   for   Review 1 under   Rule   45   are   the
Decision2 dated October 3, 2012 and Resolution 3 dated February
26,   2013   of   the   Court   of   Appeals 4 (CA)   in   CA­G.R.   CV   No.
95432, which reversed the Decision 5 of the Regional Trial Court
(R TC), 6 Branch 19 in the City of Malolos, Bulacan. In its assailed
Decision   and   Resolution,   the   CA   declared   void   the   parties'
agreement for the sale of a conjugal property for lack of written
consent of the husband.
The Facts and Antecedent Proceedings
At the heart of the instant controversy is a parcel of land measuring
255   square   meters   located   .at   Cut­cot,   Pulilan,   Bulacan   and
covered   by   Transfer   Certificate   of   Title   No.   T­118170.   The
property belonged to the conjugal property/absolute community of
property7 of the  respondent Spouses Jorge  and Jacinta Leonardo
(Spouses Leonardo) and upon which their residential house was
built.
It appears that sometime in March 1996, Jorge's father, Ricardo,
approached his sister, herein petitioner Dolores Alejo (Dolores), to
negotiate the sale of the subject property. 8 Accordingly, on March
29, 1996, Jacinta executed a Kasunduan with Dolores for the sale
of   the   property.   for   a   purchase   price   of   PhP500,000.   Under
the Kasunduan, Dolores was to pay PhP70,000 as down payment,,
while   PhP230,000   is   to   be   paid   on   April   30,   1996   and   the
remaining balance of PhP200,000 was to be paid before the end of
the year 1996.9 The Kasunduan was signed by Jacinta and Ricardo
as witness. Jorge, however, did not sign the agreement.
It further appears that the down payment of PhP70,000 and the
PhP230,000 were paid by Dolores10 on the dates agreed upon and
thereafter,   Dolores   was   allowed   to   possess   the   property   and
introduce improvements thereon. 11
the Kasunduan due   to   Dolores'   failure   to   comply   with   her
obligations. This was followed by another letter dated September
29, 1996 from Jorge to Dolores demanding that the latter pay the
balance of PhP200,000 on or before October 5, 1996, otherwise the
purchase price shall be increased to PhP700,000. 12 According to
Dolores, she was being compelled by Jorge to sign the agreement
but that she refused to do so. As a result, Jorge went to her house,
destroyed its water pump and disconnected the electricity. Before∙
the   officials   of   the   Barangay,   Dolores   tendered   the   balance   of
PhP200,000 but Jorge refused to accept the same. Instead, Jorge
filed   cases   for   ejectment13 and   annulment   of   sale,   reconveyance
and recovery of possession14 against her. 15 These cases were later
on dismissed by the trial court on technical grounds.
However, during the pendency of said cases, the subject property
was   sold   by   Jorge   and   Jacinta   to   respondents   Spouses   Ernesto
Cortez and Priscilla San Pedro (Spouses Cortez) under a Deed of
Absolute  Sale  dated September 4, 1998 for a purchase  price of
PhP700,000. A new transfer certificate of title was Issued in the
latter's names. At the time of said sale, Dolores was in possession
of the subject property. 16
Consequently, Dolores filed the case a quo for annulment of deed
of sale and damages against the Spouses Cortez and the Spouses
Leonardo.
The Ruling of the RTC
In its Decision, the RTC noted that while the Kasunduan patently
lacks the written consent of Jorge, the latter's acts reveal that he
later on acquiesced and accepted the same. In particular, the RTC
observed  that  Jorge   did  not s~asonably and ~xpressly  repudiate
73
the Kasunduan but   instead   demanded   from   Dolores   compliance
therewith and that he allowed Dolores to take possession of the
property. Further, the RTC noted that the case for annulment of
sale,   reconveyance   and   recovery   of   possession   filed   by   Jorge.
against   Dolores  had  been   dismissed   and   said   dismissal   attained
finality. As such, res judicata set in preventing Jorge from further
assailing the Kasunduan. 17
Accordingly,   the   RTC   declared   the Kasunduan as   a   perfected
contract   and   Dolores   as   the   rightful   owner   of   the   property.   It
further ordered the cancellation of titles issued in the names of the
Spouses Leonardo and the Spouses Cortez and the issuance of a
new title in the name of Dolores. Finally, the RTC ordered Dolores
to pay the balance of PhP200,000 and the Spouses Leonardo to pay
moral  damages,  attorney's  fees,  litigation  expenses  and  costs  of
suit. 18
In disposal, the RTC pronounced:
WHEREFORE, judgment is hereby rendered in favor of plaintiff
Dolores   Alejo   and   against   defendants   [S]pouses   Leonardo   and
Cortez, as follows:
1.) Declaring the "Kasunduan" dated March 29, 1996 a perfected
contract,  legal,  binding   and  subsisting  having  been  accepted  by
defendant Jorge Leonardo;
2.) Declaring the plaintiff the true, legal and rightful owner of the
subject property;
3.)   Declaring   TCT   Nb.   18170   in   the   names   of   Spouses   Jorge
Leonardo, Jacinta Leonardo cancelled and of no legal force and
effect;
4.) Declaring TCT No. 121491 in the names of Spouses Ernesto
Cortez and Priscilla San Pedro null and void and therefore should
be ordered cancelled and of no legal force and effect;
5.) In lieu thereof, ordering the Register of Deeds of the Province
of Bulacan to issue a new title in the name of plaintiff Dolores
Alejo;
6.)   Ordering   plaintiff   Dolores   Alejo   to   pay   defendants   Spouses
Leonardo the  sum of  Php200,000.00 to complete  her  obligation
under the "Kasunduan";
7.) Ordering defendants Spouses Leonardo to pay plaintiff the sum
of Phpl00,000.00 as and by way of moral damages;
8.) Ordering defendants Spouses Leonardo to pay plaintiff the sum
of Php50,000.00, as and by way of attorney's fees and litigation
expenses;
9.) Ordering defendants Spouses Leonardo to pay the cost of suit.
The   claim   of   Php500,000.00   actual   damages   as   well   as   Php
100,000.00 as exemplary damages are denied for lack of legal as
well as factual basis.∙ All other claims and counterclaim are denied
for lack of merit.
SO ORDERED. 19
The   Spouses   Leonardo   and   the   Spouses   Cortez   seasonably
appealed.
The Ruling of the CA
The CA granted the appeal. 20 Contrary to the findings of the R TC,
the CA held that Jorge, by imposing a new period within which
Dolores was to pay the remaining balance and by increasing the
purchase price, only qualifiedly accepted the Kasunduan. Being a
qualified acceptance, the same partakes of a counter­offer and is a
rejection   of   the   original   offer.   Consequently,   the   CA   declared
the Kasunduan as   void   absent   Jorge's   consent   and   acceptance.
Nevertheless, the CA found Dolores to be a possessor in good faith
who   is   entitled   to   reimbursement   for   the   useful   improvements
introduced on the land or to the increase in the value thereof, at the
option of the Spouses Leonardo.
The CA accordingly disposed:
WHEREFORE, the   appeal   is   hereby GRANTED. The   assailed
14 January 2010 Decision of the Regional Trial Court, Branch 19
of   Malolos   City,   Bulacan   is   her.eby REVERSED   and   SET
ASIDE. The Kasunduan dated   29   March   1996   is   hereby
declared VOID. TCT No. 121491 in the names of Spouses Cortez
and   San   Pedro   is   hereby   declared VALID   and SUBSISTING.
Appellants   Spouses   Leonardo   are   ORDERED   to   reimburse
Dolores Alejo the amount of Php300,000.00 that the latter paid to
Jacinta Leonardo, with legal interest until fully paid. Appellants
Spouses   Leonardo   are   likewise   ORDERED,   at   their   option,   to
indemnify Dolores Alejo with her expenses for introducing useful
improvements   on   the   subject   land   or   pay   the   increase   in   value
which it may have acquired by reason of those improvements, with
Alejo   entitled   to   the   right   of   retention   of   the   land   until   the
indemnity is made. Finally, the Regional Trial Court of Malolos
City, Bulacan from which this case originated is DIRECTED to
receive evidence and determine the amount of indemnity to which
appellee Dolores Alejo is entitled.
SO ORDERED.21
Dolores' motion for reconsideration was denied, hence the instant
petition.
The Issues
Dolores argues that the Spouses Leonardo's and Spouses Cortez'
appeals   ought   to   have   been   outrightly   dismissed   for   failure   to
comply   with   the   requirements   of   Section   13,   Rule   44.   On   the
substantive   issue,   Dolores   ∙   maintains   that   the Kasunduan is   a
perfected and binding contract as it was accepted by Jorge through
his   overt   acts.   She   also   argues   that   the   dismissal   of   Jorge's
complaint   for   annulment   of   sale   constitutes res   judicata thus
preventing   Jorge   from   further   questioning   the   validity   of
the Kasunduan. Finally, she contends that the Spouses Cortez were
not buyers in good faith as they knew that the property was being
occupied by other persons.
The Ruling of this Court
The petition is denied.
Dismissal   of   Appeal   Lies   within   the   Sound   Discretion   of   the
Appellate Court
Technically, the CA may dismiss the appeal for failure to comply
with the  requirements under  Sec. 13, Rule 44. Thus, Section 1,
Rule 50 provides that an appeal may be dismissed by the Court of
Appeals, on its own motion or on that of the appellee upon the
74
ground, among others, of absence of specific assignment of errors
in the appellant's brief, or of page references to the record.
Nevertheless,   it   has   been   consistently   held   that   such   provision
confers a power, not a duty, on the appellate court.22 The dismissal
is directory, not mandatory, and as such, not a ministerial duty of
the   appellate   court.23 In   other   words,   the   CA   enjoys   ample
discretion to dismiss or not to dismiss the appeal. What is more,
the exercise of such discretion is presumed to have been sound and
regular   and   it   is   thus   incumbent   upon   Dolores   to   offset   such
presumption.   Yet,   the   records   before   this   Court   do   not
satisfactorily show that the CA has gravely abused its discretion in
not   dismissing   the   Spouses   Leonardo's   and   Spouses   Cortez'
appeals.
On the contrary, We are of the view that the ends of justice will be
better served if the instant case is determined on the merits, after
full opportunity to ventilate their respective claims and defenses is
afforded to all parties. After all, it is far better to decide a case on
the merits, as the ultimate end, rather on a technicality.
The key issue in this case is whether the Kasunduan for the sale of
a   conjugal   real   property   between   Jacinta   and   Dolores   as   a
continuing   offer  has  been  converted  to  a   perfected  and  binding
contract. For, if Jorge has not accepted or consented to the said
sale, the Kasunduan is considered void rendering the other issues
raised herein merely academic.
Sale by one Spouse of Conjugal Real Property is Void Without the
Written Consent of the other Spouse
Any alienation or encumbrance of conjugal property made during
the   effectivity   of   the   Family   Code   is   governed   by   Article   124
thereof which provides:
Article   124.   The   administration   and   enjoyment   of   the   conjugal
partnership property shall belong to both spouses jointly. In case of
disagreement,   the   husband's   decision   shall   prevail,   subject   to
recourse to the court by the wife for proper remedy, which must be
availed   of   within   five   years   from   the   date   of   the   contract
implementing such decision.
In the event that one spouse is incapacitated or otherwise unable to
participate   in   the   administration   of   the   conjugal   properties,   the
other   spouse   may   assume   sole   powers   of   administration.   These
powers   do   not   include   disposition   or   encumbrance   without
authority of the court or the written consent of the other spouse. In
the   absence   of   such   authority   or   consent,   the   disposition   or
encumbrance   shall   be   void.   However,   the   transaction   shall   be
construed   as   a   continuing   offer   on   the   part   of   the   consenting
spouse and the third person, and may be perfected as a binding
contract upon the acceptance by the other spouse or authorization
by   the   court   before   the   offer   is   withdrawn   by   either   or   both
offerors. (Emphasis supplied.)
The law is therefore unequivocal when it states that the disposition
of conjugal property of one spouse sans the written consent of the
other is void. Here, it is an established fact that the Kasunduan was
entered into solely by Jacinta and signed by her alone. By plain
terms of the law therefore, the Kasunduan is void.
Nevertheless, We agree with the RTC and the CA when it held that
the void Kasunduan constitutes a continuing offer from Jacinta and
Dolores   and   that   Jorge   had   the   option   of   either   accepting   or
rejecting   the   offer   before   it   was   withdrawn   by   either,   or   both,
Jacinta and Dolores.
The point of contention is whether Jorge accepted such continuing
offer. If so, then the Kasunduan is perfected as a binding contract;
otherwise, the Kasunduan remains void .
The   RTC   opined   that   Jorge's   failure   to   expressly   repudiate
the Kasunduan and   his   demand   that   Dolores   comply   with   her
undertakings   therein   show   Jorge's  acceptance  of   the  sale   of  the
conjugal property. On the other hand, the CA noted that in varying
the terms of the Kasunduan, i.e., in the time of payment and the
purchase price, Jorge is deemed to have only qualifiedly accepted
the same.1âwphi1
We agree with the CA.
It is undisputed that after the execution of the Kasunduan, Jorge
sent two letters to Dolores: one, in forming her  that he did not
consent to the sale; and the other, demanding that' Dolores pay the
balance of the purchase price on or before October 5, 1996 and
failing which, the purchase price shall be increased to PhP700,000.
Clearly, Jorge's first letter was an outright and express repudiation
of the Kasunduan. The  second letter, while ostensibly a demand
for   compliance   with   Dolores'   obligation   under
the Kasunduan, varied its terms on material points, i.e., the date of
payment of the balance and the purchase price. Consequently, such
counter­offer cannot be construed as evidencing Jorge's consent to
or   acceptance   of   the Kasunduan for   it   is   settled   that   where   the
other spouse's putative consent to the sale of the conjugal property
appears in a separate document which does not contain the same
terms and conditions as in the first document signed by the other
spouse, a valid transaction could not have arisen.24
Neither can Jorge's subsequent letters to Dolores be treated as a
ratification   of   the Kasunduan   for the   basic   reason   that   a   void
contract is not susceptible to ratification. Nor can Jorge's alleged
participation in the negotiation for the sale of the property or his
acquiescence to Dolores' transfer to and possession of the subject
property   be   treated   as   converting∙   such   continuing   offer   into   a
binding contract as the law distinctly requires nothing less than a
written   consent   to   the   sale   for   its   validity.   Suffice   to   say   that
participation in or awareness of the negotiations is not consent. 25
As  above  intimated,  a   determination  that  the Kasunduan is  void
renders the other issues raised by Dolores academic, i.e., whether
the doctrine of res judicata applies and whether the Spouses Cortez
are buyers in bad faith; hence they merit no further discussion .
The CA Correctly Ruled that Dolores is a Possessor in Good Faith
While the Kasunduan was void from the beginning, Dolores is, in
all   fairness,   entitled   to   recover   from   the   Spouses   Leonardo   the
amount of PhP300,000 with legal Interest until fully paid.
Moreover,   the   CA   correctly   appreciated   Dolores'   standing   as   a
possessor in good faith. It appears that Dolores acted in good faith
in entering the subject property and building improvements on it.
Ricardo   represented   that   "Jacinta   and   Jorge   wanted   to   sell   the
subject property. Dolores had no reason to believe that Ricardo and
Jacinta   were   lying.   Indeed,   upon   her   own   brother's   prodding,
Dolores   willingly   parted   with   her   money   and   paid   the   down
payment on the selling price and later, a portion of the remaining
balance. The signatures of Jacinta and of Ricardo (as witness) as
well   as   her   successful   entry   to   the   property   appear   to   have
comforted Dolores that everything was in order. Article 526 of the
Civil Code provides that she is deemed a possessor in good faith,
who is not aware that there exists in her title or mode of acquisition
any flaw that invalidates it.
75
Likewise, as correctly held by the CA, Dolores, as possessor in
good   faith,   is   under   no   obligation   to   pay   for   her   stay   on   the
property prior to its legal interruption by a final judgment. She is
further   entitled   under   Article   448   to   indemnity   for   the
improvements introduced on the property with a right of retention
until   reimbursement   is   made.   The   Spouses   Leonardo   have   the
option   under   Article   546   of   the   Civil   Code   of   indemnifying
Dolores for the cost of the improvements or paying the increase in
value which the property may have  acquired by reason of such
improvements. 26
WHEREFORE, the   petition   is DENIED. The   Decision   dated
October 3, 2012 and Resolution dated February 26, 2013 of the
Court of Appeals in CA G.R. CV No. 95432 which (1) declared
void the Kasunduan dated 29 March 1996; (2) declared valid the
title issued in the  names of  Spouses Cortez and San Pedro; (3)
ordered the reimbursement of  PhP300,000 with legal interest to
Dolores Alejo; (3) ordered the Spouses
Leonardo,   at   their   option,   to   indemnify   Dolores   Alejo   of   her
expenses on the useful improvements or pay the increase in value
on  the  subject  property,  with retention  rights  until  indemnity  is
made;   and   (4)   remanded   the   case   to   the   RTC   for   purposes   of
receiving evidence and determining the amount of said indemnity
are AFFIRMED in toto.
SO ORDERED.
NOEL GIMENEZ TIJAM
Associate Justice
76
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 166496             November 9, 2006
JOSEFA BAUTISTA FERRER, Petitioner,
vs.
SPS. MANUEL M. FERRER & VIRGINIA FERRER and  Case   No.   61327.5 On   22   June   1993,   the   RTC   dismissed   the
SPS. ISMAEL M. FERRER and FLORA  same.6 The RTC found that the terms and conditions of the Deed of
FERRER, Respondents.
D E C I S I O N
CHICO­NAZARIO, 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 Order 2 dated 16
December 2002 of the Regional Trial Court (RTC), Mandaluyong
City,  Branch  212  in  Civil  Case   No.  MC02­1780.  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. MC02­1780.
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   half­brother   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 two­door apartment building.
However, it was during their marriage that payment of the loan
was made using the couple’s conjugal funds. From their conjugal
funds, petitioner posited, they constructed a warehouse on the lot.
Moreover, petitioner averred that respondent Manuel occupied one
door of the apartment building, as well as the warehouse; however,
in September 1991, he stopped paying rentals thereon, alleging that
he had acquired ownership over the property by virtue of a Deed of
Sale   executed   by   Alfredo   in   favor   of   respondents,   Manuel   and
Ismael and their spouses. TCT No. 67927 was cancelled, and TCT.
No. 2728 was issued and registered in the names of respondents.
It   is   petitioner’s   contention   that   on   2   October   1989,   when   her
husband   was   already   bedridden,   respondents   Ismael   and   Flora
Ferrer made him sign a document, purported to be his last will and
testament. The document, however, was a Deed of Sale covering
Alfredo’s   lot   and   the   improvements   thereon.   Learning   of   this
development, Alfredo filed with the RTC of Pasig, a Complaint for
Annulment of the said sale against respondents, docketed as Civil
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. L­117067, finding no reversible error committed by
the appellate court in affirming the dismissal of the RTC, affirmed
the Decision of the Court of Appeals.7
Further, in support of her Complaint, petitioner alluded to a portion
of the Decision dated 22 June 1993 of the RTC in Civil Case No.
61327, which stated, to wit:
In determining which property is the principal and which is the
accessory, the  property of  greater  value  shall be  considered the
principal. In this case, the lot is the principal and the improvements
the accessories. Since Article 120 of the Family Code provides the
rule that the ownership of accessory follows the ownership of the
principal, then the subject lot with all its improvements became an
exclusive   and   capital   property   of   Alfredo   with  an  obligation   to
reimburse the conjugal partnership of the cost of improvements at
the   time   of   liquidation   of   [the]   conjugal   partnership.   Clearly,
Alfredo has all the rights to sell the subject property by himself
without need of Josefa’s consent.8
According to petitioner, the ruling of the RTC shows that, when
Alfredo   died   on   29   September   1999,   or   at   the   time   of   the
liquidation   of   the   conjugal   partnership,   she   had   the   right   to   be
reimbursed for the cost of the improvements on Alfredo’s lot. She
alleged   that   the   cost   of   the   improvements   amounted   to
₱500,000.00;   hence,   one­half   thereof   should   be   reimbursed   and
paid   by   respondents   as   they   are   now   the   registered   owners   of
77
Alfredo’s lot. She averred that respondents cannot claim lack of
knowledge about the fact that the improvements were constructed
using conjugal funds as they had occupied one of the apartment
buildings on Alfredo’s lot, and even paid rentals to petitioner. In
addition, petitioner prayed that respondents be ordered to render an
accounting from September, 1991, on the income of the boarding
house   constructed   thereon   which   they   had   appropriated   for
themselves,  and  to   remit   one­half   thereof   as   her   share.   Finally,
petitioner sought from respondents moral and exemplary damages,
litigation and incidental expenses.
For their part, respondents filed a Motion to Dismiss,9 contending
that petitioner had no cause of action against them, and that the
cause of action was barred by prior judgment.
On 16 December 2002, the RTC rendered an Order, 10 denying the
Motion to Dismiss. According to the RTC, no pronouncement as to
the improvements constructed on Alfredo’s lot has been made in
Civil Case No. 61327, and the payment of petitioner’s share in the
conjugal   partnership   constitutes   a   separate   cause   of   action.   A
subsequent 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 amounting to lack or excess of jurisdiction on the RTC
in denying the dismissal.
On 16 August 2004, the  Court of  Appeals rendered a Decision
granting the Petition. It held that petitioner’s Complaint failed to
state a cause of action. The appellate court rationalized as follows:
[W]e believe that the instant complaint is not the proper action for
the respondent to enforce her right of reimbursement of the cost of
the improvement[s] on the subject property. As correctly pointed
out by the petitioners, the same should be made and directed in the
settlement   of   estate   of   her   deceased   husband   Alfredo   Ferrer
pursuant to Article 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   PETITIONER’S
COMPLAINT   FAILS   TO   STATE   A   CAUSE   OF
ACTION   AGAINST   THE   RESPONDENTS,   THE
LATTER   NOT   BEING   THE   PROPER   PARTIES
AGAINST   WHOM   THE   SUBJECT   ACTION   FOR
REIMBURSEMENT MUST BE DIRECTED TO.
B.   THE   HONORABLE   COURT   OF   APPEALS
ERRED   IN   RULING   THAT   THE   PUBLIC
RESPONDENT,   HON.   RIZALINA   T.   CAPCO­
UMALI,   COMMITTED   GRAVE   ABUSE   OF
DISCRETION   IN   DENYING   THE
[RESPONDENTS’]   MOTION   TO   DISMISS   FOR
FAILURE TO STATE A CAUSE OF ACTION.15
Both   arguments   raise   the   sole   issue   of   whether   the   Court   of
Appeals erred in dismissing petitioner’s Complaint for failure to
state a cause of action.
Section 1(g) Rule 1616 of the 1997 Rules of Civil Procedure makes
it clear that failure to make a sufficient allegation of a cause of
action in the complaint warrants the dismissal thereof. Section 2,
Rule 2 of the 1997 Rules of Civil Procedure defines a cause of
action as the act or omission by which a party violates the right of
another. It is the delict or the wrongful act or omission committed
by the defendant in violation of the primary right of the plaintiff.17
A cause of action has the following essential elements, viz:
(1) A right in favor of the plaintiff by whatever means
and under whatever law it arises or is created;
(2) An obligation on the part of the named defendant to
respect or not to violate such right; 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   petitioner’s
Complaint, we are convinced that the same failed to state a cause
of action.
In the case at bar, petitioner asserts a legal right in her favor by
relying on the Decision of the RTC in Civil Case No. 61327. It can
be recalled that the aforesaid case is an action for Annulment filed
by   Alfredo   and   petitioner   against   the   respondents   to   seek
annulment   of   the   Deed   of   Sale,   executed   by   Alfredo   in
respondents’ favor and covering the herein subject premises. The
Complaint was dismissed by the RTC, and subsequently affirmed
by the Court of Appeals and by this Court in G.R. No. L­117067.
78
According to petitioner, while the RTC in Civil Case No. 61327
recognized   that   the   improvements   constructed   on  Alfredo’s   lots
were deemed as Alfredo’s exclusive and capital property, the court
also held that petitioner, as Alfredo’s spouse, has the right to claim
reimbursement from the estate of Alfredo. It is argued by petitioner
that her husband had no other property, and his only property had
been sold to the respondents; hence, she has the legal right to claim
for reimbursement from the respondents who are now the owners
of   the   lot   and   the   improvements   thereon.   In   fine,   petitioner
asseverates that the Complaint cannot be dismissed on the ground
of failure to state a cause of action because the respondents have
the correlative obligation to pay the value of the improvements.
Petitioner was not able to show that there is an obligation on the
part of the respondents to respect or not to violate her right. While
we could concede that Civil Case No. 61327 made a reference to
the   right   of   the   spouse   as   contemplated   in   Article   120 22 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 owner­spouse.
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 owner­spouse,
likewise subject to reimbursement of the cost of the improvement.
The   subject   property   was   precisely   declared   as   the   exclusive
property of Alfredo on the basis of Article 120 of the Family Code.
What   is   incontrovertible   is   that   the   respondents,   despite   the
allegations contained in the Complaint that they are the buyers of
the subject premises, are not petitioner’s spouse nor can they ever
be   deemed   as   the   owner­spouse   upon   whom   the   obligation   to
reimburse  petitioner  for  her costs rested. It is the  owner­spouse
who has the obligation to reimburse the conjugal partnership or the
spouse   who   expended   the   acts   or   efforts,   as   the   case   may   be.
Otherwise stated, respondents do not have the obligation to respect
petitioner’s right to be reimbursed.
On this matter, we do not find an act or omission on the part of
respondents   in   violation   of   petitioner’s   rights.   The   right   of   the
respondents to acquire as buyers the subject premises from Alfredo
under the assailed Deed of Sale in Civil Case No. 61327 had been
laid to rest. This is because the validity of the Deed of Sale had
already been determined and upheld with finality. The same had
been similarly admitted by petitioner in her Complaint. It can be
said, thus, that respondents’ act of acquiring the subject property
by sale was not in violation of petitioner’s rights. The same can
also be said of the respondents’ objection to reimburse petitioner.
Simply,   no   correlative   obligation   exists   on   the   part   of   the
respondents to reimburse the petitioner. Corollary thereto, neither
can it be said that their refusal to reimburse constituted a violation
of   petitioner’s   rights.   As   has   been   shown   in   the   foregoing,   no
obligation   by   the   respondents   under   the   law   exists.   Petitioner’s
Complaint failed to state a cause of action against the respondents,
and   for   this   reason,   the   Court   of   Appeals   was   not   in   error   in
dismissing the same.

WHEREFORE, the Petition is DENIED. The Decision dated 16
August 2004 and the Resolution dated 17 December 2004 of the
Court   of   Appeals   in   CA   G.R.   SP.   No.  78525   are   AFFIRMED.
Costs de oficio.

SO ORDERED.

MINITA V. CHICO­NAZARIO
Associate Justice

79
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 149615 August 29, 2006
IN   RE:   PETITION   FOR   SEPARATION   OF   PROPERTY
ELENA   BUENAVENTURA   MULLER, Petitioner,
vs.
HELMUT MULLER, Respondent.
D E C I S I O N
YNARES­SANTIAGO, J.:
This   petition   for   review   on   certiorari 1 assails   the   February   26,
2001   Decision 2 of   the   Court   of   Appeals   in   CA­G.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.  Q­94­21862, which terminated the  regime   of
absolute   community   of   property   between   petitioner   and
respondent,   as   well   as   the   Resolution 4 dated   August   13,   2001
denying the motion for reconsideration.
The facts are as follows:
Petitioner   Elena   Buenaventura   Muller   and   respondent   Helmut
Muller   were   married   in   Hamburg,   Germany   on   September   22,
1989.   The   couple   resided   in   Germany   at   a   house   owned   by
respondent’s parents but decided to move and reside permanently
in the Philippines in 1992. By this time, respondent had inherited
the house in Germany from his parents which he sold and used the
proceeds for the purchase of a parcel of land in Antipolo, Rizal at
the cost of P528,000.00 and the construction of a house amounting
to   P2,300,000.00.   The   Antipolo   property   was   registered   in   the
name   of   petitioner   under   Transfer   Certificate   of   Title   No.
219438 5 of the Register of Deeds of Marikina, Metro Manila.
Due   to   incompatibilities   and   respondent’s   alleged   womanizing,
drinking, and maltreatment, the spouses eventually separated. On
September 26, 1994, respondent filed a petition 6 for separation of
properties before the Regional Trial Court of Quezon City.
On   August   12,   1996,   the   trial   court   rendered   a   decision   which
terminated the regime of absolute community of property between
the   petitioner   and   respondent.   It   also   decreed   the   separation   of
properties   between   them   and   ordered   the   equal   partition   of
personal   properties   located   within   the   country,   excluding   those
acquired by gratuitous title during the marriage. With regard to the
Antipolo   property,   the   court   held   that   it   was   acquired   using
paraphernal   funds   of   the   respondent.   However,   it   ruled   that
respondent   cannot   recover   his   funds   because   the   property   was
purchased in violation of Section 7, Article XII of the Constitution.
Thus –
However, pursuant to Article 92 of the Family Code, properties
acquired by gratuitous title by either spouse during the marriage
shall be excluded from the community property. The real property,
therefore, inherited by petitioner in Germany is excluded from the
absolute community of property of the herein spouses. Necessarily,
the proceeds of the sale of said real property as well as the personal
properties purchased thereby, belong exclusively to the petitioner.
However, the part of that inheritance  used by the  petitioner  for
acquiring the house and lot in this country cannot be recovered by
the petitioner, its acquisition being a violation of Section 7, Article
XII   of   the   Constitution   which   provides   that   "save   in   cases   of
hereditary   succession,   no   private   lands   shall   be   transferred   or
conveyed   except   to   individuals,   corporations   or   associations
qualified to acquire or hold lands of the public domain." The law
will leave the parties in the situation where they are in without
prejudice to a voluntary partition by the parties of the said real
property. x x x
x x x x
As regards the property covered by Transfer Certificate of Title
No. 219438 of the Registry of Deeds of Marikina, Metro Manila,
situated   in   Antipolo,   Rizal   and   the   improvements   thereon,   the
Court   shall   not   make   any   pronouncement   on   constitutional
grounds. 7
Respondent appealed to the Court of Appeals which rendered the
assailed decision modifying the trial court’s Decision. It held that
respondent merely prayed for reimbursement for the purchase of
the Antipolo property, and not acquisition or transfer of ownership
to him. It also considered petitioner’s ownership over the property
in   trust   for   the   respondent.   As   regards   the   house,   the   Court   of
Appeals   ruled   that   there   is   nothing   in   the   Constitution   which
80
prohibits   respondent   from   acquiring   the   same.   The   dispositive
portion of the assailed decision reads:
WHEREFORE, in view of the foregoing, the Decision of the lower
court dated August 12, 1996 is hereby MODIFIED. Respondent
Elena Buenaventura Muller is hereby ordered to REIMBURSE the
petitioner the amount of P528,000.00 for the acquisition of the land
and the amount of P2,300,000.00 for the construction of the house
situated   in   Atnipolo,   Rizal,   deducting   therefrom   the   amount
respondent   spent   for   the   preservation,   maintenance   and
development   of   the   aforesaid   real   property   including   the
depreciation cost of the house or in the alternative to SELL the
house and lot in the event respondent does not have the means to
reimburse   the   petitioner   out   of   her   own   money   and   from   the
proceeds thereof, reimburse the petitioner of the cost of the land
and   the   house   deducting   the   expenses   for   its   maintenance   and
preservation spent by the respondent. Should there be profit, the
same shall be divided in proportion to the equity each has over the
property. The case is REMANDED to the lower court for reception
of evidence as to the amount claimed by the respondents for the
preservation and maintenance of the property.
SO ORDERED. 8
Hence, the instant petition for review raising the following issues:
I
THE HONORABLE COURT OF APPEALS GRAVELY ERRED
IN   HOLDING   THAT   THE   RESPONDENT   HEREIN   IS
ENTITLED TO REIMBURSEMENT OF THE AMOUNT USED
TO PURCHASE THE LAND AS WELL AS THE COSTS FOR
THE CONSTRUCTION OF THE HOUSE, FOR IN SO RULING,
IT   INDIRECTLY   ALLOWED   AN   ACT   DONE   WHICH
OTHERWISE   COULD   NOT   BE   DIRECTLY   x   x   x   DONE,
WITHOUT DOING VIOLENCE TO THE CONSTITUTIONAL
PROSCRIPTION   THAT   AN   ALIEN   IS   PROHIBITED   FROM
ACQUIRING   OWNERSHIP   OF   REAL   PROPERTIES
LOCATED IN THE PHILIPPINES.
II
THE   COURT   OF   APPEALS   GRAVELY   ERRED   IN
SUSTAINING RESPONDENT’S CAUSE OF ACTION WHICH
IS   ACTUALLY   A   DESPERATE   ATTEMPT   TO   OBTAIN
OWNERSHIP   OVER   THE   LOT   IN   QUESTION,   CLOTHED
UNDER THE GUISE OF CLAIMING REIMBURSEMENT.
Petitioner contends that respondent, being an alien, is disqualified
to own private lands in the Philippines; that respondent was aware
of the constitutional prohibition but circumvented the same; and
that   respondent’s   purpose   for   filing   an   action   for   separation   of
property is to obtain exclusive possession, control and disposition
of the Antipolo property.
Respondent claims that he is not praying for transfer of ownership
of the Antipolo property but merely reimbursement; that the funds
paid   by   him   for   the   said   property   were   in   consideration   of   his
marriage to petitioner; that the funds were given to petitioner in
trust;   and   that   equity   demands   that   respondent   should   be
reimbursed of his personal funds.
The   issue   for   resolution   is   whether   respondent   is   entitled   to
reimbursement of the funds used for the acquisition of the Antipolo
property.
The petition has merit.
Section 7, Article XII of the 1987 Constitution states:
Save in cases of hereditary succession, no private lands shall be
transferred   or   conveyed   except   to   individuals,   corporations,   or
associations   qualified   to   acquire   or   hold   lands   of   the   public
domain.
Aliens, whether individuals or corporations, are disqualified from
acquiring   lands   of   the   public   domain.   Hence,   they   are   also
disqualified from acquiring private lands. 9 The primary purpose of
the   constitutional   provision   is   the   conservation   of   the   national
patrimony.   In   the   case   of   Krivenko   v.   Register   of   Deeds, 10 the
Court held:
Under   section   1   of   Article   XIII   of   the   Constitution,   "natural
resources, with the exception of public agricultural land, shall not
be alienated," and with respect to public agricultural lands, their
alienation   is   limited   to   Filipino   citizens.   But   this   constitutional
purpose conserving agricultural resources in the hands of Filipino
citizens may easily be defeated by the Filipino citizens themselves
who may alienate their agricultural lands in favor of aliens. It is
partly to prevent this result that section 5 is included in Article
XIII, and it reads as follows:
"Sec.   5.   Save   in   cases   of   hereditary   succession,   no   private
agricultural   land   will   be   transferred   or   assigned   except   to
individuals,  corporations,   or   associations   qualified   to   acquire   or
hold lands of the public domain in the Philippines."
This   constitutional   provision   closes   the   only   remaining   avenue
through which agricultural resources may leak into aliens’ hands. It
would   certainly   be   futile   to   prohibit   the   alienation   of   public
agricultural   lands   to   aliens   if,   after   all,   they   may   be   freely   so
alienated   upon   their   becoming   private   agricultural   lands   in   the
hands of Filipino citizens. x x x
x x x x
If the term "private agricultural lands" is to be construed as not
including residential lots or lands not strictly agricultural, the result
would   be   that   "aliens   may   freely   acquire   and   possess   not   only
residential lots and houses for themselves but entire subdivisions,
and whole towns and cities," and that "they may validly buy and
hold in their names lands of any area for building homes, factories,
industrial plants, fisheries, hatcheries, schools, health and vacation
resorts, markets, golf courses, playgrounds, airfields, and a host of
other uses and purposes that are not, in appellant’s words, strictly
agricultural."   (Solicitor   General’s   Brief,   p.   6.)   That   this   is
obnoxious to the conservative spirit of the Constitution is beyond
question.
Respondent   was   aware   of   the   constitutional   prohibition   and
expressly   admitted   his   knowledge   thereof   to   this   Court. 11 He
declared that he had the Antipolo property titled in the name of
petitioner   because   of   the   said   prohibition. 12 His   attempt   at
subsequently   asserting   or   claiming   a   right   on   the   said   property
cannot be sustained.
The Court of Appeals erred in holding that an implied trust was
created and resulted by operation of law in view of petitioner’s
marriage to respondent. Save for the exception provided in cases of
hereditary succession, respondent’s disqualification from owning
lands in the Philippines is absolute. Not even an ownership in trust
is allowed. Besides, where the purchase is made in violation of an
existing statute and in evasion of its express provision, no trust can
result in favor of the party who is guilty of the fraud. 13 To hold
81
otherwise   would   allow   circumvention   of   the   constitutional
prohibition.
Invoking the principle that a court is not only a court of law but
also a court of equity, is likewise misplaced. It has been held that
equity as a rule will follow the law and will not permit that to be
done indirectly which, because of public policy, cannot be done
directly. 14 He who seeks equity must do equity, and he who comes
into equity must come with clean hands. The latter is a frequently
stated maxim which is also expressed in the principle that he who
has done inequity shall not have equity. It signifies that a litigant
may be denied relief by a court of equity on the ground that his
conduct has been inequitable, unfair and dishonest, or fraudulent,
or deceitful as to the controversy in issue. 15
Thus, in the instant case, respondent cannot seek reimbursement on
the   ground   of   equity   where   it   is   clear   that   he   willingly   and
knowingly   bought   the   property   despite   the   constitutional
prohibition.
Further,   the   distinction   made   between   transfer   of   ownership   as
opposed to recovery of funds is a futile exercise on respondent’s
part. To allow reimbursement would in effect permit respondent to
enjoy the fruits of a property which he is not allowed to own. Thus,
it is likewise proscribed by law. As expressly held in Cheesman v.
Intermediate Appellate Court: 16
Finally,   the   fundamental   law   prohibits   the   sale   to   aliens   of
residential land. Section 14, Article XIV of the 1973 Constitution
ordains that, "Save in cases of hereditary succession, no private
land   shall   be   transferred   or   conveyed   except   to   individuals,
corporations, or associations qualified to acquire or hold lands of
the public domain." Petitioner Thomas Cheesman was, of course,
charged with knowledge of this prohibition. Thus, assuming that it
was his intention that the lot in question be purchased by him and
his wife, he acquired no right whatever over the property by virtue
of that purchase; and in attempting to acquire a right or interest in
land,   vicariously   and   clandestinely,   he   knowingly   violated   the
Constitution; the sale as to him was null and void. In any event, he
had and has no capacity or personality to question the subsequent
sale of the same property by his wife on the theory that in so doing
he is merely exercising the prerogative of a husband in respect of
conjugal property. To sustain such a theory would permit indirect
controversion of the constitutional prohibition. If the property were
to be declared conjugal, this would accord to the alien husband a
not insubstantial interest and right over land, as he would then have
a decisive vote as to its transfer or disposition. This is a right that
the Constitution does not permit him to have.

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

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

GRANTED. The Decision dated February 26, 2001 of the Court of
Appeals   in   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.   Q­94­21862   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.

CONSUELO YNARES­SANTIAGO

Associate Justice

82
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 157537               September 7, 2011
THE   HEIRS   OF   PROTACIO   GO,   SR.   and   MARTA
BAROLA, namely: LEONOR, SIMPLICIO, PROTACIO, JR.,
ANTONIO,   BEVERLY   ANN   LORRAINNE,   TITA,
CONSOLACION, LEONORA and ASUNCION, all surnamed
GO,   represented   by   LEONORA   B.   GO, Petitioners,
vs.
ESTER L. SERVACIO and RITO B. GO, Respondents.
D E C I S I O N
BERSAMIN, J.:
The disposition by sale of a portion of the conjugal property by the
surviving spouse without the prior liquidation mandated by Article
130 of the Family Code is not necessarily void if said portion has
not   yet   been   allocated   by   judicial   or   extrajudicial   partition   to
another heir of the deceased spouse. At any rate, the requirement
of prior liquidation does not prejudice vested rights.
Antecedents
On February 22, 1976, Jesus B. Gaviola sold two parcels of land
with   a   total   area   of   17,140   square   meters   situated   in   Southern
Leyte   to  Protacio  B.  Go,  Jr. (Protacio,  Jr.).  Twenty  three  years
later, or on March 29, 1999, Protacio, Jr. executed an Affidavit of
Renunciation and Waiver,1 whereby he affirmed under oath that it
was his father, Protacio Go, Sr. (Protacio, Sr.), not he, who had
purchased the two parcels of land (the property).
On November 25, 1987, Marta Barola Go died. She was the wife
of Protacio, Sr. and mother of the petitioners. 2 On December 28,
1999, Protacio, Sr. and his son Rito B. Go (joined by Rito’s wife
Dina B. Go) sold a portion of the property with an area of 5,560
square   meters   to   Ester   L.   Servacio   (Servacio)   for
₱5,686,768.00.3 On March 2, 2001, the petitioners demanded the
return of the property,4 but Servacio refused to heed their demand.
After   barangay   proceedings   failed   to   resolve   the   dispute, 5 they
sued Servacio and Rito in the Regional Trial Court in Maasin City,
Southern   Leyte   (RTC)   for   the   annulment   of   the   sale   of   the
property.
The petitioners averred that following Protacio, Jr.’s renunciation,
the  property became  conjugal property; and that the sale of the
property   to   Servacio   without   the   prior   liquidation   of   the
community property between Protacio, Sr. and Marta was null and
void.6
Servacio   and   Rito   countered   that   Protacio,   Sr.   had   exclusively
owned   the   property   because   he   had   purchased   it   with   his   own
money.7
On October 3, 2002,8 the RTC declared that the property was the
conjugal  property   of   Protacio,   Sr.   and   Marta,  not   the   exclusive
property of Protacio, Sr., because there were three vendors in the
sale to Servacio (namely: Protacio, Sr., Rito, and Dina); that the
participation of Rito and Dina as vendors had been by virtue of
their being heirs of the late Marta; that under Article 160 of the
Civil Code, the law in effect when the property was acquired, all
property   acquired   by   either   spouse   during   the   marriage   was
conjugal unless  there  was  proof   that the   property  thus  acquired
pertained   exclusively   to   the   husband   or   to   the   wife;   and   that
Protacio, Jr.’s renunciation  was  grossly  insufficient  to  rebut  the
legal presumption.9
Nonetheless,   the   RTC   affirmed   the   validity   of   the   sale   of   the
property, holding that: "xxx As long as the portion sold, alienated
or encumbered will not be allotted to the other heirs in the final
partition of the property, or to state it plainly, as long as the portion
sold does not encroach upon the legitimate (sic) of other heirs, it is
valid."10 Quoting   Tolentino’s   commentary   on   the   matter   as
authority,11 the RTC opined:
In his comment on Article 175 of the New Civil Code regarding
the   dissolution   of   the   conjugal   partnership,   Senator   Arturo
Tolentino, says" [sic]
"Alienation   by   the   survivor.   —   After   the   death   of   one   of   the
spouses,   in   case   it   is   necessary   to   sell   any   portion   of   the
community property in order to pay outstanding obligation of the
83
partnership, such sale must be made in the manner and with the
formalities established by the Rules of Court for the sale of the
property of the deceased persons. Any sale, transfer, alienation or
disposition of said property affected without said formalities shall
be null and void, except as regards the portion that belongs to the
vendor as determined in the liquidation and partition. Pending the
liquidation, the disposition must be considered as limited only to
the   contingent   share   or   interest   of   the   vendor   in   the   particular
property involved, but not to the corpus of the property.
This   rule   applies   not   only   to   sale   but   also   to   mortgages. The
alienation, mortgage or disposal of the conjugal property without
the required formality, is not however, null ab initio, for the law
recognizes their validity so long as they do not exceed the portion
which,   after   liquidation   and   partition,   should   pertain   to   the
surviving spouse who made the contract." [underlining supplied]
It seems clear from these comments of Senator Arturo Tolentino
on the provisions of the New Civil Code and the Family Code on
the alienation by the surviving spouse of the community property
that jurisprudence remains the same ­ that the alienation made by
the surviving spouse of a portion of the community property is not
wholly void ab initio despite Article 103 of the Family Code, and
shall be valid to the extent of what will be allotted, in the final
partition, to the vendor. And rightly so, because why invalidate the
sale   by   the   surviving   spouse   of   a   portion   of   the   community
property that will eventually be his/her share in the final partition?
Practically there is no reason for that view and it would be absurd.
Now here, in the instant case, the 5,560 square meter portion of the
17,140 square­meter conjugal lot is certainly mush (sic) less than
what vendors Protacio Go and his son Rito B. Go will eventually
get as their share in the final partition of the property. So the sale is
still valid.
WHEREFORE,   premises   considered,   complaint   is   hereby
DISMISSED without pronouncement as to cost and damages.
SO ORDERED.12
The RTC’s denial of their motion for reconsideration 13 prompted
the petitioners to appeal directly to the Court on a pure question of
law.
 Issue
The petitioners claim that Article 130 of the Family Code is the
applicable law; and that the sale by Protacio, Sr., et al. to Servacio
was void for being made without prior liquidation.
In contrast, although they have filed separate comments, Servacio
and   Rito   both   argue   that   Article   130   of   the   Family   Code   was
inapplicable; that the want of the liquidation prior to the sale did
not render the sale invalid, because the sale was valid to the extent
of the portion that was finally allotted to the vendors as his share;
and that the sale did not also prejudice any rights of the petitioners
as heirs, considering that what the sale disposed of was within the
aliquot portion of the property that the vendors were entitled to as
heirs.14
Ruling
The appeal lacks merit.
Article 130 of the Family Code reads:
Article 130. Upon the termination of the marriage by death, the
conjugal   partnership   property   shall   be   liquidated   in   the   same
proceeding for the settlement of the estate of the deceased.
If   no   judicial   settlement   proceeding   is   instituted,   the   surviving
spouse   shall   liquidate   the   conjugal   partnership   property   either
judicially or extra­judicially within one year from the death of the
deceased  spouse.  If   upon  the   lapse   of   the  six   month  period   no
liquidation is made, any disposition or encumbrance involving the
conjugal partnership property of the terminated marriage shall be
void.
Should   the   surviving   spouse   contract   a   subsequent   marriage
without compliance with the foregoing requirements, a mandatory
regime   of   complete   separation   of   property   shall   govern   the
property relations of the subsequent marriage.
Article 130 is to be read in consonance with Article 105 of the
Family Code, viz:
Article   105.   In   case   the   future   spouses   agree   in   the   marriage
settlements that the regime of conjugal partnership of gains shall
govern their property relations during marriage, the provisions in
this Chapter shall be of supplementary application.
The   provisions   of   this   Chapter   shall   also   apply   to   conjugal
partnerships of gains already established between spouses before
the   effectivity   of   this   Code,   without   prejudice   to   vested   rights
already acquired in accordance with the Civil Code or other laws,
as provided in Article 256. (n) [emphasis supplied]
It is clear that conjugal partnership of gains established before and
after the effectivity of the Family Code are governed by the rules
found in Chapter  4 (Conjugal Partnership of Gains) of  Title IV
(Property Relations Between Husband And Wife) of the Family
Code. Hence, any disposition of  the  conjugal property after  the
dissolution of the conjugal partnership must be made only after the
liquidation; otherwise, the disposition is void.
Before applying such rules, however, the conjugal partnership of
gains must be subsisting at the time of the effectivity of the Family
Code. There being no dispute that Protacio, Sr. and Marta were
married prior to the effectivity of the Family Code on August 3,
1988, their property relation was properly characterized as one of
conjugal partnership governed by the Civil Code. Upon Marta’s
death in 1987, the conjugal partnership was dissolved, pursuant to
Article 175 (1) of the Civil Code,15 and an implied ordinary co­
ownership ensued among Protacio, Sr. and the other heirs of Marta
with respect to her share in the assets of the conjugal partnership
pending   a   liquidation   following   its   liquidation.16 The   ensuing
implied ordinary co­ownership was governed by Article 493 of the
Civil Code,17 to wit:
Article 493. Each co­owner 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 co­owners, shall be limited to the portion which may
be allotted to him in the division upon the termination of the co­
ownership. (399)
Protacio, Sr., although becoming a co­owner with his children in
respect of Marta’s share in the conjugal partnership, could not yet
assert or claim title to any specific portion of Marta’s share without
an   actual   partition   of   the   property   being   first   done   either   by
agreement or by judicial decree. Until then, all that he had was an
ideal or abstract quota in Marta’s share. 18 Nonetheless, a co­owner
84
could sell his undivided share; hence, Protacio, Sr. had the right to
freely sell and dispose of his undivided interest, but not the interest
of his co­owners.19 Consequently, the sale by Protacio, Sr. and Rito
as co­owners without the consent of the other co­owners was not
necessarily   void,   for   the   rights   of   the   selling   co­owners   were
thereby effectively transferred, making the buyer (Servacio) a co­
owner   of   Marta’s   share.20 This   result   conforms   to   the   well­
established principle that the binding force of a contract must be
recognized as far as it is legally possible to do so (quando res non
valet ut ago, valeat quantum valere potest).21
Article 105 of the Family Code, supra, expressly provides that the
applicability of the rules on dissolution of the conjugal partnership
is   "without   prejudice   to   vested   rights   already   acquired   in
accordance   with   the Civil   Code or   other   laws."   This   provision
gives   another   reason   not   to   declare   the   sale   as   entirely   void.
Indeed, such a declaration prejudices the rights of Servacio who
had already acquired the shares of Protacio, Sr. and Rito in the
property subject of the sale.
In their separate comments,22 the respondents aver that each of the
heirs had already received "a certain allotted portion" at the time of
the   sale,  and  that   Protacio,   Sr.   and   Rito   sold   only   the   portions
adjudicated to and owned by them. However, they did not present
any public document on the allocation among her heirs, including
themselves, of specific shares in Marta’s estate. Neither did they
aver that the conjugal properties had already been liquidated and
partitioned. Accordingly, pending a partition among the heirs of
Marta,   the   efficacy   of   the   sale,   and   whether   the   extent   of   the
property   sold   adversely   affected   the   interests   of   the   petitioners
might not yet be properly decided with finality. The appropriate
recourse to bring that about is to commence an action for judicial
partition, as instructed in Bailon­Casilao v. Court of Appeals,23 to
wit:
From the foregoing, it may be deduced that since a co­owner is
entitled to sell his undivided share, a sale of the entire property by
one
co­owner without the consent of the other co­owners is not null
and   void.   However,   only   the   rights   of   the   co­owner­seller   are
transferred, thereby making the buyer a co­owner of the property.
The proper action in cases like this is not for the nullification of the
sale   or   for   the   recovery   of   possession   of   the   thing   owned   in
common from the third person who substituted the co­owner or co­
owners   who   alienated   their   shares,   but   the   DIVISION   of   the LUCAS P. BERSAMIN
common property as if it continued to remain in the possession of Associate Justice
the   co­owners   who   possessed   and   administered   it   [Mainit   v.
Bandoy, supra].

Thus, it is now settled that the appropriate recourse of co­owners in
cases where their consent were not secured in a sale of the entire
property as well as in a sale  merely of  the undivided shares of
some of the co­owners is an action for PARTITION under Rule 69
of the Revised Rules of Court. xxx24

In the meanwhile, Servacio would be a trustee for the benefit of the
co­heirs of her vendors in respect of any portion that might not be
validly sold to her. The following observations of Justice Paras are
explanatory of this result, viz:

xxx [I]f it turns out that the property alienated or mortgaged really
would   pertain   to   the   share   of   the   surviving   spouse,   then   said
transaction is valid. If it turns out that there really would be, after
liquidation, no more conjugal assets then the whole transaction is
null and void.1âwphi1 But if it turns out that half of the property
thus alienated or mortgaged belongs to the husband as his share in
the conjugal partnership, and half should go to the estate of the
wife,   then   that   corresponding   to   the   husband   is   valid,   and   that
corresponding to the other is not. Since all these can be determined
only at the time the liquidation is over, it follows logically that a
disposal made by the surviving spouse is not void ab initio. Thus, it
has been held that the sale of conjugal properties cannot be made
by the surviving spouse without the legal requirements. The sale is
void as to the share of the deceased spouse (except of course as to
that   portion   of   the   husband’s   share   inherited   by   her   as   the
surviving spouse). The buyers of the property that could not be
validly sold become trustees of said portion for the benefit of the
husband’s other heirs, the cestui que trust ent. Said heirs shall not
be   barred   by   prescription   or   by   laches   (See   Cuison,   et   al.   v.
Fernandez, et al.,L­11764, Jan.31, 1959.)25

WHEREFORE, we DENY the petition for review on certiorari;
and AFFIRM the decision of the Regional Trial Court.

The petitioners shall pay the costs of suit.

SO ORDERED.

85
 Republic of the Philippines
SUPREME COURT
Baguio City
SECOND DIVISION
G.R. No. 200274 April 20, 2016
MELECIO DOMINGO, Petitioner,
vs.
SPOUSES GENARO MOLINA and ELENA B. MOLINA,  from Melecio. Jaime further testified that Melecio never lived on
substituted by ESTER MOLINA, Respondents.
D E C I S I O N
BRION, J.:
We   resolve   the   petition   for   review   on certiorari1 filed   by   the
petitioner   Melecio   Domingo (Melecio) assailing   the   August   9,
2011 decision2 and January 10, 2012 resolution3 of  the  Court of
Appeals (CA) in CA­G.R. CV No. 94160.
THE FACTS
In   June   15,   1951,   the   spouses   Anastacio   and   Flora   Domingo
bought   a  property  in  Camiling,  Tarlac,  consisting   of   a  one­half
undivided portion over an 18, 164 square meter parcel of land. The
sale was annotated on the Original Certificate of Title (OCT) No.
16354 covering the subject property.
During   his   lifetime,   Anastacio   borrowed   money   from   the
respondent   spouses   Genaro   and   Elena   Molina (spouses
Molina). On September 10, 1978 or 10 years after Flora’s death 4,
Anastacio sold his interest over the land to the spouses Molina to
answer for his debts. The sale to the spouses Molina was annotated
at the OCT of the subject property.5 In 1986, Anastacio died.6
In May 19, 1995, the sale of Anastacio’s interest was registered
under   Transfer   Certificate   of   Title   (TCT)   No.   272967[[7   ]]and
transferred the entire one­half undivided portion of the land to the
spouses Molina.
Melecio, one of the children of Anastacio and Flora, learned of the
transfer and filed a Complaint for Annulment of Title and Recovery
of Ownership (Complaint) against the spouses Molina on May 17,
1999.8
Melecio   claims   that   Anastacio   gave   the   subject   property   to   the
spouses Molina to serve as collateral for the money that Anastacio
borrowed. Anastacio could not have validly sold the interest over
the subject property without Flora’s consent, as Flora was already
dead at the time of the sale.
Melecio also claims that Genaro Molina must have falsified the
document  transferring  Anastacio  and  Flora’s  one­half   undivided
interest over the land. Finally, Melecio asserts that he occupied the
subject property from the time of Anastacio’s death up to the time
he filed the Complaint.9
Melecio presented the testimonies of the Records Officer of the
Register  of   Deeds  of  Tarlac,  and  of  Melecio’s nephew,  George
Domingo (George).10
The   Records   Officer   testified   that   he   could   not   locate   the
instrument   that   documents   the   transfer   of   the   subject   property
ownership   from   Anastacio   to   the   spouses   Molina.   The   Records
Officer also testified that the alleged sale was annotated at the time
when   Genaro   Molina’s   brother   was   the   Register   of   Deeds   for
Camiling, Tarlac.11
George, on the other hand, testified that he has been living on the
subject property owned by Anastacio since 1986. George testified,
however,   that   aside   from   himself,   there   were   also   four   other
occupants on the subject property, namely Jaime Garlitos, Linda
Sicangco, Serafio Sicangco and Manuel Ramos.12
The spouses Molina asserted that Anastacio surrendered the title to
the subject property to answer for his debts and told the spouses
Molina that they already own half of the land. The spouses Molina
have been in possession of the subject property before the title was
registered   under   their   names   and   have   religiously   paid   the
property’s real estate taxes.
The   spouses   Molina   also   asserted   that   Melecio   knew   of   the
disputed   sale   since   he   accompanied   Anastacio   several   times   to
borrow money. The last loan was even used to pay for Melecio’s
wedding. Finally, the spouses Molina asserted that Melecio built
86
his nipa hut on the subject property only in 1999, without their
knowledge and consent.13
The spouses Molina presented Jaime Garlitos (Jaime) as their sole
witness and who is one of the occupants of the subject lot.
Jaime testified that Elena Molina permitted him to build a house on
the subject property in 1993. Jaime, together with the other tenants,
planted   fruit   bearing   trees   on   the   subject   property   and   gave
portions of their harvest to Elena Molina without any complaint
the   subject   property   and   that   only   George   Domingo,   as   the
caretaker of the spouses Molina, has a hut on the property.
Meanwhile, the spouses Molina died during the pendency of the
case and were substituted by their adopted son, Cornelio Molina.14
THE RTC RULING
The   Regional   Trial   Court   (RTC)   dismissed15 the   case   because
Melecio failed to establish his claim that Anastacio did not sell the
property to the spouses Molina.
The   RTC   also   held   that   Anastacio   could   dispose   of   conjugal
property without Flora’s consent since the sale was necessary to
answer for conjugal liabilities.
The RTC denied Melecio’s motion for reconsideration of the RTC
ruling. From this ruling, Melecio proceeded with his appeal to the
CA.
THE CA RULING
In  a  decision  dated  August  9,  2011,  the  CA  affirmed  the  RTC
ruling in toto.
The   CA   held   that   Melecio   failed   to   prove   by   preponderant
evidence that there was fraud in the conveyance of the property to
the spouses Molina. The CA gave credence to the OCT annotation
of the disputed property sale.
The   CA   also   held   that   Flora’s   death   is   immaterial   because
Anastacio only sold his rights, excluding Flora’s interest, over the
lot to the spouses Molina.1âwphi1 The CA explained that "[t]here
is no prohibition against the sale by the widower of real property
formerly belonging to the conjugal partnership of gains"16.
Finally,   the   CA   held   that   Melecio’s   action   has   prescribed.
According to the CA, Melecio failed to file the action within one
year after entry of the decree of registration.
Melecio filed a motion for reconsideration of  the CA  Decision.
The CA denied Melecio’s motion for reconsideration for lack of
merit.17
THE PETITION
Melecio   filed   the   present   petition   for   review   on certiorari to
challenge the CA ruling.
Melecio principally argues that the sale of land belonging to the
conjugal partnership without the wife’s consent is invalid.
Melecio   also   claims   that   fraud   attended   the   conveyance   of   the
subject property and the absence of any document evidencing the
alleged   sale   made   the   transfer   null   and   void.   Finally,   Melecio
claims that the action has not yet prescribed.
The respondents, on the other hand, submitted and adopted their
arguments in their Appeal Brief18.
First, Melecio’s counsel admitted that Anastacio had given the lot
title   in   payment   of   the   debt   amounting   to   Php30,000.00.   The
delivery of the title is constructive delivery of the lot itself based
on Article 1498, paragraph 2 of the Civil Code.
Second,   the   constructive   delivery   of   the   title   coupled   with   the
spouses   Molina’s   exercise   of   attributes   of   ownership   over   the
subject property, perfected the sale and completed the transfer of
ownership.
THE ISSUES
The core issues of the petition are as follows: (1) whether the sale
of   a   conjugal   property   to   the   spouses   Molina   without   Flora’s
consent   is   valid   and   legal;   and   (2)   whether   fraud   attended   the
transfer of the subject property to the spouses Molina.
OUR RULING
We deny the petition.
It is well settled that when the trial court’s factual findings have
been affirmed by the CA, the findings are generally conclusive and
binding upon the Court and may no longer be reviewed on Rule 45
petitions.19 While there are exceptions20 to this rule, the Court finds
no applicable exception with respect to the lower courts’ finding
that   the   subject   property   was   Anastacio   and   Flora’s   conjugal
property. Records before the Court show that the parties did not
dispute the conjugal nature of the property.
Melecio argues that the sale of the disputed property to the spouses
Molina is void without Flora’s consent.
We do not find Melecio’s argument meritorious.
Anastacio and Flora’s conjugal partnership was dissolved upon
Flora’s death.
There   is  no  dispute  that  Anastacio  and  Flora   Domingo   married
before the Family Code’s effectivity on August 3, 1988 and their
property relation is a conjugal partnership.21
Conjugal   partnership   of   gains   established   before   and   after   the
effectivity of the Family Code are governed by the rules found in
Chapter 4 (Conjugal Partnership of Gains) of Title IV (Property
Relations Between Husband and Wife) of the Family Code. This is
clear from Article 105 of the Family Code which states:
x x x The provisions of this Chapter shall also apply to conjugal
partnerships of gains already established between spouses before
the   effectivity   of   this   Code, without   prejudice   to   vested   rights
already acquired in accordance with the Civil Code or other laws,
as provided in Article 256.
The conjugal partnership of Anastacio and Flora was dissolved
when Flora died in 1968, pursuant to Article 175 (1) of the Civil
Code22 (now Article 126 (1) of the Family Code).
Article   130   of   the   Family   Code   requires   the   liquidation   of   the
conjugal   partnership   upon   death   of   a   spouse   and   prohibits   any
87
disposition or encumbrance of the conjugal property prior to the
conjugal partnership liquidation, to quote:
Article 130. Upon the termination of the marriage by death, the
conjugal partnership property shall be liquidated in the same
proceeding for the settlement of the estate of the deceased.
If   no   judicial   settlement   proceeding   is   instituted,   the   surviving
spouse   shall   liquidate   the   conjugal   partnership   property   either
judicially or extrajudicially within one year from the death of the
deceased spouse. If upon the lapse of the six month period no
liquidation is made, any disposition or encumbrance involving
the conjugal partnership property of the terminated marriage
shall be void. x x x (emphases supplied)
While Article 130 of the Family Code provides that any disposition
involving  the   conjugal  property  without   prior  liquidation  of   the
partnership   shall   be   void,   this   rule   does   not   apply   since   the
provisions   of   the   Family   Code   shall   be   "without   prejudice   to
vested rights already acquired in accordance with the Civil Code or
other laws."23
An   implied   co­ownership   among   Flora’s   heirs   governed   the
conjugal properties pending liquidation and partition.
In the case of Taningco v. Register of Deeds of Laguna,24 we held
that the properties of a dissolved conjugal partnership fall under
the regime of co­ownership among the surviving spouse and the
heirs of the deceased
spouse until final liquidation and partition. The surviving spouse,
however, has an actual and vested one­half undivided share of the
properties, which does not consist of determinate and segregated
properties until liquidation
and partition of the conjugal partnership.
An implied ordinary co­ownership ensued among Flora’s surviving
heirs,   including   Anastacio,   with   respect   to   Flora’s   share   of   the
conjugal   partnership   until   final   liquidation   and   partition;
Anastacio,   on   the   other   hand,   owns   one­half   of   the   original
conjugal   partnership   properties   as   his   share,   but   this   is   an
undivided interest.
Article 493 of the Civil Code on co­ownership provides:
Article 493. Each co­owner 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 co­owners, shall be limited to the
portion which may be allotted to him in the division upon the
termination of the co­ownership. (399) (emphases supplied)
Thus, Anastacio, as co­owner, cannot claim title to any specific
portion of the conjugal properties without an actual partition being
first done either by agreement or by judicial decree. Nonetheless,
Anastacio had the right to freely sell and dispose of his undivided
interest in the subject property.
The spouses Molina became co­owners of the subject property to
the extent of Anastacio’s interest.
The   OCT   annotation   of   the   sale   to   the   spouses   Molina   reads
that "[o]nly the rights, interests and participation of Anastacio
Domingo, married to Flora Dela Cruz, is hereby sold, transferred,
and   conveyed   unto   the   said   vendees   for   the   sum   of   ONE
THOUSAND   PESOS   (P1,000.00)   which pertains   to   an
undivided   one­half   (1/2)   portion and   subject   to   all   other
conditions specified in the document x x x"25 (emphases supplied).
At   the   time   of   the   sale,   Anastacio’s   undivided   interest   in   the
conjugal properties consisted of: (1) one­half of the entire conjugal
properties;   and   (2)   his   share   as   Flora’s   heir   on   the   conjugal
properties.
Anastacio, as a co­owner, had the right to freely sell and dispose of
his   undivided   interest,   but   not   the   interest   of   his   co­owners.
Consequently, Anastactio’s sale to the spouses Molina without the
consent   of   the   other   co­owners   was   not   totally   void,   for
Anastacio’s  rights   or   a   portion   thereof   were   thereby  effectively
transferred, making the spouses Molina a co­owner of the subject
property to the extent of Anastacio’s interest. This result conforms
with   the   well­established   principle   that   the   binding   force   of   a
contract must be recognized as far as it is legally possible to do so
(quando res non valet ut ago, valeat quantum valere potest).26
The spouses Molina would be a trustee for the benefit of the co­
heirs of Anastacio in respect of any portion that might belong to
the   co­heirs   after   liquidation   and   partition.   The   observations   of The CA and RTC conclusion that there is no fraud in the sale is
Justice   Paras   cited   in   the   case   of Heirs   of   Protacio   Go,   Sr.   V. supported by the evidence on record.
Servacio27 are instructive:
Melecio' s argument that no document was executed for the sale is
x  x x  [I]f   it  turns out  that  the   property  alienated  or   mortgaged negated   by   the   CA   finding   that   there   was   a   notarized   deed   of
really would pertain to the share of the surviving spouse, then said conveyance executed between Anastacio and the spouses Molina,
transaction is valid. If it turns out that there really would be, after as annotated on the OCT of the disputed property.
liquidation, no more conjugal assets then the whole transaction is
null  and void.  But if  it  turns  out that half  of  the  property  thus Furthermore, Melecio's belief that Anastacio could not have sold
alienated or mortgaged belongs to the husband as his share in the the property without his knowledge cannot be considered as proof
conjugal partnership, and half should go to the estate of the wife, of fraud to invalidate the spouses Molina's registered title over the
then   that   corresponding   to   the   husband   is   valid,   and   that subject property.30
corresponding to the other is not. Since all these can be determined
only at the time the liquidation is over, it follows logically that a
Prevailing jurisprudence uniformly holds that findings of facts of
disposal made by the surviving spouse is not void ab initio. Thus, it
the trial court, particularly when affirmed by the Court of Appeals,
has been held that the sale of conjugal properties cannot be made
are binding upon t his court. 31
by the surviving spouse without the legal requirements. The sale is
void as to the share of the deceased spouse (except of course as to
that   portion   of   the   husband’s   share   inherited   by   her   as   the Considering these findings, we find no need to discuss the other
surviving spouse). The buyers of the property that could not be issues raised by Melecio.
validly sold become trustees of said portion for the benefit of the
husband’s other heirs, the cestui que trust ent. Said heirs shall not WHEREFORE, we   hereby DENY the   petition   for   review
be barred by prescription or by laches. on certiorari. The decision dated August 9, 2011 of the Court of
Appeals in CA­G.R. CV No. 94160 is AFFIRMED.
Melecio’s   recourse   as   a   co­owner   of   the   conjugal   properties,
including the subject property, is an action for partition under Rule SO ORDERED.
69 of the Revised Rules of Court. As held in the case of Heirs of
Protacio Go, Sr., "it is now settled that the appropriate recourse of
ARTURO D. BRION
co­owners in cases where their consent were not secured in a sale
Associate Justice
of the entire property as well as in a sale merely of the undivided
shares   of   some   of   the   co­owners   is   an   action   for   PARTITION
under Rule 69 of the Revised Rules of Court."28
The sale of the subject property to the spouses Molina was not
attended with fraud.
On the issue of fraud, the lower courts found that there was no
fraud in the sale of the disputed property to the spouses Molina.
The   issue   of   fraud   would   require   the   Court   to   inquire   into   the
weight   of   evidentiary   matters   to   determine   the   merits   of   the
petition and is essentially factual in nature. It is basic that factual
questions cannot be cannot be entertained in a Rule 45 petition,
unless it falls under any of the recognized exceptions 29 found in
jurisprudence. The present petition does not show that it falls under
any of the exceptions allowing factual review.
88
89
 Republic of the Philippines
SUPREME COURT
Baguio City
THIRD DIVISION
G.R. No. 200612 April 05, 2017
RAFAEL C. UY (CABANGBANG STORE), Petitioner,
vs.
ESTATE OF VIPA FERNANDEZ, Respondent.
D E C I S I O N
REYES, J.:
This is a Petition for Review on Certiorari1 under Rule 45 of the
Rules of Court seeking to annul and set aside the Decision dated
November   26,   2010   and   Resolution3   dated   January   24,   2012
issued by the Court of Appeals (CA) in CA­G.R. SP No. 04481.
Facts
Vipa Fernandez  Lahaylahay (Vipa)  is the registered owner of  a
parcel   of   land   situated   in   Lopez   Jaena   Street,   Jaro,   Iloilo   City
covered   by   Transfer   Ce1iificate   of   Title   No.   T~26576   (subject
property).  Vipa   and  her  husband, Levi Lahaylahay (Levi),  have
two children ­ Grace Joy Somosierra (Grace Joy) and Jill Frances
Lahaylahay (Jill Frances). 
Sometime in 1990, a contract of lease was executed between Vipa
and   Rafael   Uy   (Rafael)   over   the   subject   property   and   the
improvements thereon, pursuant to which, Rafael bound himself to
pay Vipa, as consideration for the lease of the property, the amount
of   P'.3,000.00   per   month,   with   a   provision   for   a   10%   increase
every year thereafter.  3.
On   March   5,   1994,   Vipa   died   leaving   no   will   or   testament
whatsoever. Grace Joy became the de facto administrator of the
estate of Vipa. After Vipa's death, Levi lived in Aklan.
In   June   1998,   Rafael   stopped   paying   the   monthly   re11.ts.8
Consequently, on June 12, 2003, the Estate of Vipa, through Grace
Joy, filed a cmnplaint9 for unlawful detainer with the Municipal
Trial Court in Cities (MTCC) of Iloilo City against Rafael. It was
alleged therein that, as of June 1998, Rafael was already bound to
pay rent at the amount of P3,300.00 per month and that his last
payment was made in May 1998. Accordingly, at the time of the
filing of the Complaint, Rafael's unpaid rents amounted to P271,
150.00.   10   The   Estate   of   Vipa   claimed   that   despite   repeated
demands, Rafael refused to pay the rents due.  rent   of   the   subject   property,   an   arrangement   that   Rafael   took
In his Answer, Rafael denied that he refused to pay the rent for the
lease of the subject property. He claimed that sometime in June
1998 Patria Fernandez­Cuenca (Patria), Vipa's sister, demanded for
the payment of the rents, claiming that she is the rightful heir of
Vipa. Since he had no idea on who is entitled to receive the rent for
the subject prope1iy, he deposited ∙ the amount of Pl 0,000.00 with
the Office of the Clerk of Court of the Regional Trial Court (RTC)
of   Iloilo   City   on   November   20,   1998   and   that   Grace   Joy   was
informed  of  such  consignation.   He   claimed  that  a   case  for   the.
settlement of the Estate of Vi pa was instituted by Patria with the R
TC,   which   was   docketed   as   Special   Proceeding   No.   6910.   He
ave1Ted that he is willing to pay the rent on the leased prope1iy to
the rightful heirs of Vipa and that he made another consignation
with the RTC in the amount of P 6,000.00.
On June 12, 2008, the MTCC rendered a Decision, the decretal
portion of which reads:
WHEREFORE, in the light of the foregoing ratiocination,
judgment is hereby rendered in favor of the [Estate of Vipa]
and against [Rafael], ordering the latter to wit:
1. To   vacate   the   premises   subject   of   this   case   and
covered   by   TCT   No.   T­26576   and   to   peacefully
turn over the possession of the same to the [Estate
of Vipa];
2. To   pay   the   [Estate   of   Vipa]   the   amount   of   Php
271,150.00 as payment for the unpaid rentals with
12% interest per annum from the last demand on
May 3, 2003 until the whole amount is paid;
To   pay   the   [Estate   of   Vipa]   the   amount   of   Php
3,000.00 per month with 12% interest per annum
for   the   use   and   occupancy   of   the   premises
computed from the date of the filing of this case on
June, 2003 until fully paid;
4. To pay the [Estate of Vipa] attorney’s fees in the
amount of Php 20,000.00; and
5. To pay the costs of suit.
SO ORDERED.
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The   MTCC   found   that   after   Vipa’s   death   in  1994   until   1998m
Rafael was paying the rent for the lease of the subject property to
Grace Joy. That the real reason why Patria claimed to be the heir of
Vipa is because she owed Rafael money which she could not pay.
Patria then charged the debt she owes to Rafael from the monthly
advantage   to   avoid   paying   Grace   Joy   the   monthly   rents.   The
MTCC further opined that the consignations made by Rafael in the
total amount of Pl6,000.00 are not valid since there was no prior
tender of payment. 
On appeal, the RTC, in its Decision dated April 15, 2009, reversed
the MTCC's Decision dated June 12, 2008 and, thus, dismissed the
complaint for unlawful detainer filed by the Estate of Vipa. Thus:
WHEREFORE, premises considered, the Decision appealed
from is REVERSED and SET ASIDE; and herein complaint
is   hereby   DISMISSED   for   lack   of   merit;   and   further
DISMISSING   [Rafael’s]   counterclaim   for   failure   to
substantiate the same.
SO ORDERED.
The RTC opined that Grace Joy was actually the plaintiff in the
case and not the Estate of Vipa. It then pointed out that Grace Joy
failed to bring the dispute to the barangay for conciliation prior to
filing the complaint for unlawful detainer.
The RTC further held that the MTCC erred in including the ∙ entire
subject property as part of the Estate of Vipa. The RTC explained
that   the   subject   property   was   acquired   .by   Vipa   during.   the
subsistence of her marriage with Levi and, as such, is part of their
conjugal   prope1iies.   That   after   Vipa's   death,   the   conjugal
partnership   was   terminated,   entitling   Levi   to   one­half   of   the
property.  The RTC then pointed out that Levi sold his share in the
subject property to Rafael, as evidenced by a Deed of Sale2dated
December 29, 2005. Accordingly, the RTC ruled that Rafael, as
co­owner of the subject property, having bought Levi's one­half
share thereof, had the right to possess the same. 
The Estate of Vipa sought a reconsideration of the Decision dated
April 15, 2009, but it was denied by the RTC in its Order dated
July, 28, 2009.
The Estate of Vipa then filed a Petition for Review with the CA.
On   November   26,   2010,   the   CA   rendered   a   Decision,   which
declared:
 WHEREFORE,  in  view  of  all  the  foregoing,  the  instant
petition for review is GRANTED and the April 15, 2009
Decision of the court a quo in Civil Case No. 08­29842 is
herebt REVERSED and SET ASIDE. Accordingly, the June
12, 2008 Decision of the Municipal Trial Court, Branch 4,
Iloilo   City,   in   Civil   Case   No.   03­208   is   hereby
REINSTATED.
SO ORDERED.
The CA held that there was no necessity to bring the dispute before
the   barangay   for   conciliation   since   the   Estate   of   Vipa,   being   a
juridical person, cannot be impleaded to a barangay conciliation
proceeding.   The   CA   likewise   pointed   out   that   any   allegations
against Grace Joy's authority to represent the Estate of Vipa had
been laid to rest when she was appointed as administrator of the
Estate of Vipa in Special Proceedings No. 6910 pending before the
RTC.
Further, the CA held that Rafael raised the issue of ownership of
the subject property, i.e., Levi's sale of his one­half share in the
subject property to Rafael, only for the first time in his appeal with
the RTC. Accordingly, it was error on the part of the RTC to have
resolved   the   issue   of   ownership   of   the   subject   property.33
Furthermore,   the   CA   agreed   with   the   MTCC   that   Rafael's
consignation of  the  rent to the  RTC  is ineffective. It ruled that
Rafael   made   the   consignation   only   twice   and   the   amount
consigned was patently insignificant compared to the amount of
rent due.
Rafael's motion for reconsideration was denied by the CA in its
Resolution dated January 24, 2012.
Hence, the instant petition.
Rafael maintains that Grace Joy has no authority to tepresent the
Estate   of   Vipa   and,   when   she   filed   the   complaint   for   unlawful
detainer with the MTCC, she did so in her personal capacity. Thus,
Rafael  claims   that  the   dispute   should  have  been  brought  to  the
barangay   for   conciliation   before   the   complaint   was   filed   in   the
MTCC. He further claims that the CA erred in reversing the RTC's
ruling on the issue of ownership of the subject property. He insists
that   he   already   purchased   Levi's   one­half   share   in   the   subject
property.  Also, there was no need to refer the dispute between the parties
On the other hand, the Estate of Vi pa, in its Comment,  avers that
the supposed lack of authority of Grace Joy to file the complaint
for unlawful detainer and the ownership of the subject property
were never raised in the proceedings before the MTCC and, hence,
could not be passed upon by the RTC in the appellate proceedings.
In any case, it pointed out that the RTC's Decision dated October
28, 2005 in Special Proceedings No. 6910, which appointed Grace
Joy as 'the administrator of the intestate estate of Vipa, recognized
that the latter and Jill Frances are legitimate children of Vipa and
Levi.
Issue
Essentially, the issue set forth for the Court’s resolution is whether  raised for the first time on appeal and should thus not have been
the CA erred in reversing the RTC’s Decision dated April 15,  considered by the R TC, viz.:
2009.
Ruling of the Court
The petition is partly meritorious.
Rafael’s   claim   that   the   complaint   below   should   have   been
dismissed since Grace Joy has no authority to represent the Estate
of Vipa and that there was lack of prior barangay conciliation is
untenable. Unlawful detainer cases are covered by the Rules on
Summary   Procedure   Section   5   of   the   1991   Revised   Rules   on
Summary   Procedure   provides   that   affirmative   and   negative
defenses not pleaded in the answer shall be deemed waived, except
lack of jurisdiction over the subject matter.
Rafael failed to plead in the answer he filed with the MTCC that
Grace Joy has no authority to represent the Estate of Vipa. Neither
did he raise therein the lack of barangay conciliation between the
parties   herein   prior   to   the   filing   of   the   complaint   for   unlawful
detainer. Accordingly, the foregoing defenses are already deemed
waived.
In any case, the issue of the supposed lack of authority of Grace
Joy to  represent the  Estate  of  Vi pa  had already been rendered
moot   with   the   RTC's   appointment   of   Grace   Joy   as   the
administrator   of   the   Estate   of   Vipa   in   Special   Proceedings   No.
6910.
herein to the barangay for conciliation pursuant to the Katarungang
Pambarangay Law. It bears stressing that only individuals may be
91
parties to barangay conciliation proceedings either as complainants
or   respondents.   Complaints   by   or   against   corporations,
partnerships   or   other   juridical   entities   may   not   be   filed   with,
received or acted upon by the barangay for conciliation. The Estate
of Vipa, which is the complainant below, is a juridical entity that
has a personality, which is separate and distinct from that of Grace
Joy. Thus, there is no necessity to bring the dispute to the barangay
for   conciliation   prior   to   filing   of   the   complaint   for   unlawful
detainer with the MTCC.
The   CA,   nevertheless,   erred   in   hastily   dismissing   Rafael's
allegation   as   regards   the   ownership   of   the   subject   property.   In
disregarding Rafael's claim that he owns Levi's one­half undivided
share in the subject property, the CA ruled that the said issue was
On the second issue, the records show that [Rafael] raised
the  issue   of   ownership  only  for  the  first  time  on  appeal;
hence, the [RTC] erred in deciding the appeal before it on
the findings that part of the subject premises is owned by
petitioners, allegedly having bought the same from [Levi],
the husband of [Vipa].
The   Court   is   not   unmindful   that   in   forcible   et1try   and
unlawful ∙detainer cases, the MTC may rule on the issue [of]
ownership   in   order   to   determine   the   issue   of   possession.
However,   the   issue   of   ownership   must   be   raised   by   the
defendant   on   the   earliest   opportunity;   otherwise,   it   is
already   deemed   waived.   Moreover,   the   instant   case   was
covered   by   the   Rules   on   Summary   Procedure,   which
expressly provide that affirmative and negative defenses not
pleaded therein shall be deemed waived, except for lack of
jurisdiction over the subject matter. Thus, the [RTC] erred
in   resolving   the   issue   of   ownership   for   the   first   time   on
appeal. (Citations omitted)
It is true that fair play, justice, and due process dictate that parties
should not raise for the first time on appeal issues that they could
have raised but never did during trial. However, before a partly
may be barred from ∙ raising an issue for the first time on appeal, it
is imperative that the issue could have been raised during the trial.
What escaped the appellate co mi's attention is that the sale of the
one­half   undivided   share   in   the   subject   property   to   Rafael   was
consummated only on December 29, 2005, more than two years
after Rafael filed with the MTCC his answer to the complaint for
unlawful detainer on July 18, 2003. Obviously, Rafael could not
have raised his acquisition of Levi's share in the subject property as
an affirmative defense in the answer he filed with the MTCC.
Moreover, Rafael's ownership of the one­half undivided∙ share in
the subject prope1iy would necessarily affect the property relations
between   the   parties   herein.   Thus,   the   CA   should   have   exerted
efforts to resolve the said issue instead of dismissing the same on
the  flimsy ground that it was not raised during the  proceedings
before the MTCC.
Levi  and  Vipa   were   married   on  March  24,   196148  and,  in   the
absence   of   a   marriage   settlement,   the   system   of   conjugal
partnership of gains governs their property relations. It is presumed
that the subject property is part of the conjugal properties of Vipa
and   Levi   considering   that   the   same   was   acquired   during   the
subsistence   of   their   marriage   and   there   being   no   proof   to   the
contrary.  Nevertheless, a  co­owner  could  sell  his undivided share; hence,
When Vipa died on March 5, 1994, the conjugal partnership was
automatically terminated. Under Article 130 of the Family Code,
the conjugal partnership property, upon its dissolution due to the
death   of   either   spouse,   should   be   liquidated   either   in   the   same
proceeding for the settlement of the estate of the deceased or, in
the absence thereof, by the surviving spouse within one year from
the death of the deceased spouse. That absent any liquidation, any
disposition or encumbrance of the conjugal partnership property is
void. Thus:
Article 130. Upon the termination of the marriage by death,
the conjugal partnership property shall be liquidated in the
same   proceeding   for   the   settlement   of   the   estate   of   the
deceased.
If   no   judicial   settlement   proceeding   is∙   instituted,   the
surviving spouse shall liquidate the conjugal partnership
property either  judicially or  extra­judicially within six
months from the death of the deceased spouse. If upon
the lapse of the six­month period no liquidation is made,
any disposition or encumbrance involving the conjugal
partnership property of the  terminated marriage  shall
be void.
Should the surviving spouse contract a subsequent marriage
without   compliance   with   the   foregoing   requirements,   a
mandatory regime of complete separation of property shall
govern the  property relations  of  the  subsequent  marriage.
(Emphasis ours)
Article   130   of   the   Family   Code   is   applicable   to   conjugal
partnership of gains already established between the spouses prior
to   the  effectivity  of   ∙  the   Family  Code  pursuant   to  Article  105
thereof, viz.:
Article 105. In case the future spouses agree in the marriage
settlements that the regime of conjugal partnership of gains
shall   govern   their   property   relations   during   marriage,   the
provisions   in   this   Chapter   shall   be   of   supplementary
application.
The provisions of this Chapter shall also apply to conjugal
partnerships of gains already established between spouses
before   the   effectivity   of   this   Code,   without   prejudice   to
vested rights already acquired in accordance with the Civil
Code or other laws as provided in Article 256. (Emphasis
ours)
Rafael   bought   Levi's   one­half   share   in   the   subject   property   in
consideration of P500,000.00 as evidenced by the  Deed of  Sale
dated December 29, 2005. At that time, the conjugal partnership
properties of Levi and Vipa were not yet liquidated. However, such
disposition,   notwithstanding   the   absence   of   liquidation   of   the
conjugal partnership properties, is not necessarily void.
It bears stressing that under the regime of conjugal partnership of
gains, the husband and wife are co­owners of all the property of
the   conjugal   partnership.   53   Thus,   upon   the   termination   of   the
conjugal partnership of gains due to the death of either spouse, the
surviving spouse has an actual and vested one­half undivided share
of   the   properties,   which   does   not   consist   of   deten11inate   and
segregated properties until liquidation and partition of the conjugal
partnership. With respect, however, to the deceased spouse's share
in   the   conjugal   partnership   prope1iies,   an   implied   ordinary   co­
ownership ensues among the surviving spouse and the other heirs
of the deceased.
Thus,   upon   Vipa's   death,   one­half   of   the   subject   property   was
automatically reserved in favor of the surviving spouse, Levi, as
his   share   in   the   conjugal   partnership.   The   other   half,   which   is
Vipa's share, was ∙ transmitted to  Vipa's  heirs ­  Grace  Joy, Jill
Frances, and her husband Levi, who is entitled to the same share as
that  of   a  legitimate  child.  The   ensuing  implied co­ownership  is
governed by Article 493 of the Civil Code, which provides:
Article   493.   Each   co­owner   shall   have   the   full
ownership   of   his   part   and   of   the   fruits   and   benefits
pertaining thereto, and he may therefore alienate, assign
92
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 co­owners, shall be limited to the portion
which may be allotted to him in the division upon the
termination of the co­ownership. (Emphasis ours)
Although   Levi   became   a   co­owner   of   the   conjugal   partnership
properties with Grace Joy and Jill Frances, he could not yet assert
or   claim   title   to   any   specific   portion   thereof   without   an   actual
partition of the property being first done either by agreement or by
judicial   decree.   Before   the   partition   of   a   land   or   thing   held   in
common, no individual or co­owner can claim title to any definite
portion thereof. All that the co­owner has is an ideal or abstract
quota or proportionate share in the entire land or thing.
Levi   had   the   right   to   freely   sell   and   dispose   of   his   undivided
interest. Thus, the sale by Levi of his one­half undivided share in
the subject property was not necessarily void, for his right as a co­
owner   thereof   was   effectively   transferred,   making   the   buyer,
Rafael, a co­owner of the subject prope1iy. It must be stressed that
the binding force of a contract must be recognized as far as it is
legally   possible   to   do   so   (quando   res   non   valet   ut   ago,   valeat
quantum valere potest).
However, Rafael became a co­owner of the subject property only
on  December   29,  2005  ­   the  time   when  Levi   sold  his  one­half
undivided   share   over   the   subject   prope1iy   to   the   former.   Thus,
from December 29, 2005 Rafael, as a co­owner, has the right to
possess   the   subject   prope1iy   as.   an   incident   of   ownership.
Otherwise   stated,   prior   to   his   acquisition   of   Levi's   one­half
undivided share, Rafael was a mere lessee of the subject property
and is thus obliged to pay the rent for his possession thereof.
Accordingly,   Rafael   could   no   longer   be   directed   to   vacate   the
subject   property   since   he   is   already   a   co­owner   thereof.
Neve1iheless, Rafael is still bound to pay the unpaid rentals from
June   1998   until   April   2003   in∙   the   amount   of   P271,150.00.   In
Nacar   v.   Gallery   Frames,   et   al.,58   the   Comi   pointed   out   that
pursuant to Resolution No. 796 of the Bangko Sentral ng Pilipinas
Monetary Board, the interest rate ofloans or forbearance of money,
in the absence of stipulation shall be six percent (6%) effective
only from July 1, 2013. Thus, prior to July 1, 2013, the rate of
interest   on   loans   or   forbearance   of   money,   in   the   absence   of
stipulation, is still 12%. Accordingly, the amount of P271,150.00,
representing the unpaid rentals shall earn interest at the rates of
12% per annum from the date of the last ∙ demand on May 3, 2003
until June 30, 2013 and 6% per annum from July 1, 2013 until for unlawful detainer on June 12, 2003, until June30,
fully paid. 2013,   and   six   percent   (6%)   per   annum   from   July   1,
2013 until fully paid; and 
Further, Rafael is likewise bound to pay reasonable rent for the use
3. The amount of P20,000.00 as attorney's fees.
and   occupancy   of   the   subject   prope1iy   from   May   2003   until
December 28, 2005 at the rate of P3,000.00 per month with interest
at the rate of 12% per annum from the date of the last demand, i.e., SO ORDERED.
the filing of the complaint with the MTCC on June 12, 2003, until
June 30, 2013 and 6% per annum from July 1, 2013 until fully BIENVENIDO L. REYES
paid.
Associate Justice
The   award   of   attorney's   fees   of   P20,000.00   is   likewise   proper.
Attorney's fees can be awarded in the cases enumerated in Article
2208 of the Civil Code, specifically:

Article 2208. xx x

xx xx (2) Where  the defendant's act or omission has
compelled the plaintiff to litigate with third persons or
to incur expenses to protect his interest.

Certainly, because of Rafael's unjustified refusal to pay the rents
due on the lease of the subject property, the Estate of Vipa was put
to  unnecessary expense  and trouble   to protect  its  interest  under
paragraph (2), Article 2208 of the Civil Code. In unlawful detainer
cases, where attorney's fees are awarded, the same shall not exceed
P20,000.00.

WHEREFORE,   in   view   of   the   foregoing   disquisitions,   the

petition for review on certiorari is PARTIALLY GRANTED. The
Decision dated November 26, 2010 and Resolution dated January
24, 2012 issued by the Court of Appeals in CA­G.R. SP No. 04481
are hereby REVERSED and SET ASIDE. Petitioner Rafael C. Uy
is   hereby   directed   to   pay   the   Estate   of   Vipa   Fernandez   the
following:

1. The   amount   of   P271,150.00,   representing   the   unpaid

rentals,   with   interest   at   the   rates   of   twelve   percent
(12%) per annum from the date of the last demand on
May 3, 2003 until June 30, 2013, and six percent (6%)
per annum from July 1, 2013 until fully paid; 
2. Reasonable   rent   for   the   use   and   occupancy   of   the
subject  property   from   May  2003   until   December   28,
2005 at the rate of P3,000.00 per month with interest at
the rates of twelve percent (12%) per annum from the
date of the last demand, i.e., the filing of the complaint
93
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 234533 June 27, 2018
SPOUSES   JULIETA   B.   CARLOS   and   FERNANDO   P.
CARLOS, Petitioners
vs.
JUAN CRUZ TOLENTINO, Respondent
D E C I S I O N
VELASCO, JR., J.:
Nature of the Case
Before this Court is a petition for review on certiorari under Rule
45 of the Rules of Court assailing the April 5, 2017 Decision 1 and
the September 27, 2017 Resolution2 of the Court of Appeals (CA)
in CA­G.R. CV No. 106430. The challenged rulings reversed and
set aside the October 16, 2015 Decision 3 and the December 9, 2015
Order4 of the Regional Trial Court (RTC) of Quezon City, Branch
87 which dismissed respondent's complaint for annulment of title
against the petitioners.
The Facts
The instant case arose from a complaint for annulment of title with
damages filed by respondent Juan Cruz Tolentino (Juan) against
his wife, Mercedes Tolentino (Mercedes), his grandson, Kristoff
M.   Tolentino   (Kristoff),   herein   petitioners   Spouses   Julieta   B.
Carlos (Julieta) and Fernando P. Carlos (Spouses Carlos), and the
Register of Deeds of Quezon City.
The subject matter of the action is a parcel of land with an area of
1,000 square meters and all the improvements thereon located in
Novaliches,5 Quezon City, covered by Transfer Certificate of Title
(TCT)   No.   RT­90746   (116229)   issued   on   March   17,   1967   and
registered in the name of Juan C. Tolentino, married to Mercedes
Tolentino (the subject property). 6
Without   Juan's   knowledge   and   consent,   Mercedes   and   Kristoff,
who were then residing in the subject property, allegedly forged a
Deed  of   Donation 7 dated  February  15,  2011,  thereby  making  it
appear   that   Juan   and   Mercedes   donated   the   subject   property   to
Kristoff. Thus, by virtue of the alleged forged Deed of Donation,
Kristoff caused the cancellation of TCT No. RT­90764 (116229),
and in lieu thereof, TCT No. 004­2011003320 8 was issued in his
name on March 9, 2011. 9
In April 2011, Kristoff offered the sale of the subject property to
Julieta's brother, Felix Bacal (Felix), who is also the administrator
of   the   lot   owned   by   Julieta   which   is   adjacent   to   the   subject
property. When Felix informed Julieta  of  the  availability of  the
subject property, Spouses Carlos then asked him to negotiate for its
purchase with Kristoff. Kristoff  and Felix then arranged for  the
ocular   inspection   of   the   subject   property.   Thereafter,   Kristoff
surrendered to Felix copies of the title and tax declaration covering
the said property. 10
After   a   series   of   negotiations,   Kristoff   and   Julieta   executed   a
Memorandum of Agreement11 (MOA) dated April 12, 2011 stating
that Kristoff is selling the subject property to Julieta in the amount
of Two Million Three Hundred Thousand Pesos (P2,300,000.00),
payable in two (2) installments. On May 28, 2011, Julieta made the
first   payment   in   the   amount   of   Two   Million   Pesos
(₱2,000,000.00) 12 while   the   second   payment   in   the   amount   of
Three Hundred Thousand Pesos (P300,000.00) was made on June
30,   2011. 13 On   the   same   day,   a   Deed   of   Absolute   Sale 14 was
executed between Kristoff and Julieta.
Upon learning of the foregoing events, Juan executed an Affidavit
of   Adverse   Claim   which   was   annotated   on   TCT   No.   004­
2011003320 on July 15, 2011, to wit:
NOTICE OF ADVERSE CLAIM : EXECUTED UNDER OATH
BY   JUAN   C.   TOLENTINO,   CLAIMING   FOR   THE   RIGHTS,
INTEREST   AND   PARTICIPATION   OVER   THE   PROPERTY,
STATING   AMONG   OTHERS   THAT   HE   DISCOVERED   ON
JULY 14, 2011 THAT SAID PARCEL OF LAND HAS BEEN
DONATED TO KRISTOFF M. TOLENTINO BY VIRTUE OF A
DEED   OF   DONATION   PU[R]PORTEDL   Y   EXECUTED   BY
JUAN C. TOLENTINO & MERCEDES SERRANO ONFEB. 15,
2011.   THAT   AS   A   RESULT   OF   THE   FORGED   DEED   OF
DONATION,   HIS   TITLE   WAS   CANCELLED.   THAT   HE
DECLARE THAT HE HA VE NOT SIGNED ANY DEED OF
94
DONATION IN FAVOR OF SAID KRISTOFF M. TOLENTINO.
NEITHER   DID   HE   SELL,   TRANSFER   NOR   WAIVE   ms
RIGHTS   OF   OWNERSHIP   OVER   THE   SAID   PROPERTY.
OTHER CONDITIONS SET FORTH IN DOC. NO. 253, PAGE
NO. 52, BOOK NO. V, SERIES OF 2011 OF NOTARY PUBLIC
OF QC, MANNY GRAGASIN. DATE INSTRUMENT­ JUNE 15,
2011 15
Juan   also   filed   a   criminal   complaint   for   Falsification   of   Public
Document before the Office of the City Prosecutor of Quezon City
against Kristoff. 16 A Resolution for the filing of Information for
Falsification of Public Document against Kristoff was then issued
on January 10, 2012. Accordingly, an Information dated February
15, 2012 was filed against him. 17
Meanwhile,   Kristoff   and   Julieta   executed   another   Deed   of
Absolute   Sale18 dated   September   12,   2011   over   the   subject
property and, by virtue thereof, the Register of Deeds of Quezon
City cancelled TCT  No. 004­ 2011003320 and issued TCT  No.
004­201101350219 on   December   5,   2011   in   favor   of   Spouses
Carlos. The affidavit of adverse claim executed by Juan was duly
carried over to the title of Spouses Carlos.
On February 23, 2012, Juan filed a complaint for annulment of title
with damages against Mercedes, Kristoff, Spouses Carlos, and the
Register of Deeds of Quezon City before the R TC of Quezon City.
The case was raffled to Branch 87 and docketed as Civil Case No.
Q­12­70832.
RTC Ruling
In   its   October   16,   2015   Decision,   the   RTC   found   that   Juan's
signature in the Deed of Donation dated Februaru 15, 2011 was a
forgery. 20 Despite   such   finding,   however,   it   dismissed   Juan's
complaint.
The R TC found that at the time Spouses Carlos fully paid the
agreed price in the MOA on June 30, 2011, which culminated in
the execution of the Deed of Absolute Sale on even date, Kristoff
was the registered owner of the subject property covered by TCT
No. 004­2011003320. Further, when the MOA and the Deed of
Absolute  Sale  dated June  30, 2011 were  executed, nothing  was
annotated on the said title to indicate the adverse claim of Juan or
any other person. It was only on July 15, 2011 when Juan's adverse
claim was annotated on Kristoff's title.21
The fact that a second Deed of Absolute Sale dated September 12,
2011 was executed is immaterial since the actual sale of the subject
property took place on June 30, 2011 when Spouses Carlos fully
paid the purchase price. Thus, relying on the face of Kristoff s title
without any knowledge of irregularity in the issuance thereof and
having paid a fair and full price of the subject property before they
could be charged with knowledge of Juan's adverse claim, the RTC
upheld   Spouses   Carlos'   right   over   the   subject   property.   The
dispositive portion of the October 16, 2015 Decision states:
WHEREFORE, viewed in the light of the foregoing, the instant
complaint   for   Annulment   of   Title   and   Damages   against   the
defendant   spouses   Fernando   and   Julieta   Carlos   is   hereby
DISMISSED   for   failure   of   the   plaintiff   to   prove   his   cause   of
action.   This   is   without   prejudice,   however   to   any   appropriate
remedy   the   plaintiff   may   take   against   Kristoff   Tolentino   and
Mercedes Tolentino.
The defendant spouses' counterclaim is DISMISSED for lack of
merit.
SO ORDERED.22
Juan moved for reconsideration of the said decision but was denied
by the R TC in its December 9, 2015 Order. Thus, he interposed an
appeal before the CA.
CA Ruling
On appeal, the CA found that Spouses Carlos were negligent in not
taking the necessary steps to determine the status of the subject
property   prior   to   their   purchase   thereof.   It   stressed   that   Julieta
failed to examine Kristoff s title and other documents before the
sale as she merely relied on her brother, Felix. 23 Accordingly, the
CA  ruled that Juan has a better right over the subject property.
The fallo of the April 5, 2017 Decision reads:
WHEREFORE,   the   appeal   is GRANTED.   The   appealed
Decision of the RTC of Quezon City dated October 16, 2015 is
hereby REVERSED and SET ASIDE.   Accordingly,   plaintiff­
appellant Juan Cruz Tolentino is recognized to have a better right
over the subject property. The Register of Deeds of Quezon City
is ORDERED to   reinstate   TCT   No.   RT­90746   (116229)   in   the
name   of   Juan   Cruz   Tolentino   and   to   cancel   TCT   No.   004­
2011013502 in the names of Spouses Julieta and Fernando Carlos,
and the latter to surrender  possession of  the subject property to
Juan Cruz Tolentino.
SO ORDERED.24
Spouses   Carlos   then   filed   a   motion   for   reconsideration   but   the
same was denied by the CA in its September 27, 2017 Resolution.
Hence, the instant petition.
The Issue
Spouses Carlos anchor their plea for the reversal of the assailed
Decision on the following grounds: 25
The Court of Appeals acted injudiciously, and with grievous abuse
of   discretion   in   the   appreciation   of   facts   and   in   disregard   of
jurisprudence,   when   it   granted   respondent's   appeal,   and   thereby
arbitrarily and despotically ratiocinated that ­
I.   Petitioners   are   not   buyers   in   good   faith   of   the   litigated   real
property,   but   who   are   otherwise   devoid   of   notice   let   alone
knowledge of any flaw or infirmity in the title of the person selling
the property at the time of purchase.
II. Petitioners are not purchasers in good faith, on the basis of the
Memorandum of Agreement dated April 12, 2011 and the Deed of
Absolute Sale dated June 30, 2011.
III. Respondent Juan Cruz Tolentino was the previous registered
owner of the land in dispute, thereby acting on oblivion to the fact
that the real property is essentially conjugal in nature.
IV. In failing to rule and rationalize that at least one­half of the
subject real property should belong to petitioners.
V. The litigated property must be awarded and returned m favour
of respondent Juan Cruz Tolentino in its entirety.
At bottom, the crux of the controversy is who, between Juan and
Spouses Carlos, has the better to right to claim ownership over the
subject property.
95
The Court's Ruling
The   present   controversy   necessitates   an   inquiry   into   the   facts.
While, as a general rule, factual issues are not within the province
of   this   Court,   nonetheless,   in   light   of   the   conflicting   factual
findings   of   the   two   courts   below,   an   examination   of   the   facts
obtaining in this case is in order. 26
Juan   and   Mercedes   appear   to   have   been   married   before   the
effectivity of the Family Code on August 3, 1988. There being no
indication that they have adopted a different property regime, the
presumption   is   that   their   property   relations   is   governed   by   the
regime of conjugal partnership of gains. 27 Article 119 of the Civil
Code thus provides:
Article 119. The future spouses may in the marriage settlements
agree upon absolute or relative community of property, or upon
complete separation of property, or upon any other regime. In the
absence of marriage settlements, or when the same are void, the
system of relative community or conjugal partnership of gains as
established   in   this   Code,   shall   govern   the   property   relations
between husband and wife.
Likewise,   the   Family   Code   contains   terms   governing   conjugal
partnership   of   gains   that   supersede   the   terms   of   the   conjugal
partnership   of   gains   under   the   Civil   Code.   Article   105   of   the
Family Code states:
Article   105.   In   case   the   future   spouses   agree   in   the   marriage
settlements that the regime of conjugal partnership of gains shall
govern their property relations during marriage, the provisions in
this Chapter shall be of supplementary application.
The   provisions   of   this   Chapter   shall   also   apply   to   conjugal
partnerships of gains already established between spouses before
the   effectivity   of   this   Code,   without   prejudice   to   vested   rights
already acquired in accordance with the Civil Code or other laws,
as provided in Article 256.
Since   the   subject   property   was   acquired   on   March   17,
196728 during the marriage of Juan and Mercedes, it formed part of
their   conjugal   partnership. 29 It   follows   then   that   Juan   and
Mercedes   are   the   absolute   owners   of   their   undivided   one­half
interest, respectively, over the subject property.
Meanwhile,  as  in any other  property  relations  between  husband
and wife, the conjugal partnership is terminated upon the death of
either of the spouses.30 In respondent Juan's Comment filed before
the Court, the Verification which he executed on February 9, 2018
states that he is already a widower. Hence, the Court takes due
notice of the fact of Mercedes' death which inevitably results in the
dissolution of the conjugal partnership.
In   retrospect,   as   absolute   owners   of   the   subject   property   then
covered by TCT No. RT­90746 (116229), Juan and Mercedes may
validly   exercise   rights   of   ownership   by   executing   deeds   which
transfer title thereto such as, in this case, the Deed of Donation
dated February 15, 2011 in favor of their grandson, Kristoff.
With   regard   to   Juan's   consent   to   the   afore­stated   donation,   the
RTC,  however, found that such was lacking since  his signature
therein was forged. Notably, the CA did not overturn such finding,
and in fact, no longer touched upon the issue of forgery. On the
other hand, it must be pointed out that the signature of Mercedes in
the   Deed   of   Donation   was   never   contested   and   is,   therefore,
deemed admitted.
In Arrogante   v.   Deliarte,31 We   ruled   that   a   deed   of   sale   of   the
subject lot therein  executed by the  Deliarte  siblings in favor  of
their   brother,   respondent   Beethoven   Deliarte   (Beethoven),   was
void for being a conveyance of future inheritance. Nonetheless, the
provisions   in   the   written   agreement   and   the   Deliarte   siblings'
signature thereon are equivalent to an express waiver of all their
rights and interests. Thus, the Court upheld the quieting of title in
favor of respondent Beethoven after finding that the deed of sale,
albeit   void,   evidenced   the   consent   and   acquiescence   of   each
Deliarte sibling to said transaction.
In the present case, while it has been settled that the congruence of
the  wills  of  the  spouses is essential  for  the  valid  disposition  of
conjugal property, 32 it cannot be ignored that Mercedes' consent to
the   disposition   of   her   one­half   interest   in   the   subject   property
remained   undisputed.   It   is   apparent   that   Mercedes,   during   her
lifetime,   relinquished   all   her   rights   thereon   in   favor   of   her
grandson, Kristoff.
Furthermore,   Mercedes'   knowledge   of   and   acquiescence   to   the
subsequent   sale   of   the   subject   property   to   Spouses   Carlos   is
evidenced by her signature appearing in the MOA 33 dated April 12,
2011 and the Deed of Absolute Sale 34 dated September 12, 2011.
We are also mindful of the fact that Spouses Carlos had already
paid a valuable consideration in the amount of Two Million Three of the subject property is declared NULL and VOID with respect
Hundred Thousand Pesos (P2,300,000.00) for the subject property to   the   undivided   1/2   portion   owned   by   Juan   Cruz   Tolentino,
before Juan's adverse claim was annotated on Kristoff s title. The but VALID with   respect   to   the   other   undivided   1/2   portion
said purchase and acquisition for valuable consideration deserves a belonging   to   Mercedes   Tolentino.   Accordingly,   petitioners
certain degree of legal protection. Spouses  Carlos  and respondent  Juan  Cruz   Tolentino  are  hereby
declared   as   co­owners   of   the   subject   property.   The   Register   of
Given the foregoing, the Court is disinclined to rule that the Deed Deeds   of   Quezon   City   is   ordered   to   cancel   TCT   No.   004­
of Donation is wholly void ab initio and that the Spouses Carlos 2011013502 and to issue a new transfer certificate of title in the
should be totally stripped of their right over the subject property. In names of Julieta  B. Carlos, married to Fernando P. Carlos, and
consonance with justice and equity, We deem it proper to uphold Juan Cruz Tolentino on a 50­50 undivided interest in the lot.
the validity of the Deed of Donation dated February 15, 2011 but
only   to   the   extent   of   Mercedes'   one   half   share   in   the   subject We order Kristoff M. Tolentino to pay Spouses Carlos the amount
property.   And   rightly   so,   because   why   invalidate   Mercedes' of   One   Million   One   Hundred   Fifty   Thousand   Pesos
disposition of her one­half portion of the conjugal property that (P1,150,000.00) corresponding to one­half of the amount paid by
will eventually be her share after the termination of the conjugal Spouses Carlos for the subject property, with legal interest at the
partnership? It will practically be absurd, especially in the instant rate of 6% computed from the finality of this Decision.
case, since the conjugal partnership had already been terminated
upon Mercedes' death.
SO ORDERED.
Accordingly, the right of Kristoff, as donee, is limited only to the
PRESBITERO J. VELASCO, JR.
one­half   undivided   portion   that   Mercedes   owned.1âwphi1 The
Associate Justice
Deed   of   Donation   insofar   as   it   covered   the   remaining   one­half
undivided portion of the subject property is null and void, Juan not
having consented to the donation of his undivided half.
Upon the foregoing perspective, Spouses Carlos' right, as vendees
in the subsequent sale of the subject property, is confined only to
the one­half undivided portion thereof. The other undivided half
still belongs to Juan. As owners pro indiviso of a portion of the lot
in question, either Spouses Carlos or Juan may ask for the partition
of the lot and their property rights shall be limited to the portion
which may be allotted to them in the division upon the termination
of   the   co­ownership.35 This   disposition   is   in   line   with   the   well
established principle that the binding force of a contract must be
recognized as far as it is legally possible to do so­quando res non
valet ut ago, valeat quantum vale re potest. 36
Lastly, as a matter of fairness and in line with the principle that no
person   should   unjustly   enrich   himself   at   the   expense   of
another, 37 Kristoff should be liable to reimburse Spouses Carlos of
the amount corresponding to one­half of the purchase price of the
subject property.
WHEREFORE, in   view   of   the   foregoing,   the   petition
is PARTIALLY GRANTED. The  donation and subsequent sale
96
97
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. NO. 155409              June 8, 2007
VIRGILIO MAQUILAN, petitioner,
vs.
DITA MAQUILAN, respondent.
D E C I S I O N
AUSTRIA­MARTINEZ, J.:
Before the Court is a Petition for Review on Certiorari under Rule
45 of the Rules of Court assailing the Decision 1 dated August 30,
2002 promulgated by the Court of Appeals (CA) in CA­G.R. SP
No.   69689,   which   affirmed   the   Judgment   on   Compromise
Agreement   dated   January   2,   2002   of   the   Regional   Trial   Court
(RTC), Branch 3, Nabunturan, Compostela Valley, and the RTC
Orders dated January 21, 2002 and February 7, 2002 (ORDERS) in
Civil Case No. 656.
The facts of the case, as found by the CA, are as follows:
Herein petitioner and herein private respondent are spouses who
once had a blissful married life and out of which were blessed to
have a son. However, their once sugar coated romance turned bitter
when   petitioner   discovered   that   private   respondent   was   having
illicit sexual affair with her paramour, which thus, prompted the
petitioner to file a case of adultery against private respondent and
the latter’s paramour. Consequently, both the private respondent
and her paramour were convicted of the crime charged and were
sentenced to suffer an imprisonment ranging from one (1) year,
eight (8) months, minimum of prision correccional as minimum
penalty,  to three  (3)  years, six (6)  months and twenty  one  (21)
days, medium of prision correccional as maximum penalty.
Thereafter, private respondent, through counsel, filed a Petition for
Declaration of Nullity of Marriage, Dissolution and Liquidation of
Conjugal Partnership of Gains and Damages on June 15, 2001 with
the  Regional  Trial  Court,   Branch  3  of  Nabunturan,  Compostela
Valley, docketed as Civil Case No. 656, imputing psychological
incapacity on the part of the petitioner.
During   the   pre­trial   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.  ₱500,000.00 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
₱1,318,043.36,   shall   be   withdrawn   and   divided   equally   by   the
parties;
b. The store that is now being occupied by the plaintiff shall be
allotted to her while the bodega shall be for the defendant. The
defendant shall be paid the sum of ₱50,000.00 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  ₱75,000.00 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;
98
x x x x
The said Compromise Agreement was given judicial imprimatur
by   the   respondent   judge   in   the   assailed Judgment   On
Compromise Agreement, which was erroneously dated January 2,
2002.2
However, petitioner filed an Omnibus Motion dated January 15,
2002, praying for the repudiation of the Compromise Agreement
and   the   reconsideration   of   the   Judgment   on   Compromise
Agreement   by   the   respondent   judge   on   the   grounds   that   his
previous lawyer did not intelligently and judiciously apprise him of
the consequential effects of the Compromise Agreement.
The respondent Judge in the assailed Order dated January 21,
2002, denied the aforementioned Omnibus Motion.
Displeased, petitioner  filed a Motion for  Reconsideration of the
aforesaid Order, but the same was denied in the assailed Order
dated February 7, 2002.3 (Emphasis supplied)
The petitioner filed a Petition for Certiorari and Prohibition with
the CA under Rule 65 of the Rules of Court claiming that the RTC
committed grave error and abuse of discretion amounting to lack or
excess   of   jurisdiction   (1)   in   upholding   the   validity   of   the
Compromise Agreement dated January 11, 2002; (2) when it held
in   its   Order   dated   February   7,   2002   that   the   Compromise
Agreement was made within the cooling­off period; (3) when it
denied petitioner’s Motion to Repudiate Compromise Agreement
and to Reconsider Its Judgment on Compromise Agreement; and
(4) when it conducted the proceedings without the appearance and
participation   of   the   Office   of   the   Solicitor   General   and/or   the
Provincial Prosecutor.4
On August 30, 2002, the CA dismissed the  Petition for lack of
merit. The CA held that the conviction of the respondent of the
crime of adultery does not ipso facto disqualify her from sharing in
the   conjugal   property,   especially   considering   that   she   had   only
been sentenced with the penalty of prision correccional, a penalty
that does not carry the accessory penalty of civil interdiction which
deprives the person of the rights to manage her property and to
dispose of such property inter vivos; that Articles 43 and 63 of the
Family Code, which pertain to the effects of a nullified marriage
and   the   effects   of   legal   separation,   respectively,   do   not   apply,
considering, too, that the Petition for the Declaration of the Nullity
of   Marriage  filed  by  the   respondent   invoking  Article  36  of   the
Family Code has yet to be decided, and, hence, it is premature to
apply   Articles   43   and   63   of   the   Family   Code;   that,   although
adultery is a ground for legal separation, nonetheless, Article 63
finds no application in the instant case since no petition to that
effect was filed by the petitioner against the respondent; that the
spouses   voluntarily   separated   their   property   through   their
Compromise Agreement with court approval under Article 134 of
the   Family   Code;   that   the   Compromise   Agreement,   which
embodies the voluntary separation of property, is valid and binding
in all respects because it had been voluntarily entered into by the
parties; that, furthermore, even if it were true that the petitioner
was  not  duly  informed  by  his   previous  counsel   about  the  legal
effects of the Compromise Agreement, this point is untenable since
the  mistake or negligence  of the  lawyer  binds his client, unless
such   mistake   or   negligence   amounts   to   gross   negligence   or
deprivation   of   due   process   on   the   part   of   his   client;   that   these
exceptions are not present in the instant case; that the Compromise
Agreement  was plainly  worded and written in  simple   language,
which   a   person   of   ordinary   intelligence   can   discern   the
consequences   thereof,   hence,   petitioner’s   claim   that   his   consent
was vitiated is highly incredible; that the Compromise Agreement
was made during the existence of the marriage of the parties since
it was submitted during the pendency of the petition for declaration
of nullity of marriage; that the application of Article 2035 of the
Civil Code is misplaced; that the cooling­off 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   PRE­REQUISITE   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
99
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. Petitioner’s claim that since the  proceedings before the
RTC were void in the absence of the participation of the provincial
prosecutor or solicitor, the voluntary separation made during the
pendency of the case is also void. The proceedings pertaining to
the  Compromise  Agreement involved the  conjugal properties of
the   spouses.   The   settlement   had   no   relation   to   the   questions
surrounding the validity of their marriage. Nor did the settlement
amount to a collusion between the parties.
Article 48 of the Family Code states:
Art. 48. In all cases of annulment or declaration of absolute nullity
of marriage, the Court shall order the prosecuting attorney or fiscal
assigned  to  it  to   appear   on  behalf   of  the  State  to  take   steps  to
prevent   collusion   between   the   parties   and   to   take   care   that   the
evidence is not fabricated or suppressed. (Emphasis supplied)
Section 3(e) of Rule 9 of the 1997 Rules of Court provides:
SEC. 3. Default; declaration of.­ x x x x
x x x x
(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:
100
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 well­settled 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.

SO ORDERED.

MA. ALICIA AUSTRIA­MARTINEZ
Associate Justice

101
SECOND DIVISION House and Lot with an area of 150 sq. m. located at 1085 Norma  $56,228.004
Street, Sampaloc, Manila (Sampaloc property)

P1,693,125.00
G.R. No. 188289, August 20, 2014 The Sampaloc property used to be owned by David’s parents. The 
Agricultural land with an area of 20,742 sq. m. located at Laboy,  parties herein secured a loan from a bank and mortgaged the 
Dipaculao, Aurora property. When said property was about to be foreclosed, the 
couple paid a total of P1.5 Million for the redemption of the same.
DAVID A. NOVERAS, Petitioner, v. LETICIA T. NOVERAS,  P400,000.00
Respondent.
A parcel of land with an area of 2.5 hectares located at Maria 
Aurora, Aurora Due to business reverses, David left the USA and returned to the 
Philippines in 2001. In December 2002, Leticia executed a Special 
D E C I S I O N P490,000.00
Power of Attorney (SPA) authorizing David to sell the Sampaloc 
A parcel of land with an area of 175 sq.m. located at Sabang Baler, property for P2.2 Million. According to Leticia, sometime in 
Aurora September 2003, David abandoned his family and lived with 
PEREZ, J.: Estrellita Martinez in Aurora province. Leticia claimed that David 
P175,000.003
agreed to and executed a Joint Affidavit with Leticia in the 
3­has. coconut plantation in San Joaquin Maria Aurora, Aurora presence of David’s father, Atty. Isaias Noveras, on 3 December 
Before the Court is a petition for review assailing the 9 May 2008  2003 stating that: 1) the P1.1Million proceeds from the sale of the 
Decision1 of the Court of Appeals in CA­G.R. CV No. 88686,  P750,000.00 Sampaloc property shall be paid to and collected by Leticia; 2) that
which affirmed in part the 8 December 2006 Decision2 of the  David shall return and pay to Leticia P750,000.00, which is 
USA
Regional Trial Court (RTC) of Baler, Aurora, Branch 96. equivalent to half of the amount of the redemption price of the 
PROPERTY Sampaloc property; and 3) that David shall renounce and forfeit all
FAIR MARKET VALUE his rights and interest in the conjugal and real properties situated in
The factual antecedents are as follow:chanRoblesvirtualLawlibrary the Philippines.5 David was able to collect P1,790,000.00 from the
House and Lot at 1155 Hanover Street, Daly City, California sale of the Sampaloc property, leaving an unpaid balance of 
P410,000.00.
$550,000.00 (unpaid debt of $285,000.00)
David A. Noveras (David) and Leticia T. Noveras (Leticia) were 
married on 3 December 1988 in Quezon City, Philippines. They  Furniture and furnishings
resided in California, United States of America (USA) where they  Upon learning that David had an extra­marital affair, Leticia filed a
$3,000
eventually acquired American citizenship. They then begot two  petition for divorce with the Superior Court of California, County 
children, namely: Jerome T. Noveras, who was born on 4  Jewelries (ring and watch) of San Mateo, USA. The California court granted the divorce on 
November 1990 and Jena T. Noveras, born on 2 May 1993. David  24 June 2005 and judgment was duly entered on 29 June 2005.6 
was engaged in courier service business while Leticia worked as a  $9,000
The California court granted to Leticia the custody of her two 
nurse in San Francisco, California. 2000 Nissan Frontier 4x4 pickup truck children, as well as all the couple’s properties in the 
USA.7cralawlawlibrary
$13,770.00
During the marriage, they acquired the following properties in the  Bank of America Checking Account
Philippines and in the USA:chanRoblesvirtualLawlibrary On 8 August 2005, Leticia filed a petition for Judicial Separation 
$8,000
of Conjugal Property before the RTC of Baler, Aurora. She relied 
Bank of America Cash Deposit on the 3 December 2003 Joint Affidavit and David’s failure to 
PHILIPPINES comply with his obligation under the same. She prayed for: 1) the 
$10,000.00 power to administer all conjugal properties in the Philippines; 2) 
PROPERTY
Life Insurance (Cash Value) David and his partner to cease and desist from selling the subject 
conjugal properties; 3) the declaration that all conjugal properties 
$100,000.00 be forfeited in favor of her children; 4) David to remit half of the 
FAIR MARKET VALUE
Retirement, pension, profit­sharing, annuities purchase price as share of Leticia from the sale of the Sampaloc 

102
property; and 5) the payment of P50,000.00 and P100,000.00  P5,000.00 to respondent David A. Noveras and P405,000.00 to the 
litigation expenses.8cralawlawlibrary two children. The share of the respondent may be paid to him 
On 8 December 2006, the RTC rendered judgment as 
directly but the share of the two children shall be deposited with a 
follows:chanRoblesvirtualLawlibrary
local bank in Baler, Aurora, in a joint account to be taken out in 
In his Answer, David stated that a judgment for the dissolution of  their names, withdrawal from which shall only be made by them or
their marriage was entered on 29 June 2005 by the Superior Court  by their representative duly authorized with a Special Power of 
The absolute community of property of the parties is hereby 
of California, County of San Mateo. He demanded that the  Attorney. Such payment/deposit shall be made within the period of
declared DISSOLVED;
conjugal partnership properties, which also include the USA  thirty (30) days after receipt of a copy of this Decision, with the 
properties, be liquidated and that all expenses of liquidation,  The net assets of the absolute community of property of the parties  passbook of the joint account to be submitted to the custody of the 
including attorney’s fees of both parties be charged against the  in the Philippines are hereby ordered to be awarded to respondent  Clerk of Court of this Court within the same period. Said passbook
conjugal partnership.9cralawlawlibrary David A. Noveras only, with the properties in the United States of  can be withdrawn from the Clerk of Court only by the children or 
America remaining in the sole ownership of petitioner Leticia  their attorney­in­fact; and
Noveras a.k.a. Leticia Tacbiana pursuant to the divorce decree 
The litigation expenses and attorney’s fees incurred by the parties 
The RTC of Baler, Aurora simplified the issues as  issued by the Superior Court of California, County of San Mateo, 
shall be shouldered by them individually.11
follow:chanRoblesvirtualLawlibrary United States of America, dissolving the marriage of the parties as 
of June 24, 2005. The titles presently covering said properties shall
be cancelled and new titles be issued in the name of the party to 
The trial court recognized that since the parties are US citizens, the
Whether or not respondent David A. Noveras committed acts of  whom said properties are awarded;
laws that cover their legal and personal status are those of the 
abandonment and marital infidelity which can result into the 
One­half of the properties awarded to respondent David A.  USA. With respect to their marriage, the parties are divorced by 
forfeiture of the parties’ properties in favor of the petitioner and 
Noveras in the preceding paragraph are hereby given to Jerome  virtue of the decree of dissolution of their marriage issued by the 
their two (2) children.
and Jena, his two minor children with petitioner Leticia Noveras  Superior Court of California, County of San Mateo on 24 June 
Whether or not the Court has jurisdiction over the properties in  a.k.a. Leticia Tacbiana as their presumptive legitimes and said  2005. Under their law, the parties’ marriage had already been 
California, U.S.A. and the same can be included in the judicial  legitimes must be annotated on the titles covering the said  dissolved. Thus, the trial court considered the petition filed by 
separation prayed for. properties. Their share in the income from these properties shall be Leticia as one for liquidation of the absolute community of 
remitted to them annually by the respondent within the first half of  property regime with the determination of the legitimes, support 
Whether or not the “Joint Affidavit” x x x executed by petitioner  and custody of the children, instead of an action for judicial 
January of each year, starting January 2008;
Leticia T. Noveras and respondent David A. Noveras will amount  separation of conjugal property.
to a waiver or forfeiture of the latter’s property rights over their  One­half of the properties in the United States of America awarded
conjugal properties. to petitioner Leticia Noveras a.k.a. Leticia Tacbiana in paragraph 2
are hereby given to Jerome and Jena, her two minor children with 
Whether or not Leticia T. Noveras is entitled to reimbursement of  With respect to their property relations, the trial court first 
respondent David A. Noveras as their presumptive legitimes and 
one­half of the P2.2 [M]illion sales proceeds of their property in  classified their property regime as absolute community of property 
said legitimes must be annotated on the titles/documents covering 
Sampaloc, Manila and one­half of the P1.5 [M]illion used to  because they did not execute any marriage settlement before the 
the said properties. Their share in the income from these 
redeem the property of Atty. Isaias Noveras, including interests  solemnization of their marriage pursuant to Article 75 of the 
properties, if any, shall be remitted to them annually by the 
and charges. Family Code. Then, the trial court ruled that in accordance with the
petitioner within the first half of January of each year, starting 
doctrine of processual presumption, Philippine law should apply 
How the absolute community properties should be distributed. January 2008;
because the court cannot take judicial notice of the US law since 
Whether or not the attorney’s fees and litigation expenses of the  For the support of their two (2) minor children, Jerome and Jena,  the parties did not submit any proof of their national law. The trial 
parties were chargeable against their conjugal properties. respondent David A. Noveras shall give them US$100.00 as  court held that as the instant petition does not fall under the 
monthly allowance in addition to their income from their  provisions of the law for the grant of judicial separation of 
presumptive legitimes, while petitioner Leticia Tacbiana shall take  properties, the absolute community properties cannot be forfeited 
Corollary to the above is the issue of:chanRoblesvirtualLawlibrary care of their food, clothing, education and other needs while they  in favor of Leticia and her children. Moreover, the trial court 
are in her custody in the USA. The monthly allowance due from  observed that Leticia failed to prove abandonment and infidelity 
the respondent shall be increased in the future as the needs of the  with preponderant evidence.
Whether or not the two common children of the parties are entitled  children require and his financial capacity can afford;
to support and presumptive legitimes.10cralawlawlibrary Of the unpaid amount of P410,000.00 on the purchase price of the 
Sampaloc property, the Paringit Spouses are hereby ordered to pay 
103
The trial court however ruled that Leticia is not entitled to the  6. Respondent David A. Noveras and petitioner Leticia Tacbiana 
reimbursements she is praying for considering that she already  (sic) are each ordered to pay the amount of P520,000.00 to their 
In summary and review, the basic facts are: David and Leticia are 
acquired all of the properties in the USA. Relying still on the  two children, Jerome and Jena, as their presumptive legitimes from
US citizens who own properties in the USA and in the Philippines. 
principle of equity, the Court also adjudicated the Philippine  the sale of the Sampaloc property inclusive of the receivables 
Leticia obtained a decree of divorce from the Superior Court of 
properties to David, subject to the payment of the children’s  therefrom, which shall be deposited to a local bank of Baler, 
California in June 2005 wherein the court awarded all the 
presumptive legitimes. The trial court held that under Article 89 of  Aurora, under a joint account in the latter’s names. The 
properties in the USA to Leticia. With respect to their properties in
the Family Code, the waiver or renunciation made by David of his  payment/deposit shall be made within a period of thirty (30) days 
the Philippines, Leticia filed a petition for judicial separation of 
property rights in the Joint Affidavit is void. from receipt of a copy of this Decision and the corresponding 
conjugal properties.
passbook entrusted to the custody of the Clerk of Court a quo 
within the same period, withdrawable only by the children or their 
On appeal, the Court of Appeals modified the trial court’s Decision attorney­in­fact.
At the outset, the trial court erred in recognizing the divorce decree
by directing the equal division of the Philippine properties between
which severed the bond of marriage between the parties. In Corpuz
the spouses. Moreover with respect to the common children’s 
v. Sto. Tomas,13 we stated that:chanRoblesvirtualLawlibrary
presumptive legitime, the appellate court ordered both spouses to  A number 8 is hereby added, which shall read as 
each pay their children the amount of P520,000.00,  follows:chanRoblesvirtualLawlibrary
thus:chanRoblesvirtualLawlibrary
The starting point in any recognition of a foreign divorce judgment
is the acknowledgment that our courts do not take judicial notice of
8. Respondent David A. Noveras is hereby ordered to pay 
foreign judgments and laws. Justice Herrera explained that, as a 
WHEREFORE, the instant appeal is PARTLY GRANTED.  petitioner Leticia Tacbiana (sic) the amount of P1,040,000.00 
rule, “no sovereign is bound to give effect within its dominion to a 
Numbers 2, 4 and 6 of the assailed Decision dated December 8,  representing her share in the proceeds from the sale of the 
judgment rendered by a tribunal of another country.” This means 
2006 of Branch 96, RTC of Baler, Aurora Province, in Civil Case  Sampaloc property.
that the foreign judgment and its authenticity must be proven as 
No. 828 are hereby MODIFIED to read as 
facts under our rules on evidence, together with the alien’s 
follows:chanRoblesvirtualLawlibrary
applicable national law to show the effect of the judgment on the 
The last paragraph shall read as 
alien himself or herself. The recognition may be made in an action 
follows:chanRoblesvirtualLawlibrary
instituted specifically for the purpose or in another action where a 
2. The net assets of the absolute community of property of the 
party invokes the foreign decree as an integral aspect of his claim 
parties in the Philippines are hereby divided equally between 
or defense.14
petitioner Leticia Noveras a.k.a. Leticia Tacbiana (sic) and  Send a copy of this Decision to the local civil registry of Baler, 
respondent David A. Noveras; Aurora; the local civil registry of Quezon City; the Civil Registrar­
General, National Statistics Office, Vibal Building, Times Street 
The requirements of presenting the foreign divorce decree and the 
corner EDSA, Quezon City; the Office of the Registry of Deeds for
national law of the foreigner must comply with our Rules of 
x x x the Province of Aurora; and to the children, Jerome Noveras and 
Evidence. Specifically, for Philippine courts to recognize a foreign 
Jena Noveras.
judgment relating to the status of a marriage, a copy of the foreign 
judgment may be admitted in evidence and proven as a fact under 
4. One­half of the properties awarded to petitioner Leticia 
Rule 132, Sections 24 and 25, in relation to Rule 39, Section 48(b) 
Tacbiana (sic) in paragraph 2 shall pertain to her minor children,  The rest of the Decision is AFFIRMED.12chanrobleslaw
of the Rules of Court.15cralawlawlibrary
Jerome and Jena, as their presumptive legitimes which shall be 
annotated on the titles/documents covering the said properties. 
Their share in the income therefrom, if any, shall be remitted to  In the present petition, David insists that the Court of Appeals 
Under Section 24 of Rule 132, the record of public documents of a 
them by petitioner annually within the first half of January, starting should have recognized the California Judgment which awarded 
sovereign authority or tribunal may be proved by: (1) an official 
2008; the Philippine properties to him because said judgment was part of 
publication thereof or (2) a copy attested by the officer having the 
the pleading presented and offered in evidence before the trial 
legal custody thereof. Such official publication or copy must be 
court. David argues that allowing Leticia to share in the Philippine 
accompanied, if the record is not kept in the Philippines, with a 
x x x properties is tantamount to unjust enrichment in favor of Leticia 
certificate that the attesting officer has the legal custody thereof. 
considering that the latter was already granted all US properties by 
The certificate may be issued by any of the authorized Philippine 
the California court.
embassy or consular officials stationed in the foreign country in 

104
which the record is kept, and authenticated by the seal of his office. properties under paragraph 4 of Article 135 of the Family Code. 
The attestation must state, in substance, that the copy is a correct  The trial court ratiocinated:chanRoblesvirtualLawlibrary
Leticia anchored the filing of the instant petition for judicial 
copy of the original, or a specific part thereof, as the case may be, 
separation of property on paragraphs 4 and 6 of Article 135 of the 
and must be under the official seal of the attesting officer.
Family Code, to wit:chanRoblesvirtualLawlibrary
Moreover, abandonment, under Article 101 of the Family Code 
quoted above, must be for a valid cause and the spouse is deemed 
Section 25 of the same Rule states that whenever a copy of a  to have abandoned the other when he/she has left the conjugal 
Art. 135. Any of the following shall be considered sufficient cause 
document or record is attested for the purpose of evidence, the  dwelling without intention of returning. The intention of not 
for judicial separation of property:chanRoblesvirtualLawlibrary
attestation must state, in substance, that the copy is a correct copy  returning is prima facie presumed if the allegedly [sic] abandoning 
of the original, or a specific part thereof, as the case may be. The  spouse failed to give any information as to his or her whereabouts 
attestation must be under the official seal of the attesting officer, if  within the period of three months from such abandonment.
(1)
there be any, or if he be the clerk of a court having a seal, under the
seal of such court. That the spouse of the petitioner has been sentenced to a penalty 
which carries with it civil interdiction; In the instant case, the petitioner knows that the respondent has 
returned to and stayed at his hometown in Maria Aurora, 
(2)
Based on the records, only the divorce decree was presented in  Philippines, as she even went several times to visit him there after 
evidence. The required certificates to prove its authenticity, as well That the spouse of the petitioner has been judicially declared an  the alleged abandonment. Also, the respondent has been going 
as the pertinent California law on divorce were not presented. absentee; back to the USA to visit her and their children until the relations 
between them worsened. The last visit of said respondent was in 
(3) October 2004 when he and the petitioner discussed the filing by 
It may be noted that in Bayot v. Court of Appeals,16 we relaxed  That loss of parental authority of the spouse of petitioner has been  the latter of a petition for dissolution of marriage with the 
the requirement on certification where we held that “[petitioner  decreed by the court; California court. Such turn for the worse of their relationship and 
therein] was clearly an American citizen when she secured the  the filing of the said petition can also be considered as valid causes
divorce and that divorce is recognized and allowed in any of the  (4) for the respondent to stay in the Philippines.19chanrobleslaw
States of the Union, the presentation of a copy of foreign divorce  That the spouse of the petitioner has abandoned the latter or failed 
decree duly authenticated by the foreign court issuing said decree  to comply with his or her obligations to the family as provided for 
is, as here, sufficient.” In this case however, it appears that there is  in Article 101; Separation in fact for one year as a ground to grant a judicial 
no seal from the office where the divorce decree was obtained. separation of property was not tackled in the trial court’s decision 
(5) because, the trial court erroneously treated the petition as 
That the spouse granted the power of administration in the  liquidation of the absolute community of properties.
Even if we apply the doctrine of processual presumption17 as the  marriage settlements has abused that power; and
lower courts did with respect to the property regime of the parties, 
the recognition of divorce is entirely a different matter because, to  (6) The records of this case are replete with evidence that Leticia and 
begin with, divorce is not recognized between Filipino citizens in  That at the time of the petition, the spouses have been separated in  David had indeed separated for more than a year and that 
the Philippines. fact for at least one year and reconciliation is highly improbable. reconciliation is highly improbable. First, while actual 
abandonment had not been proven, it is undisputed that the spouses
had been living separately since 2003 when David decided to go 
Absent a valid recognition of the divorce decree, it follows that the back to the Philippines to set up his own business. Second, Leticia 
In the cases provided for in Numbers (1), (2), and (3), the 
parties are still legally married in the Philippines. The trial court  heard from her friends that David has been cohabiting with 
presentation of the final judgment against the guilty or absent 
thus erred in proceeding directly to liquidation. Estrellita Martinez, who represented herself as Estrellita Noveras. 
spouse shall be enough basis for the grant of the decree of judicial 
Editha Apolonio, who worked in the hospital where David was 
separation of property. (Emphasis supplied).
once confined, testified that she saw the name of Estrellita listed as
As a general rule, any modification in the marriage settlements  the wife of David in the Consent for Operation form.20 Third and 
must be made before the celebration of marriage. An exception to  more significantly, they had filed for divorce and it was granted by
The trial court had categorically ruled that there was no 
this rule is allowed provided that the modification is judicially  the California court in June 2005.
abandonment in this case to necessitate judicial separation of 
approved and refers only to the instances provided in Articles 66, 
67, 128, 135 and 136 of the Family Code.18cralawlawlibrary
105
Having established that Leticia and David had actually separated  Whatever remains of the exclusive properties of the spouses shall  children’s presumptive legitimes, which the appellate court 
for at least one year, the petition for judicial separation of absolute  thereafter be delivered to each of them. explained in this wise:chanRoblesvirtualLawlibrary
community of property should be granted.
(4)

The net remainder of the properties of the absolute community  Leticia and David shall likewise have an equal share in the 
The grant of the judicial separation of the absolute community  shall constitute its net assets, which shall be divided equally  proceeds of the Sampaloc property. While both claimed to have 
property automatically dissolves the absolute community regime,  between husband and wife, unless a different proportion or  contributed to the redemption of the Noveras property, absent a 
as stated in the 4th paragraph of Article 99 of the Family Code,  division was agreed upon in the marriage settlements, or unless  clear showing where their contributions came from, the same is 
thus:chanRoblesvirtualLawlibrary there has been a voluntary waiver of such share provided in this  presumed to have come from the community property. Thus, 
Code. For purposes of computing the net profits subject to  Leticia is not entitled to reimbursement of half of the redemption 
forfeiture in accordance with Articles 43, No. (2) and 63, No. (2),  money.
Art. 99. The absolute community  the said profits shall be the increase in value between the market 
terminates:chanRoblesvirtualLawlibrary value of the community property at the time of the celebration of 
the marriage and the market value at the time of its dissolution. David’s allegation that he used part of the proceeds from the sale 
of the Sampaloc property for the benefit of the absolute community
(5)
(1) Upon the death of either spouse; cannot be given full credence. Only the amount of P120,000.00 
The presumptive legitimes of the common children shall be  incurred in going to and from the U.S.A. may be charged thereto. 
(2) When there is a decree of legal separation;
delivered upon partition, in accordance with Article 51. Election expenses in the amount of P300,000.00 when he ran as 
(3) When the marriage is annulled or declared void; or municipal councilor cannot be allowed in the absence of receipts or
(6)
at least the Statement of Contributions and Expenditures required 
(4) In case of judicial separation of property during the marriage  under Section 14 of Republic Act No. 7166 duly received by the 
Unless otherwise agreed upon by the parties, in the partition of the 
under Articles 134 to 138. (Emphasis supplied). Commission on Elections. Likewise, expenses incurred to settle the
properties, the conjugal dwelling and the lot on which it is situated 
shall be adjudicated to the spouse with whom the majority of the  criminal case of his personal driver is not deductible as the same 
common children choose to remain. Children below the age of  had not benefited the family. In sum, Leticia and David shall share 
Under Article 102 of the same Code, liquidation follows the  seven years are deemed to have chosen the mother, unless the court equally in the proceeds of the sale net of the amount of 
dissolution of the absolute community regime and the following  has decided otherwise. In case there is no such majority, the court  P120,000.00 or in the respective amounts of P1,040,000.00.
procedure should apply:chanRoblesvirtualLawlibrary shall decide, taking into consideration the best interests of said 
children.
x x x x
Art. 102. Upon dissolution of the absolute community regime, the 
following procedure shall apply:chanRoblesvirtualLawlibrary At the risk of being repetitious, we will not remand the case to the 
trial court. Instead, we shall adopt the modifications made by the  Under the first paragraph of Article 888 of the Civil Code, “(t)he 
Court of Appeals on the trial court’s Decision with respect to  legitime of legitimate children and descendants consists of one­half
(1) liquidation. of the hereditary estate of the father and of the mother.” The 
An inventory shall be prepared, listing separately all the properties  children are therefore entitled to half of the share of each spouse in
of the absolute community and the exclusive properties of each  the net assets of the absolute community, which shall be annotated 
spouse. We agree with the appellate court that the Philippine courts did not on the titles/documents covering the same, as well as to their 
acquire jurisdiction over the California properties of David and  respective shares in the net proceeds from the sale of the Sampaloc
(2) Leticia. Indeed, Article 16 of the Civil Code clearly states that real  property including the receivables from Sps. Paringit in the amount
property as well as personal property is subject to the law of the  of P410,000.00. Consequently, David and Leticia should each pay 
The debts and obligations of the absolute community shall be paid 
country where it is situated. Thus, liquidation shall only be limited  them the amount of P520,000.00 as their presumptive legitimes 
out of its assets. In case of insufficiency of said assets, the spouses 
to the Philippine properties. therefrom.21
shall be solidarily liable for the unpaid balance with their separate 
properties in accordance with the provisions of the second 
paragraph of Article 94.
We affirm the modification made by the Court of Appeals with  WHEREFORE, the petition is DENIED. The assailed Decision of 
(3) respect to the share of the spouses in the absolute community  the Court of Appeals in CA G.R. CV No. 88686 is AFFIRMED.
properties in the Philippines, as well as the payment of their 
106
SO ORDERED.cralawred 10 Id. at 267.

Sereno,* C.J., Carpio, J., (Chairperson), Velasco, Jr.,** Del  11 Id. at 287­288.
Castillo, and Perez, JJ., concur.

12Rollo, pp. 36­37.
Endnotes:

13 G.R. No. 186571, 11 August 2010, 628 SCRA 266.
* Per Raffle dated 28 July 2014.

14 Id. at 281­282.
** Per Special Order No. 1757 dated 20 August 2014.

15Fujiki v. Marinay, G.R. No. 196049, 26 June 2013.
1 Penned by Associate Justice Estela M. Perlas­Bernabe (now 
Supreme Court Associate Justice) with Associate Justices Portia 
Aliño­Hormachuelos and Rosmari D. Carandang, concurring.  16 591 Phil. 452, 470 (2008).
Rollo, pp. 26­37.

2 Presided by Judge Corazon D. Soluren. Records, pp. 262­288.
3 Id. at 2.
17 Processual presumption means that where a foreign law is not 
pleaded or, even if pleaded, is not proved, the presumption is that 
foreign law is the same as ours. See EDI­Staffbuilders Int’l. Inc. v. 
NLRC, 563 Phil. 1, 22 (2007).

18 Sta. Maria, Persons and Family Relations Law, Fourth Edition, 
4 Id. at 27­28. 2004, p. 396.

5 Id. at 16. 19 Records, p. 280.

6 Id. at 77. 20 TSN, 9 March 2006, p. 13.

7 Id. at 79­81. 21Rollo, pp. 34­35.

8 Id. at 4­5.

9 Id. at 23­26.

107
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 122749 July 31, 1996
ANTONIO A. S. VALDEZ, petitioner,
vs.
REGIONAL TRIAL COURT, BRANCH 102, QUEZON 
CITY, and CONSUELO M. GOMEZ­VALDEZ, 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. Q­92­12539. 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.   Q­92­12539,   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 Gomez­Valdez 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
Gomez­Valdes.
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.
108
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.
The provisions of Articles 102 and 129 of the Family Code
finds no application since Article 102 refers to the procedure
for the liquidation of the conjugal partnership property and
Article  129  refers   to  the   procedure  for   the  liquidation  of
the absolute community of property.4
Petitioner moved for a reconsideration of the order. The motion
was denied on 30 October 1995.
In his recourse to this Court, petitioner submits that Articles 50, 51
and 52 of the Family Code should be held controlling: he argues
that:
I
Article   147   of   the   Family   Code   does   not   apply   to   cases
where the parties are 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 co­ownership.
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 co­ownership 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 considered as having contributed thereto jointly if
said party's "efforts consisted in the care and maintenance of the
family household."8 Unlike the conjugal partnership of gains, the
fruits of the couple's separate property are not included in the co­
ownership.
Article 147 of the Family Code, in the substance and to the above
extent, has clarified Article 144 of the Civil Code; in addition, the
law now expressly provides that —
(a) Neither party can dispose or encumber by act intervivos his or
her share in co­ownership 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   co­ownership   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
cohabitation9 or declaration of nullity of the marriage. 10
When the common­law 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
109
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 co­ownership 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   common­law   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   co­ownership   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.

110
 Republic of the Philippines 1)   Declaring   and   decreeing   the   marriage   entered   into
SUPREME COURT between   plaintiff   Noel   A.   Buenaventura   and   defendant
Manila Isabel Lucia Singh Buenaventura on July 4, 1979, null and
void ab initio;
FIRST DIVISION
2) Ordering the plaintiff to pay defendant moral damages in
G.R. No. 127358             March 31, 2005 the amount of 2.5 million pesos and exemplary damages of
1   million   pesos   with   6%   interest   from   the   date   of   this
NOEL BUENAVENTURA, Petitioner, decision plus attorney’s fees of P100,000.00;
vs.
COURT OF APPEALS and ISABEL LUCIA SINGH  3) Ordering the plaintiff to pay the defendant expenses of
BUENAVENTURA, respondents. litigation of P50,000.00, plus costs;
x­­­­­­­­­­­­­­­­­­­x 4)   Ordering   the   liquidation   of   the   assets   of   the   conjugal
partnership   property[,]   particularly   the   plaintiff’s
separation/retirement   benefits   received   from   the   Far   East
G.R. No. 127449             March 31, 2005
Bank [and] Trust Company[,] by ceding, giving and paying
to   her   fifty   percent   (50%)   of   the   net   amount
NOEL BUENAVENTURA, Petitioner,
of P3,675,335.79   or P1,837,667.89   together   with   12%
vs. interest per annum from the date of this decision and one­
COURT OF APPEALS and ISABEL LUCIA SINGH  half  (1/2)  of  his outstanding  shares of  stock with Manila
BUENAVENTURA, Respondents. Memorial Park and Provident Group of Companies;
D E C I S I O N 5) Ordering him to give a regular support in favor of his son
Javy   Singh   Buenaventura   in   the   amount   of P15,000.00
AZCUNA, J.: monthly, subject to modification as the necessity arises;
These   cases   involve   a   petition   for   the   declaration   of   nullity   of 6) Awarding the care and custody of the minor Javy Singh
marriage, which was filed by petitioner Noel Buenaventura on July Buenaventura to his mother, the herein defendant; and
12, 1992, on the ground of the alleged psychological incapacity of
his   wife,   Isabel   Singh   Buenaventura,   herein   respondent.   After 7) Hereby authorizing the defendant to revert back to the
respondent   filed   her   answer,   petitioner,   with   leave   of   court, use of her maiden family name Singh.
amended his petition  by stating that both he  and his  wife  were
psychologically   incapacitated   to   comply   with   the   essential Let copies of this decision be furnished the appropriate civil
obligations of marriage. In response, respondent filed an amended registry and registries of properties.
answer   denying   the   allegation   that   she   was   psychologically
incapacitated.1
SO ORDERED.2
On   July   31,   1995,   the   Regional   Trial   Court   promulgated   a
Petitioner  appealed the  above  decision to the  Court of Appeals.
Decision, the dispositive portion of which reads:
While the case was pending in the appellate court, respondent filed
a motion to increase the P15,000 monthly support pendente lite of
WHEREFORE, judgment is hereby rendered as follows:
their son Javy Singh Buenaventura. Petitioner filed an opposition
thereto, praying that it be denied or that such incident be set for
oral argument.3
111
On September 2, 1996, the Court of Appeals issued a Resolution
increasing the support pendente lite to P20,000.4 Petitioner filed a
motion for reconsideration questioning the said Resolution.5
On October 8, 1996, the appellate court promulgated a Decision
dismissing petitioner’s appeal for lack of merit and affirming in
toto   the   trial   court’s   decision.6 Petitioner   filed   a   motion   for
reconsideration   which   was   denied.   From   the   abovementioned
Decision,   petitioner   filed   the   instant   Petition   for   Review
on Certiorari.
On November 13, 1996, through another Resolution, the Court of
Appeals   denied   petitioner’s   motion   for   reconsideration   of   the
September   2,   1996   Resolution,   which   increased   the   monthly
support   for   the   son.7 Petitioner   filed   a   Petition   for Certiorari to
question these two Resolutions.
On July 9, 1997, the  Petition for  Review  on Certiorari8 and the
Petition for Certiorari9 were ordered consolidated by this Court.10
In the Petition for Review on Certiorari petitioner claims that the
Court   of   Appeals   decided  the   case   not   in   accord   with  law   and
jurisprudence, thus:
1.   WHEN   IT   AWARDED   DEFENDANT­APPELLEE
MORAL   DAMAGES   IN   THE   AMOUNT   OF   P2.5
MILLION   AND   EXEMPLARY   DAMAGES   OF   P1
MILLION, WITH 6% INTEREST FROM THE DATE OF
ITS DECISION, WITHOUT ANY LEGAL AND MORAL
BASIS;
2.   WHEN   IT   AWARDED P100,000.00   ATTORNEY’S
FEES   AND P50,000.00   EXPENSES   OF   LITIGATION,
PLUS COSTS, TO DEFENDANT­APPELLEE, WITHOUT
FACTUAL AND LEGAL BASIS;
3.   WHEN   IT   ORDERED   PLAINTIFF­APPELLANT
NOEL   TO   PAY   DEFENDANT­APPELLEE   ONE­HALF
OR P1,837,667.89   OUT   OF   HIS   RETIREMENT
BENEFITS RECEIVED  FROM THE FAR EAST  BANK
AND   TRUST   CO.,   WITH   12%   INTEREST   THEREON
FROM   THE   DATE   OF   ITS   DECISION,
NOTWITHSTANDING   THAT   SAID   RETIREMENT
BENEFITS   ARE   GRATUITOUS   AND   EXCLUSIVE
PROPERTY  OF   NOEL,  AND  ALSO  TO   DELIVER  TO
 DEFENDANT­APPELLEE ONE­HALF OF HIS SHARES
OF   STOCK   WITH   THE   MANILA   MEMORIAL   PARK
AND   THE   PROVIDENT   GROUP   OF   COMPANIES,
ALTHOUGH   SAID   SHARES   OF   STOCK   WERE
ACQUIRED   BY   NOEL   BEFORE   HIS   MARRIAGE   TO
RESPONDENT   ISABEL   AND   ARE,   THEREFORE,
AGAIN HIS EXCLUSIVE PROPERTIES; AND
4.   WHEN   IT   AWARDED   EXCLUSIVE   CARE   AND
CUSTODY  OVER   THE  PARTIES’   MINOR  CHILD   TO
DEFENDANT­APPELLEE   WITHOUT   ASKING   THE
CHILD   (WHO   WAS   ALREADY   13   YEARS   OLD   AT
THAT TIME) HIS CHOICE AS TO WHOM, BETWEEN
HIS   TWO   PARENTS,   HE   WOULD   LIKE   TO   HAVE
CUSTODY OVER HIS PERSON.11
In   the   Petition   for Certiorari,   petitioner   advances   the   following
contentions:
THE   COURT   OF   APPEALS   GRAVELY   ABUSED   ITS
DISCRETION   WHEN   IT   REFUSED   TO   SET
RESPONDENT’S   MOTION   FOR   INCREASED
SUPPORT FOR THE PARTIES’ SON FOR HEARING.12
THERE   WAS   NO   NEED   FOR   THE   COURT   OF
APPEALS   TO   INCREASE   JAVY’S   MONTHLY
SUPPORT   OF   P15,000.00   BEING   GIVEN   BY
PETITIONER EVEN AT PRESENT PRICES.13
IN  RESOLVING  RESPONDENT’S  MOTION  FOR  THE
INCREASE   OF   JAVY’S   SUPPORT,   THE   COURT   OF
APPEALS SHOULD HAVE EXAMINED THE LIST OF
EXPENSES   SUBMITTED   BY   RESPONDENT   IN   THE
LIGHT   OF   PETITIONER’S   OBJECTIONS   THERETO,
INSTEAD   OF   MERELY   ASSUMING   THAT   JAVY   IS
ENTITLED TO A P5,000 INCREASE IN SUPPORT  AS
SAID AMOUNT IS "TOO MINIMAL."14
LIKEWISE, THE COURT OF APPEALS SHOULD HAVE
GIVEN   PETITIONER   AN   OPPORTUNITY   TO   PROVE
HIS PRESENT INCOME TO SHOW THAT HE CANNOT
The award by the trial court of moral damages is based on Articles
AFFORD TO INCREASE JAVY’S SUPPORT.15
2217 and 21 of the Civil Code, which read as follows:
With regard to the first issue in the main case, the Court of Appeals
articulated:
On Assignment of Error C, the trial court, after findings of
fact ascertained from the testimonies not only of the parties
particularly the defendant­appellee but likewise, those of the
two psychologists, awarded damages on the basis of Articles
21, 2217 and 2229 of the Civil Code of the Philippines.
Thus, the lower court found that plaintiff­appellant deceived
the defendant­appellee into marrying him by professing true
love  instead of  revealing to her that he  was under heavy
parental   pressure   to   marry   and   that   because   of   pride   he
married defendant­appellee; that he was not ready to enter
into marriage as in fact his career was and always would be
his first priority; that he was unable to relate not only to
defendant­appellee as a husband but also to his son, Javy, as
a father; that he had no inclination to make the marriage
work such that in times of trouble, he chose the easiest way
out, that of leaving defendant–appellee and their son; that he
had no desire to keep defendant­appellee and their son as
proved by his reluctance and later, refusal to reconcile after
their separation; that the aforementioned caused defendant­
appellee   to   suffer   mental   anguish,   anxiety,   besmirched
reputation,   sleepless   nights   not   only   in   those   years   the
parties   were   together   but   also   after   and   throughout   their
separation.
Plaintiff­appellant   assails  the  trial  court’s  decision   on  the
ground that unlike those arising from a breach in ordinary
contracts,   damages   arising   as   a   consequence   of   marriage
may not be awarded. While it is correct that there is, as yet,
no decided case by the Supreme Court where damages by
reason  of   the   performance   or   non­performance  of  marital
obligations were awarded, it does not follow that no such
award for damages may be made.
Defendant­appellee,   in   her   amended   answer,   specifically
prayed   for   moral   and   exemplary   damages   in   the   total
amount of 7 million pesos. The lower court, in the exercise
of its discretion, found full justification of awarding at least
half of what was originally prayed for. We find no reason to
disturb the ruling of the trial court.16
ART.   2217.   Moral   damages   include   physical   suffering,
mental   anguish,   fright,   serious   anxiety,   besmirched
112
reputation,   wounded   feelings,   moral   shock,   social
humiliation,   and   similar   injury.   Though   incapable   of
pecuniary computation, moral damages may be recovered if
they are the proximate result of the defendant’s wrongful act
or omission.
ART. 21. Any person who wilfully causes loss or injury to
another in a manner that is contrary to morals, good customs
or public policy shall compensate the latter for the damage.
The trial court referred to Article 21 because Article 2219 17 of the
Civil Code enumerates the cases in which moral damages may be
recovered and it mentions Article 21 as one of the instances. It
must   be   noted   that   Article   21   states   that   the   individual   must
willfully cause loss or injury to another. There is a need that the act
is willful and hence done in complete freedom. In granting moral
damages, therefore, the trial court and the Court of Appeals could
not but have assumed that the acts on which the moral damages
were based were done willfully and freely, otherwise the grant of
moral damages would have no leg to stand on.
On   the   other   hand,   the   trial  court  declared   the   marriage   of   the
parties null and void based on Article 36 of the Family Code, due
to psychological incapacity of the petitioner, Noel Buenaventura.
Article 36 of the Family Code states:
A marriage contracted by any party who, at the time of the
celebration,   was   psychologically   incapacitated   to   comply
with   the   essential   marital   obligations   of   marriage,   shall
likewise be void even if such incapacity becomes manifest
only after its solemnization.
Psychological incapacity has been defined, thus:
.   .   .   no   less   than   a   mental   (not   physical)   incapacity   that
causes a party to be truly incognitive of the basic marital
covenants   that   concomitantly   must   be   assumed   and
discharged by the parties to the marriage which, as so
expressed by Article 68 of the Family Code, include their
mutual   obligations   to   live   together,   observe   love,   respect
and fidelity and render help and support. There is hardly any
doubt that the intendment of the law has been to confine the
meaning of "psychological incapacity" to the most serious
cases   of   personality   disorders   clearly   demonstrative   of
 an utter   insensitivity   or   inability   to   give   meaning   and
significance to the marriage. . . .18
The Court of Appeals and the trial court considered the acts of the
petitioner   after   the   marriage   as   proof   of   his   psychological
incapacity, and therefore a product of his incapacity or inability to
comply with the  essential obligations of marriage. Nevertheless,
said courts considered these acts as willful and hence as grounds
for granting moral damages. It is contradictory to characterize acts
as a product of  psychological incapacity, and hence beyond the
control of  the  party because of  an innate  inability, while at the
same time considering the same set of acts as willful. By declaring
the petitioner as psychologically incapacitated, the possibility of
awarding moral damages on the same set of facts was negated. The
award of moral damages should be predicated, not on the mere act
of entering into the marriage, but on specific evidence that it was
done deliberately and with malice by a party who had knowledge
of his or her disability and yet willfully concealed the same. No
such evidence appears to have been adduced in this case.
For the same reason, since psychological incapacity means that one
is truly incognitive of the basic marital covenants that one must
assume and discharge as a consequence of marriage, it removes the
basis for the contention that the petitioner purposely deceived the
private respondent. If the private respondent was deceived, it was
not due to a willful act on the part of the petitioner. Therefore, the
award of moral damages was without basis in law and in fact.
Since the grant of moral damages was not proper, it follows that
the grant of exemplary damages cannot stand since the Civil Code
provides   that   exemplary   damages   are   imposed in   addition to
moral, temperate, liquidated or compensatory damages.19
With   respect   to   the   grant   of   attorney’s   fees   and   expenses   of
litigation the trial court explained, thus:
Regarding   Attorney’s   fees,   Art.   2208   of   the   Civil   Code
authorizes   an   award   of   attorney’s   fees   and   expenses   of
litigation, other than judicial costs, when as in this case the
plaintiff’s act or omission has compelled the defendant to
litigate   and   to   incur   expenses   of   litigation   to   protect   her
interest   (par.   2),   and   where   the   Court   deems   it   just   and
equitable   that   attorney’s   fees   and   expenses   of   litigation
should be recovered. (par. 11)20
The Court of Appeals reasoned as follows:
On   Assignment   of   Error   D,   as   the   award   of   moral   and
exemplary damages is fully justified, the award of attorney’s
fees and costs of litigation by the trial court is likewise fully
justified.21
The acts or omissions of petitioner which led the lower court to
deduce   his   psychological   incapacity,   and   his   act   in   filing   the
complaint for the annulment of his marriage cannot be considered
as unduly compelling the private respondent to litigate, since both
are   grounded  on  petitioner’s   psychological  incapacity,   which  as
explained above is a mental incapacity causing an utter inability to
comply with the obligations of marriage. Hence, neither can be a
ground for  attorney’s  fees  and  litigation  expenses.  Furthermore,
since   the   award  of   moral   and   exemplary   damages  is   no  longer
justified, the award of attorney’s fees and expenses of litigation is
left without basis.
Anent the retirement benefits received from the Far East Bank and
Trust Co. and the shares of stock in the Manila Memorial Park and
the Provident Group of Companies, the trial court said:
The third issue that must be resolved by the Court is what to
do with the assets of the conjugal partnership in the event of
declaration  of  annulment of  the  marriage. The  Honorable
Supreme Court has held that the  declaration of  nullity of
marriage carries ipso facto a judgment for the liquidation of
property  (Domingo  v.  Court  of   Appeals,  et  al.,  G.R. No.
104818, Sept. 17, 1993, 226 SCRA, pp. 572 – 573, 586).
Thus, speaking through Justice Flerida Ruth P. Romero, it
was ruled in this case:
When   a   marriage   is   declared void   ab   initio,   the   law
states that the final judgment therein shall provide for
the   liquidation,   partition   and   distribution   of   the
properties of the spouses, the custody and support of the
common children and the delivery of their presumptive
legitimes, unless such matters had been adjudicated in
the previous proceedings.
The parties here were legally married on July 4, 1979, and
therefore, all property acquired during the marriage, whether
the   acquisition  appears  to  have  been  made, contracted or
registered in the name of one or both spouses, is presumed
113
to be conjugal unless the contrary is proved (Art. 116, New
Family Code; Art. 160, Civil Code). Art. 117 of the Family
Code enumerates what are conjugal partnership properties.
Among others they are the following:
1) Those acquired by onerous title during the marriage
at   the   expense   of   the   common   fund,   whether   the
acquisition be for the partnership, or for only one of the
spouses;
2)   Those   obtained   from   the   labor,   industry,   work   or
profession of either or both of the spouses;
3)   The   fruits,   natural,   industrial,   or   civil,   due   or
received   during   the   marriage   from   the   common
property, as well as the  net fruits from the  exclusive
property of each spouse. . . .
Applying   the   foregoing   legal   provisions,   and   without
prejudice to requiring an inventory of what are the parties’
conjugal properties and what are the exclusive properties of
each spouse, it was disclosed during the proceedings in this
case that the plaintiff who worked first as Branch Manager
and later as Vice­President of Far East Bank & Trust Co.
received separation/retirement package from the said bank
in   the   amount   of P3,701,500.00   which   after   certain
deductions amounting to P26,164.21 gave him a net amount
of P3,675,335.79   and   actually   paid   to   him   on   January   9,
1995 (Exhs. 6, 7, 8, 9, 10, 11). Not having shown debts or
obligations   other   than   those   deducted   from   the   said
retirement/separation   pay,   under   Art.   129   of   the   Family
Code   "The   net   remainder   of   the   conjugal   partnership
properties shall constitute the profits, which shall be divided
equally   between   husband   and   wife,   unless   a   different
proportion   or   division   was   agreed   upon   in   the   marriage
settlement or unless there has been a voluntary waiver or
forfeiture of such share as provided in this Code." In this
particular   case,   however,   there   had   been   no   marriage
settlement   between   the   parties,   nor   had   there   been   any
voluntary waiver or valid forfeiture of the defendant wife’s
share in the conjugal partnership properties. The previous
cession  and transfer  by  the   plaintiff  of  his  one­half  (1/2)
share in their residential house and lot covered by T.C.T.
No. S­35680 of the Registry of Deeds of Parañaque, Metro
Manila,   in   favor   of   the   defendant   as   stipulated   in   their
Compromise Agreement dated July 12, 1993, and approved
 by the Court in its Partial Decision dated August 6, 1993,
was actually intended to be in full settlement of any and all
demands for past support. In reality, the defendant wife had
allowed some concession in favor of the plaintiff husband,
for were the law strictly to be followed, in the process of
liquidation of the conjugal assets, the conjugal dwelling and
the lot on which it is situated shall, unless otherwise agreed
upon by the parties, be adjudicated to the spouse with whom
their   only   child   has   chosen   to   remain   (Art.   129,   par.   9).
Here, what was done was one­half (1/2) portion of the house
was ceded to defendant so that she will not claim anymore
for past unpaid support, while the other half was transferred
to their only child as his presumptive legitime.
Consequently, nothing yet has been given to the defendant
wife by way of her share in the conjugal properties, and it is
but just, lawful and fair, that she be  given one­half (1/2)
share of the separation/retirement benefits received by the
plaintiff the same being part of their conjugal partnership
properties having been obtained or derived from the labor,
industry, work or profession of said defendant husband in
accordance with Art. 117, par. 2 of the Family Code. For the
same   reason,   she   is   entitled   to   one­half   (1/2)   of   the
outstanding shares of stock of the plaintiff husband with the
Manila   Memorial   Park   and   the   Provident   Group   of
Companies.22
The Court of Appeals articulated on this matter as follows:
On   Assignment   of   Error   E,   plaintiff­appellant   assails   the
order   of   the   trial   court   for   him   to   give   one­half   of   his
separation/retirement benefits from Far East Bank & Trust
Company   and   half   of   his   outstanding   shares   in   Manila
Memorial Park and Provident Group of Companies to the
defendant­appellee   as   the   latter’s   share   in   the   conjugal
partnership.
On   August   6,   1993,   the   trial   court   rendered   a   Partial
Decision   approving   the   Compromise   Agreement   entered
into by the parties. In the same Compromise Agreement, the
parties   had   agreed   that   henceforth,   their   conjugal
partnership is dissolved. Thereafter, no steps were taken for
the liquidation of the conjugal partnership.
Finding that defendant­appellee is entitled to at least half of
the  separation/retirement benefits which plaintiff­appellant
received from Far East Bank & Trust Company upon his
retirement as Vice­President of said company for the reason
that the benefits accrued from plaintiff–appellant’s service
for the bank for a number of years, most of which while he
was   married   to   defendant­appellee,   the   trial   court
adjudicated the same. The same is true with the outstanding
shares of plaintiff­appellant in Manila Memorial Park and
Provident Group of Companies. As these were acquired by
the   plaintiff­appellant   at   the   time   he   was   married   to
defendant­appellee, the latter is entitled to one­half thereof
as her share in the conjugal partnership. We find no reason
to disturb the ruling of the trial court.23
Since   the   present   case   does   not   involve   the   annulment   of   a
bigamous   marriage,   the   provisions   of   Article   50   in   relation   to
Articles   41,   42   and   43   of   the   Family   Code,   providing   for   the
dissolution of the absolute community or conjugal partnership of
gains, as the case may be, do not apply. Rather, the general rule
applies, which is that in case a marriage is declared void ab initio,
the property regime applicable and to be liquidated, partitioned and
distributed is that of equal co­ownership.
In Valdes v. Regional Trial Court, Branch 102, Quezon City,24 this
Court expounded on the consequences of a void marriage on the
property   relations   of   the   spouses   and   specified   the   applicable
provisions of law:
The trial court correctly applied the law. In a void marriage,
regardless of the cause thereof, the property relations of the
parties during the period of cohabitation is governed by the
provisions of Article 147 or Article 148, such as the case
may be, of  the  Family  Code. Article  147 is a  remake  of
Article 144 of the Civil Code as interpreted and so applied
in previous cases; it provides:
ART.   147.   When   a   man   and   a   woman   who   are
capacitated to marry each other, live exclusively with
each other as husband and wife without the benefit of
marriage   or   under   a   void   marriage,   their   wages   and
salaries shall be owned by them in equal shares and the
property acquired by both of them through their work
or   industry   shall   be   governed   by   the   rules   on   co­
ownership.
In   the   absence   of   proof   to   the   contrary,   properties
acquired while they lived together shall be presumed to
114
have   been   obtained   by   their   joint   efforts,   work   or
industry, and shall be owned by them in equal shares.
For   purposes   of   this   Article,   a   party   who   did   not
participate in the acquisition by the other party of any
property shall be deemed to have contributed jointly in
the acquisition thereof if the former's efforts consisted
in the care and maintenance of the family and of the
household.
Neither   party   can   encumber   or   dispose   by   acts inter
vivos of his or her share in the property acquired during
cohabitation   and   owned   in   common,   without   the
consent of the other, until after the termination of their
cohabitation.
When only one of the parties to a void marriage is in
good faith, the share of the party in bad faith in the co­
ownership shall be forfeited in favor of their common
children. In case of default of or waiver by any or all of
the common children or their descendants, each vacant
share   shall   belong   to   the   respective   surviving
descendants. In the absence of descendants, such share
shall   belong   to   the   innocent   party.   In   all   cases,   the
forfeiture   shall   take   place   upon   termination   of   the
cohabitation.
This peculiar kind of co­ownership applies when a man and
a   woman,   suffering   no   legal   impediment   to   marry   each
other,   so   exclusively   live   together   as   husband   and   wife
under a void marriage or without the benefit of marriage.
The   term   "capacitated"   in   the   provision   (in   the   first
paragraph of the law) refers to the legal capacity of a party
to contract marriage, i.e., any "male or female of the age of
eighteen years or upwards not under any of the impediments
mentioned in Articles 37 and 38" of the Code.
Under   this   property   regime,   property   acquired   by   both
spouses   through   their work and industry shall   be   governed
by the rules on equal 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 still be
considered   as   having   contributed   thereto   jointly   if   said
party's "efforts consisted in the care and maintenance of the
family household." Unlike the conjugal partnership of gains,
the fruits of the couple's separate property are not included
in the co­ownership.
Article  147  of  the   Family   Code,  in   substance   and  to  the
above extent, has clarified Article 144 of the Civil Code; in
addition, the law now expressly provides that —
(a) Neither party can dispose or encumber by act[s] inter
vivos [of] his or her share in co­ownership property, without
the consent of the other, during the period of cohabitation;
and
(b) In the case of a void marriage, any party in bad faith
shall forfeit his or her share in the co­ownership in favor of
their common children; in default thereof or waiver by any
or   all   of   the   common   children,   each   vacant   share   shall
belong to the  respective surviving descendants, or still in
default thereof, to the innocent party. The forfeiture shall
take   place   upon   the   termination   of   the   cohabitation   or
declaration of nullity of the marriage.
… nevertheless, even as it may merely state the obvious, that
In deciding to take further cognizance of the issue on the
settlement of the parties' common property, the trial court
acted neither imprudently nor precipitately; a court which
had jurisdiction to declare the marriage a nullity must be
deemed likewise clothed with authority to resolve incidental
and consequential matters. Nor did it commit a reversible
error in ruling that petitioner and private respondent own the
"family   home"   and   all   their   common   property   in equal
shares, as well as in concluding that, in the liquidation and
partition of  the  property owned in common by them, the
provisions   on   co­ownership   under   the   Civil   Code,   not
Articles 50, 51 and 52, in relation to Articles 102 and 129,
of the Family Code, should aptly prevail. The rules set up to
govern the liquidation of either the absolute community or
the   conjugal   partnership   of   gains,   the   property   regimes
recognized for valid and voidable marriages (in the latter
case   until   the   contract   is   annulled),   are   irrelevant   to   the
liquidation   of   the   co­ownership   that   exists   between
common­law spouses. The first paragraph of Article 50 of
the Family Code, applying paragraphs (2), (3), (4) and (5) of
Article   43,   relates   only,   by   its   explicit   terms,
to voidable marriages and, exceptionally, to void marriages
under Article 40 of the Code, i.e., the declaration of nullity
of a subsequent marriage contracted by a spouse of a prior that the son, Javy Singh Buenaventura, as previously stated, has
void marriage before the latter is judicially declared void. attained the age of majority.
The   latter   is   a   special   rule   that   somehow   recognizes   the
philosophy   and   an   old   doctrine   that   void   marriages   are WHEREFORE,   the   Decision   of   the   Court   of   Appeals   dated
inexistent from the very beginning and no judicial decree is October   8,   1996   and   its   Resolution   dated   December   10,   1996
necessary   to   establish   their   nullity.   In   now   requiring which are contested in the Petition for Review (G.R. No. 127449),
for purposes   of   remarriage,   the   declaration   of   nullity   by are hereby MODIFIED, in that the award of moral and exemplary
final judgment of the previously contracted void marriage, damages,   attorney’s   fees,   expenses   of   litigation   and   costs   are
the   present   law   aims   to   do   away   with   any   continuing deleted.   The   order   giving   respondent   one­half   of   the   retirement
uncertainty on the status of the second marriage. It is not benefits of petitioner from Far East Bank and Trust Co. and one­
then illogical for the provisions of Article 43, in relation to half of petitioner’s shares of stock in Manila Memorial Park and in
Articles 41 and 42, of the Family Code, on the effects of the
the Provident Group of Companies is sustained but on the basis
termination of a subsequent marriage contracted during the
of   the   liquidation,   partition   and   distribution   of   the   co­
subsistence   of   a   previous   marriage   to   be   made
ownership  and  not  of  the  regime  of  conjugal  partnership of
applicable pro hac vice. In all other cases, it is not to be
gains. The rest of said Decision and Resolution are AFFIRMED.
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 The   Petition   for   Review   on Certiorari (G.R.   No.   127358)
other,   between   common­law   spouses   or   spouses   of   void contesting the Court of Appeals’ Resolutions of September 2, 1996
marriages, leaving to ordain, in the latter case, the ordinary and   November   13,   1996   which   increased   the   support pendente
rules  on  co­ownership  subject  to  the   provision  of   Article lite in favor of the parties’ son, Javy Singh Buenaventura, is now
147 and Article 148 of the Family Code. It must be stressed, MOOT and ACADEMIC and is, accordingly, DISMISSED.
the provisions of the Family Code on the "family home," No costs.
i.e.,   the   provisions   found   in   Title   V,   Chapter   2,   of   the
Family Code, remain in force and effect regardless of the
SO ORDERED.
property regime of the spouses.25
Davide, Jr., C.J., (Chairman), Quisumbing, Ynares­Santiago, and
Since the properties ordered to be distributed by the court a quo
were found, both by the trial court and the Court of Appeals, to Carpio, JJ., concur.
have been acquired during the union of the parties, the same would
be covered by the co­ownership. No fruits of a separate property of
one of the parties appear to have been included or involved in said
distribution.   The   liquidation,   partition   and   distribution   of   the
properties owned in common by the parties herein as ordered by
the court a quo should, therefore, be sustained, but on the basis of
co­ownership   and   not   of   the   regime   of   conjugal   partnership   of
gains.
As to the issue on custody of the parties over their only child, Javy
Singh   Buenaventura,   it   is   now   moot   since   he   is   about   to   turn
twenty­five   years   of   age   on  May  27,   2005 26 and   has,   therefore,
attained the age of majority.
With   regard   to   the   issues   on   support   raised   in   the   Petition
for Certiorari, these would also now be moot, owing to the fact
115
116
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 146294             July 31, 2006
JOHN ABING, petitioner,
vs.
JULIET WAEYAN, respondent.
D E C I S I O N
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 2­storey residential house from one
Benjamin Macua which was erected on a lot owned by a certain
Alejandro Diño on Aurora Street, Mankayan, Benguet. Consequent
to   the   purchase,   the   tax   declaration   of   the   2­storey   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   2­storey   residential   house   underwent
renovation.   To   it   was   annexed   a   new   structure   which   housed
a sari­sari store. This new structure and the sari­sari store thereat
are the properties involved in this case.
In 1994,  Juliet  returned  from  Korea   and  continued  to  live  with
John. She managed the sari­sari 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.
117
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 sari­sari 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. 96­001­
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 co­ownership.
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 co­owner 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 sari­sari 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
co­owner   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
118
or documentary, to support petitioner's self­serving allegation that
the annex structure which housed the sari­sari 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 co­ownership.
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 common­law 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 co­ownership. And under
this   regime,   they   owned   their   properties   in   common   "in   equal
shares."   Being   herself   a   co­owner   of   the   structure   in   question,
Juliet, as correctly ruled by the CA, may not be ejected therefrom.
True it is that under Article 487 8 of the Civil Code, a co­owner
may bring an action for ejectment against a co­owner 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,   Sandoval­Gutierrez,   Corona,   Azcuna,

J.J., concur.

119
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 163744             February 29, 2008
METROPOLITAN BANK AND TRUST CO., petitioner,
vs.
NICHOLSON PASCUAL a.k.a. NELSON  amended, before the Office of the Notary Public of Makati City.
PASCUAL, respondent.
D E C I S I O N
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 250­square meter lot with
a three­door  apartment standing thereon located in Makati City.
Subsequently, Transfer Certificate of Title (TCT) No. S­101473/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. Q­95­23533. 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 ex­spouses’ 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   marriage­nullifying   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   ex­spouses
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
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.   00­789   and   eventually   raffled   to
Branch 65 of the court. In it, Nicholson alleged that the property,
which   is   still   conjugal   property,   was   mortgaged   without   his
consent.
Metrobank,   in   its Answer   with   Counterclaim   and   Cross­
Claim,4 alleged that the disputed lot, being registered in Florencia’s
name, was paraphernal. Metrobank also asserted having approved
the mortgage in good faith.
Florencia  did not file an answer within the reglementary period
and, hence, was subsequently declared in default.
The RTC Declared the REM Invalid
After   trial   on   the   merits,   the   RTC   rendered,   on   September   24,
2001, judgment finding for Nicholson. The fallo reads:
PREMISES   CONSIDERED,   the   Court   renders   judgment
declaring the real estate mortgage on the property covered
by [TCT] No. 156283 of the Registry of Deeds for the City
of Makati as well as all proceedings thereon null and void.
The   Court   further   orders   defendants   [Metrobank   and
Florencia] jointly and severally to pay plaintiff [Nicholson]:
120
1. PhP100,000.00 by way of moral damages;
2. PhP75,000.00 by way of attorney’s fees; and
3. The costs.
SO ORDERED.5
Even as it declared the invalidity of the mortgage, the trial court
found the said lot to be conjugal, the same having been acquired
during the existence of the marriage of Nicholson and Florencia. In
so ruling, the RTC invoked Art. 116 of the Family Code, providing
that   "all   property   acquired   during   the   marriage,   whether   the
acquisition appears to have been made, contracted or registered in
the name of one or both spouses, is presumed to be conjugal unless
the   contrary   is   proved."   To   the   trial   court,   Metrobank   had   not
overcome the presumptive conjugal nature of the lot. And being
conjugal, the RTC concluded that the disputed property may not be
validly encumbered by Florencia without Nicholson’s consent.
The RTC also found the deed of  waiver Florencia  submitted to
Metrobank   to   be   fatally   defective.   For   let   alone   the   fact   that
Nicholson denied executing the same and that the signature of the
notarizing   officer   was   a   forgery,   the   waiver   document   was
allegedly executed on April 9, 1995 or a little over three months
before the issuance of the RTC decision declaring the nullity of
marriage between Nicholson and Florencia.
The trial court also declared Metrobank as a mortgagee in bad faith
on account of negligence, stating the observation that certain data
appeared in the supporting contract documents, which, if properly
scrutinized, would have put the bank on guard against approving
the mortgage. Among the data referred to was the date of execution
of the deed of waiver.
The   RTC   dismissed   Metrobank’s   counterclaim   and   cross­claim
against the ex­spouses.
Metrobank’s motion for reconsideration was denied. Undeterred,
Metrobank   appealed   to   the   Court   of   Appeals   (CA),   the   appeal
docketed as CA­G.R. CV No. 74874.
The CA Affirmed with Modification the RTC’s Decision
On January 28, 2004, the CA rendered a Decision affirmatory of
that of the RTC, except for the award therein of moral damages
and attorney’s fees which the CA ordered deleted. The dispositive
portion of the CA’s Decision reads:
WHEREFORE, premises considered, the appealed decision
is   hereby   AFFIRMED   WITH   MODIFICATION   with
respect to the award of moral damages and attorney’s fees
which is hereby DELETED.
SO ORDERED.6
Like the RTC earlier held, the CA ruled that Metrobank failed to
overthrow the presumption established in Art. 116 of the Family
Code.   And   also   decreed   as   going   against   Metrobank   was
Florencia’s   failure   to   comply   with   the   prescriptions   of   the
succeeding Art. 124 of the Code on the  disposition of  conjugal
partnership property. Art. 124 states:
Art. 124. The administration and enjoyment of the conjugal
partnership property shall belong to both spouses jointly. In
case of disagreement, the husband’s decision shall prevail,
subject   to   recourse   to   the   court   by   the   wife   for   proper
remedy x x x.
In the event that one spouse is incapacitated or otherwise
unable to participate in the administration of the conjugal
properties,   the   other   spouse   may   assume   sole   powers   of
administration. These powers do not include disposition or
encumbrance   without   authority   of   the   court   or   written
consent of the other spouse. In the absence of such authority
or consent, the  disposition or encumbrance  shall be void.
However, the transaction shall be construed as a continuing
offer   on   the   part   of   the   consenting   spouse   and   the   third
person, and may be perfected as a binding contract upon the
acceptance by the other spouse or authorization by the court
before the offer is withdrawn by either or both offerors.
As to the deletion of the award of moral damages and attorney’s
fees, the CA, in gist, held that Metrobank did not enter into the
mortgage contract out of ill­will or for some fraudulent purpose,
moral   obliquity,   or   like   dishonest   considerations   as   to   justify
damages.
Metrobank moved but was denied reconsideration by the CA.
Thus, Metrobank filed this Petition for Review on Certiorari under
Rule 45, raising the following issues for consideration:
a.   Whether   or   not   the   [CA]   erred   in   declaring   subject
property as conjugal by applying Article 116 of the Family
Code.
b. Whether or  not the  [CA] erred in not holding that the
declaration of  nullity of  marriage  between the respondent
Nicholson   Pascual   and   Florencia   Nevalga ipso
facto dissolved the regime of community of property of the
spouses.
c. Whether or not the [CA] erred in ruling that the petitioner
is an innocent purchaser for value.7
Our Ruling
A modification of the CA’s Decision is in order.
The Disputed Property is Conjugal
It is Metrobank’s threshold posture that Art. 160 of the Civil Code
providing   that   "[a]ll   property   of   the   marriage   is   presumed   to
belong  to the   conjugal  partnership,  unless it  be  prove[n]  that  it
pertains exclusively to the  husband or to the wife," applies. To
Metrobank, Art. 116 of the Family Code could not be of governing
application   inasmuch   as   Nicholson   and   Florencia   contracted
marriage before the effectivity of the Family Code on August 3,
1988.  Citing Manongsong  v. Estimo,8 Metrobank  asserts that  the
presumption  of   conjugal  ownership  under  Art.  160 of  the  Civil
Code applies when there is proof that the property was acquired
during   the   marriage.   Metrobank   adds,   however,   that   for   the
presumption of conjugal ownership to operate, evidence must be
adduced to prove that not only was the property acquired during
the marriage but that conjugal funds were used for the acquisition,
a burden Nicholson allegedly failed to discharge.
To   bolster   its   thesis   on   the   paraphernal   nature   of   the   disputed
property,   Metrobank   cites Francisco   v.   Court   of
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.
121
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   Metrobank’s
arguments on the matter of presumption are misleading as only one
postulate   needs   to   be   shown   for   the   presumption   in   favor   of
conjugal ownership to arise, that is, the fact of acquisition during
marriage.   Nicholson   dismisses,   as
inapplicable, Francisco and Jocson, noting   that   they   are   relevant
only when there is no indication as to the exact date of acquisition
of the property alleged to be conjugal.
As   a   final   point,   Nicholson   invites   attention   to   the   fact   that
Metrobank   had   virtually   recognized   the   conjugal   nature   of   the
property in at least three instances. The first was when the bank
lumped   him   with   Florencia   in   Civil   Case   No.   00­789   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   co­mortgagor.   And   third,   in   its   demand­letter 13 to
vacate   the   disputed   lot,   Metrobank   addressed   Nicholson   and
Florencia as "spouses," albeit the finality of the decree of nullity of
marriage between them had long set in.
We find for Nicholson.
First, while Metrobank is correct in saying that Art. 160 of the
Civil Code, not Art. 116 of the Family Code, is the applicable legal
provision since the property was acquired prior to the enactment of
the   Family   Code,   it   errs   in   its   theory   that,   before   conjugal
ownership could be legally presumed, there must be a showing that
the   property   was   acquired   during   marriage using   conjugal
funds. Contrary   to   Metrobank’s   submission,   the   Court   did   not,
in Manongsong,14 add the matter of the use of conjugal funds as an
essential requirement for the presumption of conjugal ownership to
arise.   Nicholson   is   correct   in   pointing   out   that   only   proof   of
acquisition during the marriage is needed to raise the presumption
that   the   property   is   conjugal.   Indeed,   if   proof   on   the   use   of
conjugal   is   still   required   as   a   necessary   condition   before   the
presumption can arise, then the legal presumption set forth in the
law would veritably be a superfluity. As we stressed in Castro v.
Miat:
Petitioners also overlook Article 160 of the New Civil
Code. It provides that "all property of the marriage is
presumed   to   be   conjugal   partnership,   unless   it   be
 prove[n] that it pertains exclusively to the husband or to
the wife." This article does not require proof that the
property   was   acquired   with   funds   of   the
partnership. The   presumption  applies even  when  the
manner  in which the  property was acquired does not
appear.15 (Emphasis supplied.)
Second, Francisco and Jocson do   not   reinforce   Metrobank’s
theory. Metrobank would thrust on the  Court, invoking the  two
cases, the argument that the registration of the property in the name
of   "Florencia   Nevalga,   married   to   Nelson   Pascual"   operates   to
describe only the marital status of the title holder, but not as proof
that   the   property   was   acquired   during   the   existence   of   the
marriage.
Metrobank   is   wrong.   As   Nicholson   aptly   points   out,   if   proof
obtains on the acquisition of the property during the existence of
the marriage, then the presumption of conjugal ownership applies.
The   correct   lesson   of Francisco and Jocson is   that   proof   of
acquisition   during   the   marital   coverture   is   a   condition sine   qua
non for   the   operation   of   the   presumption   in   favor   of   conjugal
ownership. When there is no showing as to when the property was
acquired by the spouse, the fact that a title is in the name of the
spouse is an indication that the property belongs exclusively to said
spouse.16
The Court, to be sure, has taken stock of Nicholson’s arguments
regarding Metrobank having implicitly acknowledged, thus being
in   virtual   estoppel   to   question,   the   conjugal   ownership   of   the
disputed lot, the bank having named the former in the foreclosure
proceedings   below  as  either  the   spouse  of  Florencia  or   her  co­
mortgagor. It is felt, however, that there is no compelling reason to
delve into the matter of estoppel, the same having been raised only
for the first time in this petition. Besides, however Nicholson was
designated below does not really change, one way or another, the
classification of the lot in question.
Termination   of   Conjugal   Property   Regime   does   not ipso
facto End the Nature of Conjugal Ownership
Metrobank next maintains that, contrary to the CA’s holding, Art.
129 of the Family Code is inapplicable. Art. 129 in part reads:
Art. 129. Upon the dissolution of the conjugal partnership
regime, the following procedure shall apply:
x x x x
(7) The net remainder of the conjugal partnership properties
shall constitute the profits, which shall be divided equally
between husband and wife, unless a different proportion or
division   was   agreed   upon   in   the   marriage   settlements   or
unless  there  has been  a  voluntary  waiver  or  forfeiture   of
such share as provided in this Code.
Apropos the aforequoted provision, Metrobank asserts that
the waiver executed by Nicholson, effected as it were before
the dissolution of the conjugal property regime, vested on
Florencia   full   ownership   of   all   the   properties   acquired
during the marriage.
Nicholson counters that the mere declaration of nullity of marriage,
without   more,   does   not   automatically   result   in   a   regime   of
complete separation when it is shown that there was no liquidation
of the conjugal assets.
We again find for Nicholson.
While the declared nullity of marriage of Nicholson and Florencia
severed their marital bond and dissolved the conjugal partnership,
the   character   of   the   properties   acquired   before   such   declaration
continues   to   subsist   as   conjugal   properties   until   and   after   the
liquidation and partition of the partnership. This conclusion holds
true whether we apply Art. 129 of the Family Code on liquidation
of   the   conjugal   partnership’s   assets   and   liabilities   which   is
generally prospective in application, or Section 7, Chapter 4, Title
IV, Book I (Arts. 179 to 185) of the Civil Code on the subject,
Conjugal Partnership of Gains. For, the relevant provisions of both
Codes first require the liquidation of the conjugal properties before
a regime of separation of property reigns.
In Dael v. Intermediate Appellate Court, we ruled that pending its
liquidation  following  its  dissolution,  the  conjugal  partnership  of
gains is converted into an implied ordinary co­ownership among
the surviving spouse and the other heirs of the deceased.17
In this pre­liquidation scenario, Art. 493 of the Civil Code shall
govern   the   property   relationship   between   the   former   spouses,
where:
122
Each co­owner 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 co­owners, shall be limited
to   the   portion   which   may   be   allotted   to   him   in   the
division   upon   the   termination   of   the   co­ownership.
(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 one­half (1/2)
undivided   interest   in   the   disputed   property   even   without   the
consent   of   Nicholson.   However,   the   rights   of   Metrobank,   as
mortgagee,   are   limited   only   to   the   1/2   undivided   portion   that
Florencia owned. Accordingly, the mortgage contract insofar as it
covered the remaining 1/2 undivided portion of the lot is null and
void,   Nicholson   not   having   consented   to   the   mortgage   of   his
undivided half.
The conclusion would have, however, been different if Nicholson
indeed duly waived his share in the conjugal partnership. But, as
found   by   the   courts a   quo, the   April   9,   1995   deed   of   waiver
allegedly   executed   by   Nicholson   three   months   prior   to   the
dissolution of the marriage and the conjugal partnership of gains
on July 31, 1995 bore his forged signature, not to mention that of
the notarizing officer. A spurious deed of waiver does not transfer
any right at all, albeit it may become the root of a valid title in the
hands of an innocent buyer for value.
Upon the foregoing perspective, Metrobank’s right, as mortgagee
and as the successful bidder at the auction of the lot, is confined
only to the 1/2 undivided portion thereof heretofore pertaining in
ownership   to   Florencia.   The   other   undivided   half   belongs   to
Nicholson.   As   owner pro   indiviso of   a   portion   of   the   lot   in
question, Metrobank may ask for the partition of the lot and its
property   rights   "shall   be   limited   to   the   portion   which   may   be
allotted to [the bank] in the division upon the termination of the co­
ownership."18 This disposition is in line with the well­established
principle that the binding force of a contract must be recognized as
far as it is legally possible to do so––quando res non valet ut ago, SO ORDERED.
valeat quantum valere potest.19

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

But as found by the CA, however, Metrobank’s failure to comply
with   the   due   diligence   requirement   was   not   the   result   of   a
dishonest   purpose,   some   moral   obliquity   or   breach   of   a   known
duty for some interest or ill­will 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.   00­789,   is AFFIRMED with
the MODIFICATION that the REM over the lot covered by TCT
No. 156283 of  the  Registry  of  Deeds of  Makati City is hereby
declared valid only insofar as the pro indiviso share of Florencia
thereon is concerned.

As modified, the Decision of the RTC shall read:

PREMISES   CONSIDERED, the   real   estate   mortgage   on   the

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

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

No pronouncement as to costs.
123
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 178044               January 19, 2011
ALAIN M. DIÑO , Petitioner,
vs.
MA. CARIDAD L. DIÑO, Respondent.
D E C I S I O N
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 Piñas City, Branch 254 (trial court)  in Civil
Case No. LP­01­0149.
The Antecedent Facts
Alain M. Diño (petitioner) and Ma. Caridad L. Diño (respondent)
were   childhood   friends   and   sweethearts.   They   started   living
together in 1984 until they decided to separate in 1994. In 1996,
petitioner and respondent decided to live together again. On 14
January 1998, they were married before Mayor Vergel Aguilar of
Las Piñas City.
On   30   May   2001,   petitioner   filed   an   action   for   Declaration   of
Nullity   of   Marriage   against   respondent,   citing   psychological
incapacity under Article 36 of the Family Code. Petitioner alleged
that respondent failed in her marital obligation to give love and
support to him, and had abandoned her responsibility to the family,
choosing instead to go on shopping sprees and gallivanting with
her   friends   that   depleted   the   family   assets.   Petitioner   further
alleged   that   respondent   was   not   faithful,   and   would   at   times
become violent and hurt him.
Extrajudicial  service  of  summons was effected upon respondent 1.   Declaring   the   marriage   between   plaintiff   ALAIN   M.
who, at the time of the filing of the petition, was already living in DIÑO and defendant MA. CARIDAD L. DIÑO on January
the   United   States  of   America.  Despite   receipt  of   the   summons, 14, 1998, and all its effects under the law, as NULL and
respondent   did   not   file   an   answer   to   the   petition   within   the VOID from the beginning; and
reglementary period. Petitioner later learned that respondent filed a
petition   for   divorce/dissolution   of   her   marriage   with   petitioner, 2. Dissolving the regime of absolute community of property.
which was granted by the Superior Court of California on 25 May
2001. Petitioner also learned that on 5 October 2001, respondent
A  DECREE  OF ABSOLUTE  NULLITY OF MARRIAGE shall
married a certain Manuel V. Alcantara.
only be issued upon compliance with Article[s] 50 and 51 of the
Family Code.
On 30 April 2002, the Office of the Las Piñas prosecutor found
that there were no indicative facts of collusion between the parties
Let copies of this Decision be furnished the parties, the Office of
and the case was set for trial on the merits.
the Solicitor General, Office of the City Prosecutor, Las Piñas City
and the Office of the Local Civil Registrar of Las Piñas City, for
Dr. Nedy L. Tayag (Dr. Tayag), a clinical psychologist, submitted their information and guidance.
a psychological report establishing that respondent was suffering
from Narcissistic Personality Disorder which was deeply ingrained
SO ORDERED.4
in her system since her early formative years. Dr. Tayag found that
respondent’s disorder was long­lasting and by nature, incurable.
Petitioner filed a motion for partial reconsideration questioning the
dissolution of the absolute community of property and the ruling
In its 18 October 2006 Decision, the trial court granted the petition
that the decree of annulment shall only be issued upon compliance
on the ground that respondent was psychologically incapacited to
with Articles 50 and 51 of the Family Code.
comply with  the  essential  marital obligations  at the  time  of  the
celebration of the marriage.
In its 12 March 2007 Order, the trial court partially granted the
motion and modified its 18 October 2006 Decision as follows:
The Decision of the Trial Court
WHEREFORE,   in   view   of   the   foregoing,   judgment   is   hereby
The   trial   court   ruled   that   based   on   the   evidence   presented,
rendered:
petitioner   was   able   to   establish   respondent’s   psychological
incapacity.   The   trial   court   ruled   that   even   without   Dr.   Tayag’s
1) Declaring the marriage between plaintiff ALAIN M.
psychological report, the allegations in the complaint, substantiated
DIÑO   and   defendant   MA.   CARIDAD   L.   DIÑO   on
in   the   witness   stand,   clearly   made   out   a   case   of   psychological
January 14, 1998, and all its effects under the law, as
incapacity   against   respondent.   The   trial   court   found   that
respondent committed acts which hurt and embarrassed petitioner NULL and VOID from the beginning; and
and the rest of the family, and that respondent failed to observe
mutual love, respect and fidelity required of her under Article 68 of 2)   Dissolving   the   regime   of   absolute   community   of
the   Family   Code.   The   trial   court   also   ruled   that   respondent property.
abandoned   petitioner   when   she   obtained   a   divorce   abroad   and
married another man. A DECREE OF ABSOLUTE NULLITY OF MARRIAGE shall be
issued after  liquidation, partition and distribution of the  parties’
The dispositive portion of the trial court’s decision reads: properties under Article 147 of the Family Code.
WHEREFORE,   in   view   of   the   foregoing,   judgment   is   hereby Let copies of this Order be furnished the parties, the Office of the
rendered: Solicitor General, the Office of the City Prosecutor of Las Piñas
124
City   and   the   Local   Civil   Registrar   of   Las   Piñas   City,   for   their
information and guidance.5
Hence, the petition before this Court.
The Issue
The sole issue in this case is whether the trial court erred when it
ordered that a decree of absolute nullity of marriage shall only be
issued after liquidation, partition, and distribution of the parties’
properties under Article 147 of the Family Code.
The Ruling of this Court
The petition has merit.
Petitioner assails the ruling of the trial court ordering that a decree
of   absolute   nullity   of   marriage   shall   only   be   issued   after
liquidation,   partition,   and   distribution   of   the   parties’   properties
under   Article   147   of   the   Family   Code.   Petitioner   argues   that
Section 19(1) of the Rule on Declaration of Absolute Nullity of
Null Marriages and Annulment of Voidable 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 co­ownership.
In the absence of proof to the contrary, properties acquired while
they lived together shall be presumed to have been obtained by
their joint efforts, work or industry, and shall be owned by them in
equal  shares. For  purposes  of  this  Article,  a  party  who  did  not
participate in the acquisition by the other  party of  any property
shall   be   deemed   to   have   contributed   jointly   in   the   acquisition
thereof   if   the   former’s   efforts   consisted   in   the   care   and
maintenance of the family and of the household.
Neither party can encumber or dispose by acts inter vivos of his or
her share in the property acquired during cohabitation and owned
in   common,   without   the   consent   of   the   other,   until   after   the
termination of their cohabitation.
When only one of the parties to a void marriage is in good faith,
the share of the party in bad faith in the co­ownership 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
125
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
Code.16 The rules on co­ownership apply and the properties of the
spouses should be liquidated in accordance with the Civil Code
provisions on co­ownership. Under Article 496 of the Civil Code,
"[p]artition may be made by agreement between the parties or by
judicial proceedings. x x x."  It is not necessary to liquidate  the
properties of the spouses in the same proceeding for declaration of
nullity of marriage.
WHEREFORE, we AFFIRM the Decision of the trial court with
the MODIFICATION that  the   decree   of   absolute   nullity   of   the
marriage shall be issued upon finality of the trial court’s decision
without waiting for the liquidation, partition, and distribution of
the parties’ properties under Article 147 of the Family Code.
SO ORDERED.
ANTONIO T. CARPIO
Associate Justice

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 co­ownership.

In this case, petitioner’s 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

126
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 202370               September 23, 2013
JUAN SEVILLA SALAS, JR., Petitioner,
vs.
EDEN VILLENA AGUILA, Respondent.
D E C I S I O N
CARPIO, J.:
The Case
This petition for review on certiorari 1 assails the 16 March 2012
Decision2 and   the   28   June   2012   Resolution 3 of   the   Court   of
Appeals (CA) in CA­G.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   Decision 7 declaring   the
nullity of the marriage of Salas and Aguila (RTC Decision). The
RTC   Decision   further   provides   for   the   "dissolution   of   their The Ruling of the Regional Trial Court
conjugal partnership of gains, if any."8
In its 26 September 2008 Order, the RTC ruled in favor of Aguila.
On   10   September   2007,   Aguila   filed   a   Manifestation   and The dispositive portion of the Order reads:
Motion9 stating   that   she   discovered:   (a)   two   200­square­meter
parcels   of   land   with   improvements   located   in   San   Bartolome, WHEREFORE,   foregoing   premises   being   considered,   the
Quezon City, covered by Transfer Certificate of Title (TCT) No. petitioner   and   the   respondent   are   hereby   directed   to   partition
N­259299­A and TCT No. N­255497; and (b) a 108­square­meter between   themselves   by   proper   instruments   of   conveyance,   the
parcel   of   land   with   improvement   located   in   Tondo,   Manila, following   properties,   without   prejudice   to   the   legitime   of   their
covered   by   TCT   No.   243373   (collectively,   "Discovered legitimate child, Joan Jisselle Aguila Salas:
Properties"). The registered owner of the Discovered Properties is
"Juan S.Salas, married to Rubina C. Salas." The manifestation was
(1) A parcel of land registered in the name of Juan S.
set for hearing on 21 September 2007. However, Salas’ notice of
Salas   married   to   Rubina   C.   Salas   located   in   San
hearing was returned unserved with the remark, "RTS Refused To
Bartolome, Quezon City and covered by TCT No. N­
Receive."
259299­A   marked   as   Exhibit   "A"   and   its
improvements;
On 19 September 2007, Salas filed a Manifestation with Entry of
Appearance10 requesting   for   an   Entry   of   Judgment   of   the   RTC
(2)   A   parcel   of   land   registered   in   the   name   of   Juan
Decision since no motion for reconsideration or appeal was filed
S.Salas   married   to   Rubina   C.   Salas   located   in   San
and no conjugal property was involved.
Bartolome, Quezon City and covered by TCT No. N­
255497 marked as Exhibit "B" and its improvements;
On   21   September   2007,   the   hearing   for   Aguila’s   manifestation
ensued, with Aguila, her counsel and the state prosecutor present.
(3)   A   parcel   of   land   registered   in   the   name   of   Juan
During the hearing, Aguila testified that on 17 April 2007 someone
S.Salas   married   to   Rubina   Cortez   Salas   located   in
informed   her   of   the   existence   of   the   Discovered   Properties.
Tondo and covered by TCT No. 243373­Ind. marked as
Thereafter,   she   verified   the   information   and   secured   copies   of
Exhibit "D" and its improvements.
TCTs of the Discovered Properties. When asked to clarify, Aguila
testified   that   Rubina   C.   Salas   (Rubina)   is   Salas’   common­law
wife.11 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
On   8   February   2008,   Salas   filed   an   Opposition   to   the
Deeds of the place in which the property is situated.
Manifestation12 alleging  that  there   is  no conjugal property  to  be
partitioned   based   on   Aguila’s   petition.   According   to   Salas,
Aguila’s  statement  was  a   judicial   admission   and   was  not   made SO ORDERED.13
through palpable mistake. Salas claimed that Aguila waived her
right   to   the   Discovered   Properties.   Salas   likewise   enumerated The   RTC   held   that   pursuant   to   the   Rules,14 even   upon  entry  of
properties   he   allegedly   waived   in   favor   of   Aguila,   to   wit:(1) judgment   granting   the   annulment   of   marriage,   the   court   can
parcels   of   land   with   improvements   located   in   Sugar   Landing proceed   with   the   liquidation,   partition   and   distribution   of   the
Subdivision,   Alangilan,   Batangas   City;   No.   176   Brias   Street, conjugal   partnership   of   gains   if   it   has   not   been   judicially
Nasugbu,   Batangas;   P.   Samaniego   Street,   Silangan,   Nasugbu, adjudicated   upon,   as   in   this   case.   The   RTC   found   that   the
Batangas;   and   Batangas   City,   financed   by   Filinvest;   (2)   cash Discovered   Properties   are   among   the   conjugal   properties   to   be
amounting   to  ₱200,000.00;   and   (3)   motor   vehicles,   specifically partitioned and distributed between Salas and Aguila. However,
Honda   City   and   Toyota   Tamaraw   FX(collectively,   "Waived the RTC held that Salas failed to prove the existence of the Waived
Properties").   Thus,   Salas   contended   that   the   conjugal   properties Properties.
were deemed partitioned.
127
On 11 November 2008, Rubina filed a Complaint­in­Intervention,
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   well­versed   with   legal
documentation, he registered the properties in the name of "Juan S.
Salas, married to Rubina C. Salas."
In its 16 December 2009 Order, the RTC denied the Motion for
Reconsideration filed by Salas. The RTC found that Salas failed to
prove his allegation that Aguila transferred the Waived Properties
to third persons. The RTC emphasized that it cannot go beyond the
TCTs,   which   state   that   Salas   is   the   registered   owner   of   the
Discovered Properties. The RTC further held that Salas and Rubina
were   at   fault   for   failing   to   correct   the   TCTs,   if   they   were   not
married as they claimed.
Hence, Salas filed an appeal with the CA.
The Ruling of the Court of Appeals
On 16 March 2012, the CA affirmed the order of the RTC. 15 The
CA ruled that Aguila’s statement in her petition is not a judicial
admission. The  CA  pointed out that the  petition was filed on 7
October 2003, but Aguila found the Discovered Properties only on
17 April 2007 or before the promulgation of the RTC decision.
Thus, the CA concluded that Aguila was palpably mistaken in her
petition and it would be unfair to punish her over a matter that she
had no knowledge of at the time she made the admission. The CA
also ruled that Salas was not deprived of the opportunity to refute
Aguila’s allegations in her manifestation, even though he was not
present in its hearing. The CA likewise held that Rubina cannot
collaterally attack a certificate of title.
In a Resolution dated 28 June 2012,16 the CA denied the Motion
for 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 court’s
decision ordering the partition of the parcels of land covered
by TCT Nos. N­259299­A and N­255497 in Quezon City
and as well as the property in Manila covered by TCT No.
243373 between petitioner and respondent.
2. The Court of Appeals erred in affirming the trial court’s
decision in not allowing Rubina C. Cortez to intervene in
this 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 co­ownership. 19 Thus, the
settlement   of   the   issue   of   ownership   is   the   first   stage   in   this
action.20
Basic is the rule that the party making an allegation in a civil case
has   the   burden   of   proving   it   by   a   preponderance   of
evidence.21 Salas alleged that contrary to Aguila’s petition stating
that   they   had   no   conjugal   property,   they   actually   acquired   the
Waived   Properties   during   their   marriage.   However,   the   RTC
found, and the CA affirmed, that Salas failed to prove the existence
and acquisition of the Waived Properties during their marriage:
A perusal of the record shows that the documents submitted by
[Salas]   as   the   properties   allegedly   registered   in   the   name   of
[Aguila]   are   merely   photocopies   and   not   certified   true   copies,
hence, this Court cannot admit the same as part of the records of
this case. These are the following:
(1)   TCT   No.   T­65876   –   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. T­105443 in the name of Joan
Jiselle A. Salas, single;
(2) TCT No. T­68066 – 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.
128
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.1âwphi1 Both   the
RTC and the CA agreed that the Discovered Properties registered
in Salas’ name were acquired during his marriage with Aguila. The
TCTs of the Discovered Properties were entered on 2 July 1999
and   29   September   2003,   or   during   the   validity   of   Salas   and
Aguila’s marriage. In Villanueva v. Court of Appeals, 23 we held
that the question of whether the properties were acquired during
the   marriage   is   a   factual   issue.   Factual   findings   of   the   RTC,
particularly if affirmed by the CA, are binding on us, except under
compelling circumstances not present in this case.24
On   Salas’   allegation   that   he   was   not   accorded   due   process   for
failing to attend the hearing of Aguila’s manifestation, we find the
allegation untenable. The essence of due process is opportunity to
be heard. We hold that Salas was given such opportunity when he
filed his opposition to the manifestation, submitted evidence and
filed his appeal.
On   both   Salas   and   Rubina’s   contention   that   Rubina   owns   the
Discovered   Properties,   we   likewise   find   the   contention
unmeritorious.   The   TCTs   state   that   "Juan   S.   Salas,   married   to
Rubina   C.   Salas"   is   the   registered   owner   of   the   Discovered
Properties. A Torrens title is generally a conclusive evidence of the
ownership   of   the   land   referred   to,   because   there   is   a   strong
presumption   that   it   is   valid   and   regularly   issued. 25 The   phrase
"married   to"   is   merely   descriptive   of   the   civil   status   of   the
registered owner.26 Furthermore, Salas did not initially dispute the
ownership of the Discovered Properties in his opposition to the
manifestation.   It   was   only   when   Rubina   intervened   that   Salas
supported   Rubina’s   statement   that   she   owns   the   Discovered
Properties.
Considering   that   Rubina   failed   to   prove   her   title   or   her   legal
interest in the Discovered Properties, she has no right to intervene
in this case. The Rules of Court provide that only "a person who
has a legal interest in the matter in litigation, or in the success of
either of the parties, or an interest against both, or is so situated as
to be adversely affected by a distribution or other disposition of
property in the custody of the court or of an officer thereof may,
with leave of court, be allowed to intervene in the action."27
In Diño v. Diño,28 we held that Article 147 of the Family Code
applies to the union of parties who are legally capacitated and not
barred   by   any   impediment   to   contract   marriage,   but   whose
marriage   is   nonetheless   declared   void   under   Article   36   of   the
Family   Code,   as   in   this   case.   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 co­ownership.
descendants.   In   the   absence   of   descendants,   such   share   shall
belong to the innocent party. In all cases, the forfeiture shall take
place upon termination of the cohabitation. (Emphasis supplied)
Under this property regime, property acquired during the marriage
is   prima   facie   presumed   to   have   been   obtained   through   the
couple’s   joint   efforts   and   governed   by   the   rules   on   co­
ownership.29 In   the   present   case,   Salas   did   not   rebut   this
presumption.   In   a   similar   case   where   the   ground   for   nullity   of
marriage   was   also   psychological   incapacity,   we   held   that   the
properties acquired during the union of the parties, as found by
both   the   RTC   and   the   CA,   would   be   governed   by   co­
ownership.30 Accordingly,   the   partition   of   the   Discovered
Properties as ordered by the RTC and the CA should be sustained,
but on the basis of co­ownership 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 CA­G.R. CV No. 95322.
SO ORDERED.
ANTONIO T. CARPIO
Associate Justice

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

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

When only one of the parties to a void marriage is in good faith,
the share of the party in bad faith in the co­ownership 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

129
130
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 202932               October 23, 2013
EDILBERTO U. VENTURA JR., Petitioner,
vs.
SPOUSES PAULINO and EVANGELINE  operated   small   business   establishments   located   at   903   and   905
ABUDA, Respondents.
D E C I S I O N
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
CA­G.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 (RTC­Manila).
The Facts
The RTC­Manila and the CA found the facts to be as follows:
Socorro   Torres   (Socorro)   and   Esteban   Abletes   (Esteban)   were
married on 9 June 1980. Although Socorro and Esteban never had
common children, both of them had children from prior marriages:
Esteban had a  daughter  named Evangeline   Abuda  (Evangeline),
and Socorro had a son, who was the father of Edilberto U. Ventura,
Jr. (Edilberto), the petitioner in this case.
Evidence shows that Socorro had a prior subsisting marriage  to
Crispin   Roxas   (Crispin)   when   she   married   Esteban.   Socorro
married Crispin on 18 April 1952. This marriage was not annulled,
and Crispin was alive at the time of Socorro’s marriage to Esteban.
Esteban’s   prior   marriage,   on   the   other   hand,   was   dissolved   by
virtue   of   his   wife’s   death   in   1960.   According   to   Edilberto,
sometime in 1968, Esteban purchased a portion of a lot situated at
2492 State  Alley, Bonifacio Street, Vitas, Tondo, Manila (Vitas
property).   The   remaining   portion   was   thereafter   purchased   by
Evangeline  on her  father’s behalf sometime  in 1970.4 The Vitas
property was covered by Transfer Certificate of Title No. 141782,
dated 11 December 1980, issued to "Esteban Abletes, of legal age,
Filipino, married to Socorro Torres."5
Edilberto also claimed that starting 1978, Evangeline and Esteban
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 RTC­Manila. Edilberto alleged that the sale of the properties
was fraudulent because Esteban’s signature on the deeds of sale
was forged. Respondents, on the other hand, argued that because of
Socorro’s prior  marriage  to Crispin, her subsequent marriage to
Esteban was null and void. Thus, neither Socorro nor her heirs can
claim   any   right   or   interest   over   the   properties   purchased   by
Esteban and respondents.9
The Ruling of the RTC­Manila
131
The RTC­Manila dismissed the petition for lack of merit.
The   RTC­Manila   ruled   that   the   marriage   between   Socorro   and
Esteban   was   void   from   the   beginning. 10 Article   83   of   the   Civil
Code,   which   was   the   governing   law   at   the   time   Esteban   and
Socorro were married, provides:
Art.   83.   Any   marriage   subsequently   contracted   by   any   person
during the lifetime of the first spouse of such person shall be illegal
and void from its performance unless:
1. The first marriage was annulled or dissolved; or
2. The first spouse had been absent for seven consecutive
years at the time of the second marriage without the spouse
present having news of the absentee being alive, or if the
absentee,   though   he   has   been   absent   for   less   than   seven
years, is generally considered as dead and believed to be so
by   the   spouse   present   at   the   time   of   contracting   such
subsequent marriage, or if the  absentee is presumed dead
according   to   articles   390   and   391.   The   marriage   so
contracted   shall   be   valid   in   any   of   the   three   cases   until
declared null and void.
During   trial,   Edilberto   offered   the   testimony   of   Socorro’s
daughter­in­law 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 RTC­Manila ruled that the lack of a judicial decree of nullity
does not affect the status of the union. It applied our ruling in Niñal
v. Badayog:12
Jurisprudence under the Civil Code states that no judicial decree is
necessary in order to establish the nullity of a marriage. x x x
Under ordinary circumstances, the effect of a void marriage, so far
as concerns the conferring of legal rights upon the parties, is as
though   no  marriage   had  ever  taken  place.  And  therefore,  being
good for no legal purpose, its invalidity can be maintained in any
proceeding in which [the] fact of marriage may be material, either
direct or collateral, in any civil court between any parties at any
time,   whether   before   or   after   the   death   of   either   or   both   the
husband and the wife, and upon mere proof of the facts rendering
such marriage void, it will be disregarded or treated as non­existent
by the courts.13
According to the RTC­Manila, the Vitas and Delpan properties are
not  conjugal, and are governed by Articles 144 and 485 of  the
Civil Code, to wit:
Art. 144. When a man and a woman live together as husband and
wife, but they are not married, or their marriage is void from the
beginning, the property acquired by either or both of them through
their work or industry or their wages and salaries shall be governed
by the rules on co­ownership.
Art. 485. The share of the co­owners, 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 co­owners in the co­ownership shall
be presumed equal, unless the contrary is proved.
The RTC­Manila 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
one­half   of   the   remaining   property   occupied   by   Ampiano
Caballegan. However, during the survey of the National Housing
Authority, she allowed the whole lot to be registered in her father’s
name. As proof thereof, she presented Exhibits "8" to "11" x x x.
These documents prove that that she has been an occupant of the
said property in Vitas, Tondo even before her father and Socorro
Torres got married in June, 1980.14
Anent the parcels of land and improvements thereon 903 and 905
Del Pan Street, Tondo, Manila, x x x Evangeline professed that in
1978,   before   her   father   met   Socorro   Torres   and   before   the
construction of the BLISS Project thereat, her father [already had]
a bodega of canvas (lona) and a sewing machine to sew the canvas
being sold at 903 Del Pan Street, Tondo Manila. In 1978, she was
also   operating   Vangie’s   Canvas   Store   at   905   Del   Pan   Street,
Tondo, Manila, which was evidenced by Certificate of Registration
of Business Name issued in her favor on 09 November 1998 x x x.
When the  BLISS  project was constructed in 1980, the  property
became known as Units D­9 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  ₱195,259.52 for Unit D­9 as shown by the 37 pieces of
receipts x x x and the aggregate amount of  ₱188,596.09 for Unit
D­10, as evidenced by 36 receipts x x x.15
The RTC­Manila concluded that Socorro did not contribute any
funds for the acquisition of the properties. Hence, she cannot be
considered a co­owner, 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  RTC­Manila. 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 RTC­Manila 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.
132
If one of the parties is validly married to another, his or her share
in   the   co­ownership   shall   accrue   to   the   absolute   community   or
conjugal partnership existing in such valid marriage. If the party
who acted in bad faith is not validly married to another, his or her
share   shall   be   forfeited   in   the   manner   provided   in   the   last
paragraph of the preceding Article.
The foregoing rules on forfeiture shall likewise apply even if both
parties are in bad faith.
The CA applied our ruling in Saguid v. Court of Appeals, 19 and
held that the foregoing provision applies "even if the cohabitation
or the acquisition of the property occurred before the effectivity of
the Family Code."20 The CA found that Edilberto failed to prove
that Socorro contributed to the purchase of the Vitas and Delpan
properties.   Edilberto   was   unable   to   provide   any   documentation
evidencing Socorro’s alleged contribution.21
On   2   April   2012,   Edilberto   filed   a   Motion   for
Reconsideration,22 which was denied by the CA in its Resolution
dated 3 August 2012.23
Hence, this petition.
The Ruling of this Court
We deny the petition.
Edilberto admitted that in unions between a man and a woman who
are   incapacitated   to   marry   each   other,   the   ownership   over   the
properties acquired during the subsistence of that relationship shall
be based on the actual contribution of the parties. He even quoted
our ruling in Borromeo v. 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 co­ownership 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   co­ownership   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 co­owned 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.1âwphi1 The phrase "married to Socorro Torres"
is merely descriptive of his civil status, and does not show that
Socorro   co­owned   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 WHEREFORE,   the   petition   is   DENIED.   The   Decision   dated   9
disputed properties in her name does not necessarily, conclusively March 2012 of the Court of Appeals in CA­G.R. CV No. 92330 is
and absolutely make her the owner. The rule on indefeasibility of AFFIRMED.
title likewise does not apply to respondent. A certificate of title
implies that the title is quiet, and that it is perfect, absolute and SO ORDERED.
indefeasible.  However,  there   are   well­defined  exceptions   to  this
rule, as when the transferee is not a holder in good faith and did
ANTONIO T. CARPIO
not acquire the subject properties for a valuable consideration.
Associate Justice
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 RTC­Manila 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.1âwphi1 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
133
134
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 195670               December 3, 2012
WILLEM BEUMER, Petitioner,
vs.
AVELINA AMORES, Respondent.
D E C I S I O N
PERLAS­BERNABE, J.:
Before the Court is a Petition for Review on Certiorari under Rule
1 
45   of   the   Rules   of   CoLlli   assailing   the   October   8,   2009
Decision2 and January 24, 2011 Resolution3 of the court of Appeals
(CA) in CA­G.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 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 former’s
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 2055­A 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 2055­I 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 2055­A and
2055­I   by   way   of   inheritance.9 She   submitted   a   joint   affidavit
executed   by   her   and   petitioner   attesting   to   the   fact   that   she
purchased Lot 2142 and the improvements thereon using her own
money.10 Accordingly,   respondent   sought   the   dismissal   of   the
petition for dissolution as well as payment for attorney’s fees and
litigation expenses.11
During trial, petitioner testified that while Lots 1, 2142, 5845 and 4
were registered in the name of respondent, these properties were
acquired with the money he received from the Dutch government
as his disability 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
135
Dumaguete City was contrary to Article 89 of the Family Code,
hence, invalid.13
For her part, respondent maintained that the money used for the
purchase of the lots came exclusively from her personal funds, in
particular, her earnings from selling jewelry as well as products
from Avon, Triumph and Tupperware.14 She further asserted that
after she filed for annulment of their marriage in 1996, petitioner
transferred   to   their   second   house   and   brought   along   with   him
certain personal properties, consisting of drills, a welding machine,
grinders, clamps, etc. She alleged that these tools and equipment
have a total cost of P500,000.00.15
The RTC Ruling
On February 28, 2007, the RTC of Negros Oriental, Branch 34
rendered its Decision, dissolving the parties’ conjugal partnership,
awarding all the parcels of land to respondent as her paraphernal
properties; the tools and equipment in favor of petitioner as his
exclusive properties; the two (2) houses standing on Lots 1 and
2142 as co­owned 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 co­owned 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 attorney’s fees considering the well
settled doctrine that there should be no premium on the right to
litigate. The prayer for moral damages are likewise denied for lack
of merit.
No pronouncement as to costs.
Consequently, petitioner filed the instant Petition for Review on
Certiorari assailing the CA Decision due to the following error:
UNDER THE FACTS ESTABLISHED, THE COURT ERRED IN
NOT   SUSTAINING   THE   PETITIONER’S   ATTEMPT   AT
SUBSEQUENTLY ASSERTING OR CLAIMING A RIGHT OF
HALF OR WHOLE OF THE PURCHASE PRICE USED IN THE
PURCHASE OF THE REAL PROPERTIES SUBJECT OF THIS
CASE.22 (Emphasis supplied)
The Ruling of the Court
has   been   inequitable,   unfair   and   dishonest,   or   fraudulent,   or
deceitful.27
In this case, petitioner’s statements regarding the real source of the
funds   used   to   purchase   the   subject   parcels   of   land   dilute   the
veracity   of   his   claims:   While   admitting   to   have   previously
executed a joint  affidavit  that respondent’s personal  funds were
used   to   purchase   Lot   1,28 he   likewise   claimed   that   his   personal
disability funds were used to acquire the same. Evidently, these
inconsistencies   show   his   untruthfulness.   Thus,   as   petitioner   has
come before the Court with unclean hands, he is now precluded
from seeking any equitable refuge.

SO ORDERED.16
It ruled that, regardless of the source of funds for the acquisition of
Lots 1, 2142, 5845 and 4, petitioner could not have acquired any
right whatsoever over these properties as petitioner still attempted
to   acquire   them   notwithstanding   his   knowledge   of   the
constitutional   prohibition   against   foreign   ownership   of   private
lands.17 This was made evident by the sworn statements petitioner
executed purporting to show that the subject parcels of land were
purchased   from   the   exclusive   funds   of   his   wife,   the   herein
respondent.18 Petitioner’s plea for reimbursement for the amount he
had paid to purchase the foregoing properties on the basis of equity
was likewise denied for not having come to court with clean hands.
The CA Ruling
Petitioner elevated the matter to the CA, contesting only the RTC’s
award of  Lots  1,  2142, 5845  and  4 in  favor  of  respondent.  He
insisted that the money used to purchase the foregoing properties
came from his own capital funds and that they were registered in
the  name  of   his  former  wife  only  because   of  the   constitutional
prohibition   against   foreign   ownership.   Thus,   he   prayed   for
reimbursement of one­half (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 ex­wife.19
On October 8, 2009, the CA promulgated a Decision 20 affirming in
toto the judgment rendered by the RTC of Negros Oriental, Branch
34. The CA stressed the fact that petitioner was "well­aware of the
constitutional   prohibition   for   aliens   to   acquire   lands   in   the
Philippines."21 Hence, he cannot invoke equity to support his claim
for reimbursement.
The petition lacks merit.
In any event,  the  Court  cannot, even on the  grounds of  equity,
grant reimbursement to petitioner given that he acquired no right
The   issue   to   be   resolved   is   not   of   first   impression.   In   In   Re:
whatsoever   over   the   subject   properties   by   virtue   of   its
Petition For Separation of Property­Elena Buenaventura Muller v.
unconstitutional  purchase.  It  is  well­established  that  equity  as  a
Helmut   Muller23 the   Court   had   already   denied   a   claim   for
rule   will   follow   the   law   and   will   not   permit   that   to   be   done
reimbursement of the value of purchased parcels of Philippine land
indirectly   which,   because   of   public   policy,   cannot   be   done
instituted by a foreigner Helmut Muller, against his former Filipina
directly.29 Surely, a contract that violates the Constitution and the
spouse, Elena  Buenaventura   Muller. It  held  that Helmut  Muller
law is null and void, vests no rights, creates no obligations and
cannot  seek reimbursement  on the  ground of  equity  where  it  is
produces no legal effect at all. 30 Corollary thereto, under  Article
clear that he willingly and knowingly bought the property despite
1412   of   the   Civil   Code,31 petitioner   cannot   have   the   subject
the   prohibition   against   foreign   ownership   of   Philippine
properties deeded to him or allow him to recover the money he had
land24 enshrined under Section 7, Article XII of the 1987 Philippine
spent for the purchase thereof. The law will not aid either party to
Constitution which reads:
an illegal contract or agreement; it leaves the parties where it finds
them.32 Indeed,   one   cannot   salvage   any   rights   from   an
Section 7. Save in cases of hereditary succession, no private lands unconstitutional transaction knowingly entered into.
shall   be   transferred   or   conveyed   except   to   individuals,
corporations, or associations qualified to acquire or hold lands of
Neither can the Court grant petitioner’s claim for reimbursement
the public domain.
on the basis of unjust enrichment. 33 As held in Frenzel v. Catito, a
case also involving a foreigner seeking monetary reimbursement
Undeniably, petitioner openly admitted that he "is well aware of for money spent on purchase of Philippine land, the provision on
the above­cited constitutional prohibition"25 and even asseverated unjust enrichment does not apply if the action is proscribed by the
that, because of such prohibition, he and respondent registered the Constitution, to wit:
subject   properties   in   the   latter’s   name. 26 Clearly,   petitioner’s
actuations   showed   his   palpable   intent   to   skirt   the   constitutional
Futile, too, is petitioner's reliance on Article 22 of the New Civil
prohibition. On the  basis of  such admission, the Court finds no
Code which reads:
reason why it should not apply the Muller ruling and accordingly,
deny petitioner’s claim for reimbursement.
Art.   22.   Every   person   who   through   an   act   of   performance   by
another, or any other means, acquires or comes into possession of
As also explained in Muller, the time­honored principle is that he
something at the expense of the latter without just or legal ground,
who seeks equity must do equity, and he who comes into equity
shall return the same to him.1âwphi1
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

136
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 non­citizens 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
co­owned 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 duty­bound 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 CA­G.R. CV No. 01940 are AFFIRMED.

SO ORDERED.

ESTELA M. PERLAS­BERNABE
Associate Justice

137
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 198908               August 3, 2012
VIRGINIA OCAMPO, Petitioner,
vs.
DEOGRACIO OCAMPO, Respondent.
D E C I S I O N
PERALTA, J.:
This is a Petition for Review on Certiorari under Rule 45 of the
Rules of Court seeking the reversal of the Decision  dated August
11, 2010 and Resolution dated October 5, 2011, respectively, of
the   Court   of   Appeals   (CA)   in   CA­G.R.   CV   No.   82318,   which
denied the petitioner's appeal and motion for reconsideration.  husband and wife without the benefit of marriage or under a
The facts of the case, as culled from the records, are as follows:
On September 10, 1990, petitioner Virginia Sy Ocampo (Virginia)
filed a  Petition  for   Declaration  of   Nullity  of  her   Marriage  with
Deogracio   Ocampo   (Deogracio)   before   Regional   Trial   Court   of
Quezon   City,   Branch   87,   on   the   ground   of   psychological
incapacity, docketed as Civil Case No. Q­90­6616.
On January 22, 1993, the trial court rendered a Decision declaring
the marriage between Virginia and Deogracio as null and void, the
dispositive portion of which reads:
WHEREFORE,   the   petition   is   hereby   GRANTED.   The
marriage   between   the   petitioner   and   the   respondent   is
hereby   declared   null   and   void   from   the   beginning   under
Article 36 of the Family Code. The status of their children,
however, shall remain legitimate and their custody is hereby
awarded to the petitioner.
As   to   the   couple's   property   relations,   their   conjugal
partnership   of   gains   shall   necessarily   be   dissolved   and
liquidated   but   since   the   petitioner   has   not   submitted   any
detailed and formal listing or inventory of such property, the
court cannot act now on the liquidation aspect. The parties
are given thirty (30) days to submit an inventory of their
conjugal partnership for the purpose of liquidation.
IT IS SO ORDERED.
The decision became final, since no party appealed the judgment
annulling the marriage.
On March 31, 1999, the trial court directed the parties to submit a
project   of   partition   of   their   inventoried   properties,   and   if   they
failed to do so, a hearing will be held on the factual issues with
regard to said properties. Having failed to agree on a project of
partition   of   their   conjugal   properties,   hearing   ensued   where   the
parties adduced evidence in support of their respective stand. 
On January 13, 2004, the trial court rendered the assailed Order
stating that the properties declared by the parties belong to each
one of them on a 50­50 sharing.  Family Code applies to union of parties who are legally capacitated
On February 2, 2004, Virginia filed a Notice of Appeal before the
trial court.
On February 13, 2004, Deogracio filed a Motion to Deny and/or
Dismiss   the   Notice   of   Appeal   and   for   immediate   execution
pursuant to Section 20 of A.M. No. 02­1­10. 
On February 20, 2004, the trial court denied the aforesaid motion
to deny and/or dismiss the notice of appeal for lack of merit.  them in equal shares and the property acquired by both of
On March 4, 2004, Deogracio filed a Motion for Reconsideration.
On March 22, 2004, the trial court denied anew the motion for
reconsideration. 
In   the   disputed   Decision   dated   August   11,   2010,   the   Court   of
Appeals   denied   Virginia's   appeal.   Virginia   moved   for
reconsideration, but was denied in a Resolution dated October 5,
2011.   Thus,   the   instant   petition   for   review   substantially
questioning whether respondent should be deprived of his share in
the   conjugal   partnership   of   gains   by   reason   of   bad   faith   and
psychological perversity.  care and maintenance of the family and of the household.
The petition lacks merit.  Neither party can encumber or dispose by acts inter vivos of
While Virginia and Deogracio tied the marital knot on January 16,
1978,   it   is   still   the   Family   Code   provisions   on   conjugal
partnerships,   however,   which   will   govern   the   property   relations
between Deogracio and Virginia even if they were married before
the effectivity of the Family Code.  faith, the share of the party in bad faith in the co­ownership
Article 105 of the Family Code explicitly mandates that the Family
Code shall apply to conjugal partnerships established before the
Family Code without prejudice to vested rights already acquired
under the Civil Code or other laws. Thus, under the Family Code,
if the properties are acquired during the marriage, the presumption
is that they are conjugal. Hence, the burden of proof is on the party
claiming that they are not conjugal. This is counter­balanced by the
138
requirement that the properties must first be proven to have been
acquired during the marriage before they are presumed conjugal.
The applicable law, however, in so far as the liquidation of the
conjugal  partnership   assets  and  liability   is  concerned,  is  Article
129 of the Family Code in relation to Article 147 of the Family
Code.
The Court held that in a void marriage, as in those declared void
under Article 36 of the Family Code, the property relations of the
parties   during   the   period   of   cohabitation   is   governed   either   by
Article 147 or Article 148 of the Family Code. Article 147 of the
and not barred by any impediment to contract marriage, but whose
marriage is nonetheless void, as in this case. Article 147 of the
Family Code provides:
Article 147. When a man and a woman who are capacitated
to   marry   each   other,   live   exclusively   with   each   other   as
void marriage, their wages and salaries shall be owned by
them through their work or industry shall be governed by
the rules on co­ownership.
In   the   absence   of   proof   to   the   contrary,   properties
acquired while  they lived together shall be presumed to
have been obtained by their joint efforts, work or industry,
and shall be owned by them in equal shares.
For   purposes   of   this   Article,   a   party   who   did   not
participate   in   the   acquisition   by   the   other   party   of   any
property shall be deemed to have contributed jointly in the
acquisition thereof if the former’s efforts consisted in the
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
shall be forfeited in favor of their common children. In case
of default of or waiver by any or all of the common children
or their descendants, each vacant share shall belong to the
respective   surviving   descendants.   In   the   absence   of
descendants, such share shall belong to the innocent party.
In all cases, the forfeiture shall take place upon termination
of the cohabitation.
This particular kind of co­ownership applies when a man and a
woman,   suffering   no   illegal   impediment   to   marry   each   other,
exclusively   live   together   as   husband   and   wife   under   a   void
marriage or without the benefit of marriage. It is clear, therefore,
that for Article 147 to operate, the man and the woman: (1) must
be capacitated to marry each other; (2) live exclusively with each
other   as   husband   and   wife;   and   (3)   their   union   is   without   the
benefit of marriage or their marriage is void, as in the instant case.
The   term   "capacitated"   in   the   first   paragraph   of   the   provision
pertains to the legal capacity of a party to contract marriage. Any
impediment to marry has not been shown to have existed on the
part of either Virginia or Deogracio. They lived exclusively with
each   other   as   husband   and   wife.   However,   their   marriage   was
found   to   be   void   under   Article   36   of   the   Family   Code   on   the
ground of psychological incapacity.
From  the  foregoing,  property  acquired  by both  spouses  through
their work and industry should, therefore, 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   considered   as   having   contributed   to   the   same
jointly if said party's efforts consisted in the care and maintenance
of the family household. Efforts in the care and maintenance of the
family   and   household   are   regarded   as   contributions   to   the
acquisition   of   common   property   by   one   who   has   no   salary   or
income or work or industry.
Citing Valdes v. RTC, the Court held that the court a quo did not
commit a reversible error in utilizing Article 147 of the Family
Code and in ruling that the former spouses own the family home
and   all   their   common   property   in   equal   shares,   as   well   as   in
concluding that, in the liquidation and partition of the property that
they owned in common, the provisions on coownership under the
Civil  Code  should   aptly   prevail.   The  rules  which  are   set   up  to
govern   the   liquidation   of   either   the   absolute   community   or   the
conjugal partnership of gains, the property regimes recognized for
valid and voidable marriages, are irrelevant to the liquidation of
the   co­ownership   that   exists   between   common­law   spouses   or
spouses of void marriages.
Thus, the trial court and the appellate court correctly held that the
parties will share on equal shares considering that Virginia failed
to   prove   that   the   properties   were   acquired   solely   on   her   own
efforts, to wit:
This Court keenly observes that only testimonial evidence the   marriage,   regardless   in   whose   name   the   properties   are
was   presented   by   the   parties   respectively,   to   prove   and registered,  are   presumed   conjugal   unless  proved   otherwise.  The
dispute the claim of the other with regard to the properties presumption is not rebutted by the mere fact that the certificate of
and   assets   acquired   during   the   marriage.   In   the   absence, title of the property or the tax declaration is in the name of one of
therefore,   of   any   documentary   evidence   to   prove   the the   spouses   only.   Article   116   expressly   provides   that   the
contrary, all the properties acquired by the spouses during presumption remains even if the property is "registered in the name
the marriage are presumed conjugal. Further, the testimonial of one or both of the spouses." 18 Thus, the failure of Virginia to
evidence   adduced   by   the   petitioner   aimed   at   establishing rebut   this   presumption,   said   properties   were   obtained   by   the
that   respondent   took   no   part   in   acquiring   said   properties spouses' joint efforts, work or industry, and shall be jointly owned
failed to convince this Court that the latter be given only a by them in equal shares. Accordingly, the partition of the former
meager share thereof.  spouses' properties on the basis of co­ownership, as ordered by the
RTC and the appellate court, should be affirmed, and not on the
While   it  may  be   true   that  management   of  the  businesses
regime of conjugal partnership of gains.
referred to herein may have been actively undertaken by the
petitioner, it cannot be gainsaid that petitioner was able to
WHEREFORE,   the   petition   is  DENIED.   The   Decision   dated
do   so   without   the   invaluable   help   of   respondent.   Even   a
plain   housewife   who  stays   all   the   time   in   the   house   and August 11, 2010 and the Resolution dated October 5, 2011 of the
take[s] care of the household while the husband indulges in Court of Appeals in CA­G.R. CV No. 82318 are  AFFIRMED.
lucrative and gainful activities is entitled to a share in the The case is REMANDED to the trial court for proper disposition.
same proportion the husband is, to the property or properties
acquired by the marriage. In the same breadth, respondent SO ORDERED.
must   be   considered   to   be   entitled   to   the   same   extent.
Petitioner's claim that the seed money in that business was
provided by her mother and that, had it not been for that DIOSDADO M. PERALTA
reason, the properties now subject of controversy could not Associate Justice
have been acquired. That may be true but the Court is not
prone to believe so because of insufficient evidence to prove
such contention but petitioner's self­serving allegations. Of
course, attempts to establish respondent as an irresponsible
and unfaithful husband, as well as family man were made
but the testimonies adduced towards that end, failed to fully
convince the Court that respondent should be punished by
depriving him of his share of the conjugal property because
of his indiscretion.
In the instant case, both the trial and appellate courts agreed that
the subject properties were in fact acquired during the marriage of
Virginia and Deogracio. We give due deference to factual findings
of trial courts, especially when affirmed by the appellate court, as
in this case. A reversal of this finding can only occur if petitioners
show   sufficient  reason   for   us   to   doubt  its   correctness.   There   is
none, in this case.
Likewise, we note that the former spouses both substantially agree
that they acquired the subject properties during the subsistence of
their marriage. 17 The certificates of titles and tax declarations are
not sufficient proof to overcome the presumption under Article 116
of the Family Code. All properties acquired by the spouses during
139
140
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 116668 July 28, 1997
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 CA­G.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 year­long 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 sixty­three­year­old Miguel contracted
his second marriage with nineteen­year­old 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.   U­4265).   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,
141
particularly of  Kristopher Palang, Miguel's illegitimate  son. The
dispositive portion of the decision reads.
WHEREFORE,   premises   considered,   judgment   is
hereby
rendered —
1)   Dismissing   the   complaint,   with   costs   against
plaintiffs;
2)   Confirming   the   ownership   of   defendant   Erlinda
Agapay   of   the   residential   lot   located   at   Poblacion,
Binalonan,   Pangasinan,   as   evidenced   by   TCT   No.
143120,   Lot   290­B   including   the   old   house   standing
therein;
3) Confirming the ownership of one­half (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 1123­A to Erlinda Agapay;
4. Adjudicating to Kristopher Palang as his inheritance
from his deceased father, Miguel Palang, the one­half
(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   quit­claim   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   plaintiffs­appellants   the   owners   of   the
properties in question;
2. Ordering defendant­appellee to vacate and deliver the
properties in question to herein plaintiffs­appellants;
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 party­defendant in
Civil Case No. U­4625 before the trial court and in CA­G.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 co­ownership 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 store10 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 sixty­four 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 co­ownership 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
142
no basis to justify her co­ownership 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 party­defendant 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.

SO ORDERED.

Regalado, Puno and Mendoza, JJ., concur.

Torres, Jr., J., is on leave.

143
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
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 decision 1 of the Court
of Appeals dated May 7, 1998 in CA G.R. CV No. 48443 granting
respondent's   motion   for   reconsideration   of   its   decision   dated
November 7, 1996, and of the resolution dated December 21, 1998
denying petitioner's motion for reconsideration.
The factual and procedural antecedents are as follows:
On  February  24, 1993,  petitioner  Eustaquio  Mallilin,  Jr. filed a
complaint2 for "Partition and/or Payment of Co­Ownership Share,
Accounting and Damages" against respondent Ma. Elvira Castillo.
The complaint, docketed as Civil Case No. 93­656 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 vice­president and treasurer. The business flourished
and petitioner and respondent acquired real and personal properties
which were registered solely in respondent's name. In 1992, due to
irreconcilable   differences,   the   couple   separated.   Petitioner
demanded from respondent his share in the subject properties, but
respondent refused alleging that said properties had been registered
solely in her name.
In her Amended Answer,3 respondent admitted that she engaged in
the customs brokerage business with petitioner but alleged that the
Superfreight Customs Brokerage Corporation was organized with
other   individuals   and   duly   registered   with   the   Securities   and
Exchange Commission in 1987. She denied that she and petitioner
lived as husband and wife because the fact was that they were still
legally married to their respective spouses. She claimed to be the
exclusive   owner   of   all   real   personal   properties   involved   in
petitioner's   action   for   partition   on   the   ground   that   they   were
acquired entirely out of her own money and registered solely in her
name.
On November 25, 1994, respondent filed a Motion for Summary
Judgment,4 in accordance with Rule 34 of the Rules of Court.5 She
contended that summary judgment was proper, because the issues
raised in the pleadings were sham and not genuine, to wit:
A.
The   main   issue   is   —  Can   plaintiff   validly   claim   the
partition   and/or   payment   of co­ownership 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   co­owners   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 co­owner 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 co­ownership 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
144
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   co­owner   of   the   subject
properties on the ground that, since titles to the land are solely in
her name, to grant petitioner's prayer would be to allow a collateral
attack on the validity of such titles.
Petitioner   opposed   respondent's   Motion   for   Summary
Judgment.8 He contended that the case presented genuine factual
issues and that Art. 144 of the Civil Code had been repealed by the
Family   Code   which   now   allows,   under   Art.   148,   a   limited   co­
ownership even though a man and a woman living together are not
capacitated to marry each other. Petitioner also asserted that an
implied trust was constituted when he and respondent agreed to
register the properties solely in the latter's name although the same
were   acquired   out   of   the   profits   made   from   their   brokerage
business. Petitioner invoked the following provisions of the Civil
Code:
Art. 1452. If  two or  more  persons agree  to purchase
property and by common consent the legal title is taken
in the name of one of them for the benefit of all, a trust
is   created   by   force   of   law   in   favor   of   the   others   in
proportion to the interest of each.
Art. 1453. When the property is conveyed to a person in
reliance upon his declared intention to hold it for, or
transfer it to another grantor, there is an implied trust in
favor of the person whose benefit is contemplated.
On January 30, 1995, the trial court rendered its decision 9 granting
respondent's   motion   for   summary   judgment.   It   ruled   that   an
examination of the pleadings shows that the issues involved were
purely legal. The trial court also sustained respondent's contention
that petitioner's action for partition amounted to a collateral attack
on   the   validity   of   the   certificates   of   title   covering   the   subject
properties. It held that even if the parties really had cohabited, the
action  for  partition  could  not  be   allowed  because  an  action  for
partition among co­owners 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.
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.
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 plaintiff­appellant alleged in his complaint that all
the nine (9) titles are registered in the name of defendant­appellee,
Ma.   Elvira   T.   Castillo,   except   one   which   appears   in   the   name
of Eloisa Castillo (see par. 9, Complaint). However, a verification
of   the   annexes   of   such   initiatory   pleading   shows   some
discrepancies, to wit:
1.  TCT  No.  149046 (Annex  A)   = Elvira  T.  Castillo,
single
2. TCT No. 168208 (Annex B) = — do —
3. TCT No. 37046 (Annex C) = — do —
4. TCT No. 37047 (Annex D) = — do —
5. TCT No. 37048 (Annex E) = — do —
6.   TCT   No.   30368   (Annex   F)   = Steelhaus   Realty   &
Dev. Corp.
7. TCT No. 30369 (Annex G) = — do —
8. TCT No. 30371 (Annex F) = — do —
9. TCT No. (92323) 67881 (Annex I) = Eloisa Castillo
In this action, plaintiff­appellant 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 co­ownership
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   co­owner.   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.
145
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   co­ownership   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, set­up 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   co­ownership   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
co­ownership 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 co­ownership 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   co­ownership   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 co­ownership 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 co­ownership eventhough the couple  are not capacitated to
marry each other.
In   this   case,   there   may   be   a   co­ownership   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,
146
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. Co­ownership is a form of trust and every co­owner 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 co­ownership 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 co­ownership
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 co­owner of the subject properties; and Bellosillo,   Quisumbing   and   De   Leon,   Jr.,   JJ.,   concur.
second, the conveyance of his lawful shares. He does not attack Buena, J., took no part.
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   co­owner   of   these   properties   and   as   such   is   entitled   to   the
conveyance of his shares. On the premise that he is a co­owner, he
can validly seek the partition of the properties in co­ownership 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   co­owner.   Besides,   other   than   the   real   properties,
petitioner also seeks partition of a substantial amount of personal
properties   consisting   of   motor   vehicles   and   several   pieces   of
jewelry.   By   dismissing   petitioner's   complaint   for   partition   on
grounds of due process and equity, the appellate court unwittingly
denied petitioner his right to prove ownership over the claimed real
and personal properties. The dismissal of petitioner's complaint is
unjustified   since   both   ends   may   be   amply   served   by   simply
excluding from the action for partition the properties registered in
the name of Steelhouse Realty and Eloisa Castillo.

WHEREFORE,   the   amended  decision   of   the   Court  of   Appeals,

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

SO ORDERED.

147
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 150611            June 10, 2003
JACINTO SAGUID, petitioner,
vs.
HON. COURT OF APPEALS, THE REGIONAL TRIAL  Pass Book shows that as of May 23, 1995, she had a balance of
COURT, BRANCH 94, BOAC, MARINDUQUE AND GINA  P21,046.08.8 She   further   stated   that   she   had   a   total   of
S. REY, respondents.
YNARES­SANTIAGO, J.:
The   regime   of   limited   co­ownership   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.   Co­ownership   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
Seventeen­year   old   Gina   S.   Rey   was   married, 2 but   separated de
facto from her husband, when she met petitioner Jacinto Saguid in
Marinduque, sometime in July 1987.3 After a brief courtship, the
two decided to cohabit as husband and wife in a house built on a
lot owned by Jacinto’s father.4 Their cohabitation was not blessed
with   any  children.   Jacinto   made   a   living   as   the   patron  of   their
fishing vessel "Saguid Brothers."5 Gina, on the other hand, worked
as a fish dealer, but decided to work as an entertainer in Japan from
1992 to 1994 when her relationship with Jacinto’s relatives turned
sour. Her periodic absence, however, did not ebb away the conflict
with petitioner’s relatives. In 1996, the couple decided to separate
and end up their 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
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   answer  to   the   complaint,   petitioner   claimed   that   the
12
expenses for the construction of their house were defrayed solely
from his income as a captain of their fishing vessel. He averred
that private respondent’s meager income as fish dealer rendered
her unable to contribute in the construction of said house. Besides,
selling fish was a mere pastime to her; as such, she was contented
with the small quantity of fish allotted to her from his fishing trips.
Petitioner further contended that Gina did not work continuously in
Japan from 1992 to 1994, but only for a 6­month duration each
year. When their house was repaired and improved sometime in
1995­1996,   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 pre­trial brief as required by Supreme
Court Circular No. 1­89.13
On May 26, 1997, petitioner filed a motion for reconsideration 14 of
the May 21, 1997 order, which was denied on June 2, 1997, and
private   respondent   was   allowed   to   present   evidence ex
parte.15 Petitioner filed another motion for reconsideration but the
same was also denied on October 8, 1997.
148
On July 15, 1998, a decision 16 was rendered in favor of private
respondent, the dispositive portion of which reads:
WHEREFORE, in view of  all the foregoing, judgment is
hereby rendered in favor of the plaintiff Gina S. Rey against
defendant Jacinto Saguid:
a) Ordering the partition of the house identified as plaintiff’s
Exhibit C and D and directing the defendant to return and/or
reimburse to the plaintiff the amount of seventy thousand
pesos (P70,000,00) which the latter actually contributed to
its construction and completion;
b)   Declaring   the   plaintiff   as   the   exclusive   owner   of   the
personal properties listed on Exhibit M;
c) Ordering the defendant, and/or anyone in possession of
the aforesaid personal properties, to return and/or deliver the
same to the plaintiff; and
d)   Ordering   the   defendant   to   pay   the   plaintiff   moral
damages in the  sum of  fifty thousand pesos (P50,000.00)
plus the costs of suit.
SO ORDERED.17
On appeal, said decision was affirmed by the Court of Appeals;
however, the award of P50,000.00 as moral damages was deleted
for lack of basis.18 The appellate court ruled that the propriety of
the order which declared the petitioner as in default became moot
and academic in view of the effectivity of the 1997 Rules of Civil
Procedure. It explained that the new rules now require the filing of
a   pre­trial   brief   and   the   defendant’s   non­compliance   therewith
entitles the plaintiff to present evidence ex parte.
Both parties filed motions for reconsideration which were denied;
hence, petitioner filed the instant petition based on the following
assigned errors:
A.
THE   HONORABLE   COURT   OF   APPEALS
COMMIT[TED] A REVERSIBLE ERROR IN APPLYING
 RETROACTIVELY   THE   1997   RULES   OF   CIVIL
PROCEDURE IN THE PRESENT CASE AND HOLDING
THE FIRST ASSIGNED ERROR THEREIN MOOT AND
ACADEMIC   THUS,   FAILED   TO   RULE   ON   THE
PROPRIETY OF THE TRIAL  COURT’S REFUSAL  TO
SET   ASIDE   THE   ORDER   OF   DEFAULT   DUE   TO
MISTAKE   AND/OR   EXCUSABLE   NEGLIGENCE
COMMITTED BY PETITIONER.
B.
THE   HONORABLE   COURT   OF   APPEALS
COMMIT[TED] A REVERSIBLE ERROR IN RELYING
ON THE FACTUAL FINDINGS OF THE TRIAL COURT
WHICH   RECEIVED   THE   EVIDENCE   OF   HEREIN
RESPONDENT ONLY EX PARTE.19
The  issues for  resolution are: (1)  whether  or  not the  trial  court
erred in allowing private respondent to present evidence ex parte;
and (2) whether or not the trial court’s decision is supported by
evidence.
Under Section 6, Rule 18 of the 1997 Rules of Civil Procedure, the
failure of the defendant to file a pre­trial brief shall have the same
effect as failure  to appear  at the  pre­trial, 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 pre­trial
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 pre­trial 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. Pre­trial rules
are not to be belittled or dismissed because their non­observance
may   result   in   prejudice   to  a   party’s  substantive   rights.   Like   all
rules, they should be followed except only for the most persuasive
of reasons when they may be relaxed to relieve a litigant of an
injustice not commensurate with the degree of his thoughtlessness
in not complying with the procedure prescribed.27
In the instant case, the fact that petitioner was not assisted by a
lawyer is not a persuasive reason to relax the application of the
rules. There is nothing in the Constitution which mandates that a
party in a non­criminal 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 pre­trial 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 pre­trial brief was required
under Circular No. 1­89 which became effective on February 1,
1989. Pursuant to the said circular, "[f]ailure to file pre­trial briefs
may be given the same effect as the failure to appear at the pre­
trial," that is, the party may be declared non­suited 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
149
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   co­ownership   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 co­ownership 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
party’s own evidence and not upon the weakness of the opponent’s
defense.38 This  applies  with more  vigor   where,  as  in the   instant
case, the plaintiff was allowed to present evidence ex parte. The
plaintiff is not automatically entitled to the relief prayed for. The
law gives the defendant some measure of protection as the plaintiff
must still prove the allegations in the complaint. Favorable relief
can   be   granted   only   after   the   court   is   convinced   that   the   facts
proven   by   the   plaintiff   warrant   such   relief.39 Indeed,   the   party
alleging a fact has the burden of proving it and a mere allegation is
not evidence.40
In   the   case   at   bar,   the   controversy   centers   on   the   house   and
personal properties of the parties. Private respondent alleged in her
complaint that she contributed P70,000.00 for the completion of
their house. However, nowhere in her testimony did she specify the
extent   of   her   contribution.   What   appears   in   the   record   are
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 one­half, i.e.,
P55,687.50 each.

The Court of Appeals thus erred in affirming the decision of the
trial   court   which   granted   the   reliefs   prayed   for   by   private
respondent. On the basis of the evidence established, the extent of
private respondent’s co­ownership over the disputed house is only
up to the  amount of P11,413.00, her proven contribution in the
construction   thereof.   Anent   the   personal   properties,   her
participation   therein   should   be   limited   only   to   the   amount   of
P55,687.50.

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

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

SO ORDERED.

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

150
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 169698             November 29, 2006
LUPO ATIENZA, Petitioner,
vs.
YOLANDA DE CASTRO, Respondent.
D E C I S I O N
GARCIA, J.:
Assailed and sought to be set aside in this petition for review on
certiorari   is  the   Decision1 dated  April   29,  2005  of   the  Court   of
Appeals   (CA)   in   CA­G.R.   CV   No.   69797,   as   reiterated   in   its
Resolution2 of September 16, 2005, reversing an earlier decision of
the Regional Trial Court (RTC) of Makati City, Branch 61, in an
action for Judicial Partition of Real Property thereat commenced
by the herein petitioner Lupo Atienza against respondent Yolanda
de Castro.
The Facts
Sometime in 1983, petitioner Lupo Atienza, then the President and
General   Manager   of   Enrico   Shipping   Corporation   and   Eurasian
Maritime Corporation, hired the services of respondent Yolanda U.
De Castro as accountant for the two corporations.
In the course of time, the relationship between Lupo and Yolanda
became   intimate.   Despite   Lupo   being   a   married   man,   he   and
Yolanda   eventually   lived   together   in   consortium   beginning   the
later  part  of   1983.  Out   of  their   union,  two  children  were   born.
However, after the birth of their second child, their relationship
turned sour until they parted ways.
On   May   28,   1992,   Lupo   filed   in   the   RTC   of   Makati   City   a
complaint against Yolanda for the judicial partition between them
of   a   parcel   of   land   with   improvements   located   in   Bel­Air
Subdivision, Makati City and covered by Transfer Certificate of
Title No. 147828 of the Registry of Deeds of Makati City. In his
complaint, docketed in said court as Civil Case No. 92­1423, Lupo
alleged  that the   subject  property  was acquired  during his  union
with   Yolanda   as   common­law   husband   and   wife,   hence   the
property is co­owned by them.
Elaborating,  Lupo  averred  in  his complaint  that the   property in
question   was   acquired   by  Yolanda   sometime   in   1987  using   his
exclusive  funds and that the  title thereto was transferred by the
seller in Yolanda’s name without his knowledge and consent. He
did not interpose any objection thereto because at the time, their
affair was still thriving. It was only after their separation and his
receipt of information that Yolanda allowed her new live­in partner
to   live   in   the   disputed   property,   when   he   demanded   his   share
thereat as a co­owner.
In her answer, Yolanda denied Lupo’s allegations. According to
her, she acquired the same property for Two Million Six Hundred
Thousand Pesos (₱2,600,000.00) using her  exclusive  funds. She
insisted having bought it thru her own savings and earnings as a
businesswoman.
In a decision3 dated December 11, 2000, the trial court rendered
judgment for Lupo by declaring the contested property as owned in
common by him and Yolanda and ordering its partition between
the two in equal shares, thus:
WHEREFORE,   judgment   is   hereby   rendered   declaring   the
property covered by Transfer Certificate of Title No. 147828 of the
Registry   of   Deeds   of   Makati   City   to   be   owned   in   common   by
plaintiff LUPO ATIENZA and the defendant YOLANDA U. DE
CASTRO share­and­share alike and ordering the partition of said
property   between   them.   Upon   the   finality   of   this   Decision,   the
parties are hereby directed to submit for the confirmation of the
Court a mutually agreed project of partition of said property or, in
case the physical partition of said property is not feasible because
of its nature, that either the same be assigned to one of the parties
who shall pay the value corresponding to the share of the other or
that the property to be sold and the proceeds thereof be divided
equally between the parties after deducting the expenses incident
to said sale.
The parties shall bear their own attorney’s fees and expenses of
litigation.
Costs against the defendant.
151
SO ORDERED.
From the decision of the trial court, Yolanda went on appeal to the
CA in CA­G.R. CV No. 69797, therein arguing that the evidence
on record preponderate that she purchased the disputed property in
her   own   name   with   her   own   money.   She   maintained   that   the
documents   appertaining   to   her   acquisition   thereof   are   the   best
evidence to prove who actually bought it, and refuted the findings
of the trial court, as well as Lupo’s assertions casting doubt as to
her financial capacity to acquire the disputed property.
As   stated   at   the   threshold   hereof,   the   appellate   court,   in   its
decision4 of April 29, 2005, reversed and set aside that of the trial
court and adjudged the litigated property as exclusively owned by
Yolanda, to wit:
WHEREFORE, the foregoing considered, the assailed decision is
hereby  REVERSED   and  SET   ASIDE   .   The   subject   property  is
hereby declared to be exclusively owned by defendant­appellant
Yolanda U. De Castro. No costs.
SO ORDERED.
In   decreeing   the   disputed   property   as   exclusively   owned   by
Yolanda, the CA ruled that under the provisions of Article 148 of
the Family Code vis­à­vis the evidence on record and attending
circumstances, Yolanda’s claim of sole ownership is meritorious,
as it has been substantiated by competent evidence. To the CA,
Lupo failed to overcome the burden of proving his allegation that
the subject property was purchased by Yolanda thru his exclusive
funds.
With his motion for reconsideration having been denied by the CA
in its Resolution of September 16, 2005,5 Lupo is now with this
Court   via   the   present   recourse   arguing   that   pursuant   to   Article
1446 of the Civil Code, he was in no way burdened to prove that he
contributed to the acquisition of the subject property because with
or without the contribution by either partner, he is deemed a co­
owner  thereof, adding  that  under  Article  484 7 of  Civil Code, as
long as the property was acquired by either or both of them during
their extramarital union, such property would be legally owned by
them   in   common   and   governed   by   the   rules   on   co­ownership,
which apply in default of contracts, or special provisions.
We DENY.
It is not disputed that the parties herein were not capacitated to
marry   each   other   because   petitioner   Lupo   Atienza   was   validly
married to another woman at the time of his cohabitation with the
respondent.   Their   property   regime,   therefore,   is   governed   by
Article   1488 of   the   Family   Code,   which   applies   to   bigamous
marriages,   adulterous   relationships,   relationships   in   a   state   of
concubinage,   relationships   where   both   man   and   woman   are
married   to   other   persons,   and   multiple   alliances   of   the   same
married man. Under this regime, …only the properties acquired by
both of the parties through their actual joint contribution of money,
property,   or   industry   shall   be   owned   by   them   in   common   in
proportion   to   their   respective   contributions   ... 9 Proof   of   actual
contribution is required.10
As it is, the regime of limited co­ownership 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.   Co­ownership   will
only   be   up   to   the   extent   of   the   proven   actual   contribution   of
money, property or industry. Absent proof of the extent thereof,
their contributions and corresponding shares shall be presumed to
be equal.11
Here,   although   the   adulterous   cohabitation   of   the   parties
commenced in 1983, or way before the effectivity of the Family
Code on August 3, 1998, Article 148 thereof applies because this
provision was intended precisely to fill up the hiatus in Article 144
of the Civil Code.12 Before Article 148 of the Family Code was
enacted, there  was no  provision  governing property  relations  of
couples living in a state of adultery or concubinage. Hence, even if
the cohabitation or the acquisition of the property occurred before
the Family Code took effect, Article 148 governs.13
The applicable law being settled, we now remind the petitioner that
here, as in other civil cases, the burden of proof rests upon the
party who, as determined by the pleadings or the nature of the case,
asserts   an   affirmative   issue.   Contentions   must   be   proved   by
competent evidence and reliance must be had on the strength of the
party’s own evidence and not upon the weakness of the opponent’s
defense.   The   petitioner   as   plaintiff   below   is   not   automatically
entitled to the relief prayed for. The law gives the defendant some
measure   of   protection   as   the   plaintiff   must   still   prove   the
allegations in the complaint. Favorable relief can be granted only
after the court is convinced that the facts proven by the plaintiff
warrant   such   relief.14 Indeed,   the   party   alleging   a   fact   has   the
burden of proving it and a mere allegation is not evidence.15
It   is   the   petitioner’s   posture   that   the   respondent,   having   no
financial   capacity   to   acquire   the   property   in   question,   merely
manipulated the dollar bank accounts of his two (2) corporations to
raise the amount needed therefor. Unfortunately for petitioner, his
submissions are burdened by the fact that his claim to the property
contradicts duly written instruments, i.e., the Contract to Sell dated
March 24, 1987, the  Deed of  Assignment of  Redemption dated
March 27, 1987 and the Deed of Transfer dated April 27, 1987, all
entered into by and between the respondent and the vendor of said
property, to the exclusion of the petitioner. As aptly pointed out by
the CA:
Contrary   to   the   disquisition   of   the   trial   court,   [Lupo]   failed   to
overcome   this   burden.   Perusing   the   records   of   the   case,   it   is
evident  that   the   trial  court  committed  errors  of   judgment   in   its
findings of fact and appreciation of evidence with regard to the
source of the funds used for the purchase of the disputed property
and ultimately the rightful owner thereof. Factual findings of the
trial court are indeed entitled to respect and shall not be disturbed,
unless some facts or circumstances of weight and substance have
been overlooked or misinterpreted that would otherwise materially
affect the disposition of the case.
In making proof of his case, it is paramount that the best and most
complete   evidence   be   formally   entered.   Rather   than   presenting
proof   of  his   actual   contribution   to  the   purchase  money  used  as
consideration for the disputed property, [Lupo] diverted the burden
imposed upon him to [Yolanda] by painting her as a shrewd and
scheming woman without the capacity to purchase any property.
Instead of proving his ownership, or the extent thereof, over the
subject property, [Lupo] relegated his complaint to a mere attack
on the financial capacity of [Yolanda]. He presented documents
pertaining to the ins and outs of the dollar accounts of ENRICO
and EURASIAN, which unfortunately failed to prove  his actual
contribution   in   the   purchase   of   the   said  property.   The   fact  that
[Yolanda] had a limited access to the funds of the said corporations
and had repeatedly withdrawn money from their bank accounts for
their behalf do not prove that the money she used in buying the
disputed property, or any property for that matter, came from said
withdrawals.
As it is, the disquisition of the court a quo heavily rested on the
apparent   financial   capacity   of   the   parties.1âwphi1 On   one   side,
152
there is [Lupo], a retired sea captain and the President and General
Manager   of   two   corporations   and   on   the   other   is   [Yolanda],   a
Certified Public Accountant. Surmising that [Lupo] is financially
well   heeled   than   [Yolanda],   the   court   a   quo   concluded,   sans
evidence, that [Yolanda] had taken advantage of [Lupo]. Clearly,
the court a quo is in error. (Words in brackets supplied.)
As we see it, petitioner’s claim of co­ownership in the disputed
property   is   without   basis   because   not   only   did   he   fail   to
substantiate  his  alleged  contribution  in  the  purchase  thereof  but
likewise the very trail of documents pertaining to its purchase as
evidentiary   proof   redounds   to   the   benefit   of   the   respondent.   In
contrast, aside from his mere say so and voluminous records of
bank   accounts,   which   sadly   find   no   relevance   in   this   case,   the
petitioner failed to overcome his burden of proof. Allegations must
be proven by sufficient evidence. Simply stated, he who alleges a
fact has the burden of proving it; mere allegation is not evidence.
True, the mere issuance of a certificate of title in the name of any
person   does   not   foreclose   the   possibility   that   the   real   property
covered   thereby   may   be   under   co­ownership   with   persons   not
named in the certificate or that the registrant may only be a trustee
or that other parties may have acquired interest subsequent to the
issuance   of   the   certificate   of   title.   However,   as   already   stated,
petitioner’s evidence in support of his claim is either insufficient or
immaterial  to   warrant   the   trial   court’s  finding   that   the   disputed
property falls under the purview of Article 148 of the Family Code.
In contrast to petitioner’s dismal failure to prove his cause, herein
respondent was able to present preponderant evidence of her sole
ownership. There can clearly be no co­ownership when, as here,
the respondent sufficiently established that she derived the funds
used to purchase the property from her earnings, not only as an
accountant   but   also   as   a   businesswoman   engaged   in   foreign
currency trading, money lending and jewelry retail. She presented
her clientele and the promissory notes evincing substantial dealings
with her clients. She also presented her bank account statements
and   bank   transactions,   which   reflect   that   she   had   the   financial
capacity to pay the purchase price of the subject property.
All told, the Court finds and so holds that the CA committed no
reversible  error  in  rendering  the  herein  challenged  decision  and
resolution.
WHEREFORE, the instant petition is DENIED and the assailed
issuances of the CA are AFFIRMED.
Costs against the petitioner.

SO ORDERED.

CANCIO C. GARCIA
Associate Justice

153
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 159310               February 24, 2009
CAMILO F. BORROMEO, Petitioner,
vs.
ANTONIETTA O. DESCALLAR, Respondent.
D E C I S I O N
PUNO, C.J.:
What are the rights of an alien (and his successor­in­interest) 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, Simmering­Graz  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 Antonietta’s residence at a squatters’ area in
Gorordo Avenue.
Jambrich and respondent fell in love and decided to live together in
a   rented   house   in   Hernan   Cortes,   Mandaue   City.   Later,   they
transferred to their own house and lots at Agro­Macro 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,
Jambrich’s name was erased from the document. But it could be
noted that his signature remained on the left hand margin of page
1, beside respondent’s signature as buyer on page 3, and at the
bottom of page 4 which is the last page. Transfer Certificate of
Title (TCT) Nos. 24790, 24791 and 24792 over the properties were
issued in respondent’s name alone.
Jambrich also formally adopted respondent’s two sons in Sp. Proc.
No. 39­MAN,4 and per  Decision of  the  Regional  Trial Court of
Mandaue City dated May 5, 1988.5
However,   the   idyll   lasted   only   until   April   1991.   By   then,
respondent found a new boyfriend while Jambrich began to live
with   another   woman   in   Danao   City.   Jambrich   supported
respondent’s sons for only two months after the break up.
Jambrich met petitioner Camilo F. Borromeo sometime in 1986.
Petitioner was engaged in the real estate business. He also built and
repaired speedboats as a hobby. In 1989, Jambrich purchased an
engine and some accessories for his boat from petitioner, for which
he became indebted to the latter for about ₱150,000.00. To pay for
his   debt,   he   sold   his   rights   and   interests   in   the   Agro­Macro
properties to petitioner for ₱250,000, 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.
154
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, Simmering­Graz Panker A.G.
In its decision, the court a quo found—
Evidence on hand clearly show that at the time of the purchase and
acquisition   of   [the]   properties   under   litigation   that   Wilhelm
Jambrich   was   still   working   and   earning   much.   This   fact   of
Jambrich   earning   much   is   not   only   supported   by   documentary
evidence   but   also   by   the   admission   made   by   the   defendant
Antoniet[t]a   Opalla.   So   that,   Jambrich’s   financial   capacity   to
acquire and purchase the properties . . . is not disputed.7
x x x
On the other hand, evidence . . . clearly show that before defendant
met Jambrich sometime in the latter part of 1984, she was only
working as a waitress at the St. Moritz Hotel with an income of
₱1,000.00 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 "G­1") 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 ₱8,000.00 to
₱9,000.00 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  ₱700,000.00   when   while   she   was   working   as   [a]
waitress at St. Moritz Hotel earning  ₱1,000.00 a month as salary
and tips of more or less ₱2,000.00 she could not even provide [for]
the daily needs of her family so much so that it is safe to conclude
that she was really in financial distress when she met and accepted
the offer of Jambrich to come and live with him because that was a
big financial opportunity for her and her children who were already
abandoned by her husband.9
x x x
The only probable and possible reason why her name appeared and
was included in [the contracts to sell dated November 18, 1985 and
March   10,   1986   and   finally,   the   deed   of   absolute   sale   dated
November 16, 1987] as buyer is because as observed by the Court,
she   being   a   scheming   and   exploitive   woman,   she   has   taken
advantage of the goodness of Jambrich who at that time was still
bewitched by her beauty, sweetness, and good attitude shown by
her to him since he could still very well provide for everything she
needs, he  being  earning  (sic)  much yet at that time. In fact, as
observed by this Court, the acquisition of these properties under
litigation was at the time when their relationship was still going
smoothly and harmoniously.10 [Emphasis supplied.]
The dispositive portion of the Decision states:
WHEREFORE, . . . Decision is hereby rendered in favor of the
plaintiff and against the defendant Antoniet[t]a Opalla by:
1) Declaring plaintiff as the owner in fee simple over
the   residential   house   of   strong   materials   and   three
parcels of land designated as Lot Nos. 1, 3 and 5 which
are   covered   by   TCT   Nos.   24790,   24791   and   24792
issued by the Register of Deeds of Mandaue City;
2) Declaring as null and void TCT Nos. 24790, 24791
and 24792 issued in the name of defendant Antoniet[t]a
Descallar by the Register of Deeds of Mandaue City;
3) Ordering the Register of Deeds of Mandaue City to
cancel TCT Nos. 24790, 24791 and 24792 in the name
of  defendant Antoniet[t]a  Descallar  and to issue  new
ones in the name of plaintiff Camilo F. Borromeo;
4) Declaring the contracts now marked as Exhibits "I,"
"K"   and   "L"   as   avoided   insofar   as   they   appear   to
convey   rights   and   interests   over   the   properties   in
question to the defendant Antoniet[t]a Descallar;
5)   Ordering   the   defendant   to   pay   plaintiff   attorney’s
fees   in   the   amount   of  ₱25,000.00   and   litigation
expenses in the amount of ₱10,000.00; and,
6) To pay the costs.11
Respondent appealed to the Court of Appeals. In a Decision dated
April 10, 2002,12 the appellate court reversed the decision of the
trial court. In ruling for the respondent, the Court of Appeals held:
We disagree with the lower court’s conclusion. The circumstances
involved in  the  case  cited by the  lower  court  and similar  cases
decided on by the Supreme Court which upheld the validity of the
title of the subsequent Filipino purchasers are absent in the case at
bar. It should be noted that in said cases, the title to the subject
property   has   been   issued   in   the   name   of   the   alien   transferee
(Godinez et al., vs. Fong Pak Luen et al., 120 SCRA 223 citing
Krivenko vs. Register of Deeds of Manila, 79 Phils. 461; United
Church Board for World Ministries vs. Sebastian, 159 SCRA 446,
citing   the   case   of   Sarsosa   Vda.   De   Barsobia   vs.   Cuenco,   113
SCRA 547; Tejido vs. Zamacoma, 138 SCRA 78). In the case at
bar, the title of the subject property is not in the name of Jambrich
but in the name of defendant­appellant. Thus, Jambrich could not
have transferred a property he has no title thereto.13
Petitioner’s motion for reconsideration was denied.
Hence, this petition for review.
Petitioner assigns the following errors:
155
I.   THE   HONORABLE   COURT   OF   APPEALS   SERIOUSLY
ERRED   IN   DISREGARDING   RESPONDENT’S   JUDICIAL
ADMISSION   AND   OTHER   OVERWHELMING   EVIDENCE
ESTABLISHING  JAMBRICH’S PARTICIPATION, INTEREST
AND OWNERSHIP OF THE PROPERTIES IN QUESTION AS
FOUND BY THE HONORABLE TRIAL COURT.
II.   THE   HONORABLE   COURT   OF   APPEALS   SERIOUSLY
ERRED IN HOLDING THAT JAMBRICH HAS NO TITLE TO
THE   PROPERTIES   IN   QUESTION   AND   MAY   NOT
THEREFORE TRANSFER AND ASSIGN ANY RIGHTS AND
INTERESTS IN FAVOR OF PETITIONER.
III.   THE   HONORABLE   COURT   OF   APPEALS   SERIOUSLY
ERRED IN REVERSING THE WELL­REASONED 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 Simmering­Graz Panker A.G., an Austrian company.
He was earning an estimated monthly salary of ₱50,000.00. Then,
Jambrich   was   assigned   to   Syria   for   almost   one   year   where   his
monthly salary was approximately ₱90,000.00.
On the other hand, respondent was employed as a waitress from
1984 to 1985 with a monthly salary of not more than ₱1,000.00. In
1986,   when   the   parcels   of   land   were   acquired,   she   was
unemployed, as admitted by her during the  pre­trial 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
respondent’s two sons by Jambrich disclosed that:
Antonietta tried all types of job to support the children until she
was accepted as a waitress at St. Moritz Restaurant in 1984. At
first   she   had   no   problem   with   money   because   most   of   the
customers of St. Moritz are (sic) foreigners and they gave good tips
but towards the end of 1984 there were no more foreigners coming
because   of   the   situation   in   the   Philippines   at   that   time.   Her
financial problem started then. She was even renting a small room
in a squatters area in Gorordo Ave., Cebu City. It was during her
time of great financial distress that she met Wilhelm Jambrich who
later offered her a decent place for herself and her children.16
The DSWD Home Study 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   1986­1987,   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.
Well­settled is the rule that this Court is not a trier of facts. The
findings of fact of the trial court are accorded great weight and
respect,   if   not   finality   by   this   Court,   subject   to   a   number   of
exceptions. In the instant case, we find no reason to disturb the
factual findings of the trial court. Even the appellate court did not
controvert the factual findings of the trial court. They differed only
in their conclusions of law.
Further, the fact that the disputed properties were acquired during
the couple’s cohabitation also does not help respondent. The rule
that 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 co­ownership 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
156
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   well­defined   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 non­Filipinos 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
₱25,000 as attorney’s fees and  ₱10,000 as litigation expenses, as
well as the costs of suit.

We affirm the Regional Trial Court.

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

IN VIEW WHEREOF, the petition is GRANTED. The Decision of
the Court of Appeals in C.A. G.R. CV No. 42929 dated April 10,
2002 and its Resolution dated July 8, 2003 are REVERSED and
SET   ASIDE.   The   Decision   of   the   Regional   Trial   Court   of
Mandaue City in Civil Case No. MAN­1148 is REINSTATED.

SO ORDERED.

REYNATO S. PUNO
Chief Justice

157
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 171914               July 23, 2014
SOLEDAD L. LAVADIA, Petitioner,
vs.
HEIRS OF JUAN LUCES LUNA, represented by  Luna, Carolina  Linda  L.  Tapia, and Cesar  Antonio  Luna.  After
GREGORIO Z. LUNA and EUGENIA ZABALLERO­
LUNA, Respondents.
D E C I S I O N
BERSAMIN, J.:
Divorce   between   Filipinos   is   void   and   ineffectual   under   the
nationality rule adopted by Philippine law. Hence, any settlement
of   property   between   the   parties   of   the   first   marriage   involving
Filipinos   submitted   as   an   incident   of   a   divorce   obtained   in   a
foreign country lacks competent judicial approval, and cannot be
enforceable   against   the   assets   of   the   husband   who   contracts   a
subsequent marriage.
The Case
The petitioner, the second wife of the late Atty. Juan Luces Luna,
appeals   the   adverse   decision   promulgated   on   November   11,
2005,1 whereby   the   Court   of   Appeals   (CA)   affirmed   with
modification   the   decision   rendered   on   August   27,   2001   by   the
Regional Trial Court (RTC), Branch 138, in Makati City. 2 The CA
thereby denied her right in the 25/100 pro indiviso share of the
husband   in   a   condominium   unit,   and   in   the   law   books   of   the
husband acquired during the second marriage.
Antecedents
The antecedent facts were summarized by the CA as follows:
ATTY. LUNA, a practicing lawyer, was at first a name partner in
the prestigious law firm Sycip, Salazar, Luna, Manalo, Hernandez
& Feliciano Law Offices at that time when he was living with his
first   wife,   herein   intervenor­appellant   Eugenia   Zaballero­Luna
(EUGENIA),   whom   he   initially   married   ina   civil   ceremony
conducted   by   the   Justice   of   the   Peace   of   Parañaque,   Rizal   on
September 10, 1947 and later solemnized in a church ceremony at
the Pro­Cathedral in San Miguel, Bulacan on September 12, 1948.
In ATTY. LUNA’s marriage to EUGENIA, they begot seven (7)
children, namely: Regina Maria L. Nadal, Juan Luis Luna, Araceli
Victoria  L. Arellano, Ana Maria L. Tabunda, Gregorio Macario
almost two (2) decades of marriage, ATTY. LUNA and EUGENIA
eventually agreed to live apart from each other in February 1966
and agreed to separation of property, to which end, they entered
into   a   written   agreement   entitled   "AGREEMENT   FOR
SEPARATION   AND   PROPERTY   SETTLEMENT"   dated
November 12, 1975, whereby they agreed to live separately and to
dissolve and liquidate their conjugal partnership of property.
On January 12, 1976, ATTY. LUNA obtained a divorce decree of
his   marriage   with   EUGENIA   from   the   Civil   and   Commercial
Chamber of the First Circumscription of the Court of First Instance
of   Sto.   Domingo,   Dominican   Republic.   Also   in   Sto.Domingo,
Dominican Republic, on the same date, ATTY. LUNA contracted
another marriage, this time with SOLEDAD. Thereafter, ATTY.
LUNA   and   SOLEDAD   returned   to   the   Philippines   and   lived
together as husband and wife until 1987.
Sometime   in   1977,   ATTY.   LUNA   organized   a   new   law   firm
named: Luna, Puruganan, Sison and Ongkiko (LUPSICON) where
ATTY. LUNA was the managing partner.
On   February   14,   1978,   LUPSICON   through   ATTY.   LUNA
purchased from Tandang Sora Development Corporation the 6th
Floor   of   Kalaw­Ledesma   Condominium   Project(condominium
unit)   at   Gamboa   St.,   Makati   City,   consisting   of   517.52   square
meters,   for  ₱1,449,056.00,   to   be   paid   on   installment   basis   for
36months starting on April 15, 1978. Said condominium unit was
to be usedas law  office  of  LUPSICON. After  full payment, the
Deed of Absolute Sale over the condominium unit was executed on
July 15, 1983, and CCT No. 4779 was issued on August 10, 1983,
which was registered bearing the following names:
158
"JUAN   LUCES   LUNA,   married   to   Soledad   L.   Luna   (46/100);
MARIO E. ONGKIKO, married to Sonia P.G. Ongkiko (25/100);
GREGORIO   R.   PURUGANAN,   married   to   Paz   A.   Puruganan
(17/100); and TERESITA CRUZ SISON, married to Antonio J.M.
Sison (12/100) x x x" Subsequently, 8/100 share of ATTY. LUNA
and   17/100   share   of   Atty.   Gregorio   R.   Puruganan   in   the
condominium unit was sold to Atty. Mario E. Ongkiko, for which a
new   CCT   No.   21761   was   issued   on   February   7,   1992   in   the
following names:
"JUAN   LUCES   LUNA,   married   to   Soledad   L.   Luna   (38/100);
MARIO E. ONGKIKO, married to Sonia P.G. Ongkiko (50/100);
TERESITA   CRUZ   SISON,   married   to   Antonio   J.M.   Sison
(12/100) x x x"
Sometime   in   1992,   LUPSICON   was   dissolved   and   the
condominium unit was partitioned by the partners but the same
was still registered in common under CCT No. 21716. The parties
stipulated that the interest of ATTY. LUNA over the condominium
unit would be 25/100 share. ATTY. LUNA thereafter established
and headed another law firm with Atty. Renato G. Dela Cruzand
used a portion of the office condominium unit as their office. The
said law firm lasted until the death of ATTY. JUAN on July 12,
1997.
After the death of ATTY. JUAN, his share in the condominium
unit including the lawbooks, office furniture and equipment found
therein were taken over by Gregorio Z. Luna, ATTY. LUNA’s son
of the first marriage. Gregorio Z. Luna thenleased out the 25/100
portion of the condominium unit belonging to his father to Atty.
Renato G. De la Cruz who established his own law firm named
Renato G. De la Cruz & Associates.
The 25/100 pro­indiviso share of ATTY. Luna in the condominium
unit   as   well   as   the   law   books,   office   furniture   and   equipment
became the subject of the complaint filed by SOLEDAD against
the heirs of ATTY. JUAN with the RTC of Makati City, Branch
138, on September 10, 1999, docketed as Civil Case No. 99­1644.
The  complaint  alleged that  the  subject properties were  acquired
during the existence of the marriage between ATTY. LUNA and
SOLEDAD   through   their   joint   efforts   that   since   they   had   no
children, SOLEDAD became co­owner of the said properties upon
the death of ATTY. LUNA to the extent of ¾ pro­indiviso share
consisting of her ½ share in the said properties plus her ½ share in
the net estate of ATTY. LUNA which was bequeathed to her in the
latter’s last will and testament; and thatthe heirs of ATTY. LUNA
through Gregorio Z. Luna excluded SOLEDAD from her share in
the subject properties. The complaint prayed that SOLEDAD be
declared the owner of the ¾ portion of the subject properties;that
the same be partitioned; that an accounting of the rentals on the
condominium   unit   pertaining   to   the   share   of   SOLEDAD   be
conducted; that a receiver be appointed to preserve ad administer
the   subject   properties;and   that   the   heirs   of   ATTY.   LUNA   be
ordered to pay attorney’s feesand costs of the suit to SOLEDAD.3
Ruling of the RTC
On August 27, 2001, the RTC rendered its decision after trial upon
the aforementioned facts,4 disposing thusly:
WHEREFORE, judgment is rendered as follows:
(a) The 24/100 pro­indiviso share in the condominium
unit   located   at   the   SIXTH   FLOOR   of   the   KALAW
LEDESMA   CONDOMINIUM   PROJECT   covered   by
Condominium Certificate of Title No. 21761 consisting
of   FIVE   HUNDRED   SEVENTEEN   (517/100)
SQUARE METERS is adjudged to have been acquired
by Juan Lucas Luna through his sole industry;
(b) Plaintiff has no right as owner or under any other
concept over the condominium unit, hence the entry in
Condominium   Certificate   of   Title   No.   21761   of   the
Registry of Deeds of Makati with respect to the civil
status   of   Juan   Luces   Luna   should   be   changed   from
"JUAN LUCES LUNA married to Soledad L. Luna" to
"JUAN LUCES LUNA married to Eugenia Zaballero
Luna";
(c) Plaintiff is declared to be the owner of the books
Corpus   Juris,   Fletcher   on   Corporation,   American
Jurisprudence   and   Federal   Supreme   Court   Reports
found   in   the   condominium   unit   and   defendants   are
ordered   to   deliver   them   to   the   plaintiff   as   soon   as
appropriate arrangements have been madefor transport
and storage.
No pronouncement as to costs.
SO ORDERED.5
Decision of the CA
Both parties appealed to the CA.6
On   her   part,   the   petitioner   assigned   the   following   errors   to   the
RTC, namely:
I. THE LOWER COURT ERRED IN RULING THAT
THE   CONDOMINIUM   UNIT   WAS   ACQUIRED
THRU   THE   SOLE   INDUSTRY   OF   ATTY.   JUAN
LUCES LUNA;
II. THE LOWER COURT ERRED IN RULING THAT
PLAINTIFFAPPELLANT   DID   NOT   CONTRIBUTE
MONEY   FOR   THE   ACQUISITION   OF   THE
CONDOMINIUM UNIT;
III.   THE   LOWER   COURT   ERRED   IN   GIVING
CREDENCE TO PORTIONS OF THE TESTIMONY
OF   GREGORIO   LUNA,   WHO   HAS   NO   ACTUAL
KNOWLEDGE   OF   THE   ACQUISITION   OF   THE
UNIT, BUT IGNORED OTHER PORTIONS OF HIS
TESTIMONY   FAVORABLE   TO   THE   PLAINTIFF­
APPELLANT;
IV. THE LOWER COURT ERRED IN NOT GIVING
SIGNIFICANCE   TO   THE   FACT   THAT   THE
CONJUGAL   PARTNERSHIP   BETWEEN   LUNA
AND INTERVENOR­APPELLANT WAS ALREADY
DISSOLVED   AND   LIQUIDATED   PRIOR   TO   THE
UNION OF PLAINTIFF­APPELLANT AND LUNA;
V.   THE   LOWER   COURT   ERRED   IN   GIVING
UNDUE   SIGNIFICANCE   TO   THE   ABSENCE   OF
THE DISPOSITION OF THE CONDOMINIUM UNIT
IN   THE   HOLOGRAPHIC   WILL   OF   THE
PLAINTIFF­APPELLANT;
VI.   THE   LOWER   COURT   ERRED   IN   GIVING
UNDUE SIGNIFICANCE TO THE FACTTHAT THE
NAME   OF   PLAINTIFF­APPELLANT   DID   NOT
APPEAR   IN   THE   DEED   OF   ABSOLUTE   SALE
EXECUTED   BY   TANDANG   SORA
DEVELOPMENT   CORPORATION   OVER   THE
CONDOMINIUM UNIT;
159
VII.   THE   LOWER   COURT   ERRED   IN   RULING
THAT   NEITHER   ARTICLE   148   OF   THE
FAMILYCODE NOR ARTICLE 144 OF THE CIVIL
CODE OF THE PHILIPPINES ARE APPLICABLE;
VIII.   THE   LOWER   COURT   ERRED   IN   NOT
RULING THAT THE CAUSE OF ACTION OF THE
INTERVENOR­APPELLANT   HAS   BEEN   BARRED
BY PESCRIPTION AND LACHES; and
IX.   THE   LOWER   COURT   ERRED   IN   NOT
EXPUNGING/DISMISSING   THE   INTERVENTION
FOR FAILURE OF INTERVENOR­APPELLANT TO
PAY FILING FEE.7
In contrast, the respondents attributedthe following errors to the
trial court, to wit:
I.   THE   LOWER   COURT   ERRED   IN   HOLDING
THAT CERTAIN FOREIGN LAW BOOKS IN THE
LAW   OFFICE   OF   ATTY.   LUNA   WERE   BOUGHT
WITH THE USE OF PLAINTIFF’S MONEY;
II.   THE   LOWER   COURT   ERRED   IN   HOLDING
THAT   PLAINTIFF   PROVED   BY
PREPONDERANCE   OF   EVIDENCE   (HER   CLAIM
OVER)   THE   SPECIFIED   FOREIGN   LAW   BOOKS
FOUND IN ATTY. LUNA’S LAW OFFICE; and
III.   THE   LOWER   COURT   ERRED   IN   NOT
HOLDING   THAT,   ASSUMING   PLAINTIFF   PAID
FOR   THE   SAID   FOREIGN   LAW   BOOKS,   THE
RIGHT   TO   RECOVER   THEM   HAD   PRESCRIBED
AND BARRED BY LACHES AND ESTOPPEL.8
On November 11, 2005, the CA promulgated its assailed modified
decision,9 holding and ruling:
EUGENIA,   the   first   wife,   was   the   legitimate   wife   of   ATTY.
LUNA   until   the   latter’s   death   on   July   12,   1997.   The   absolute
divorce   decree   obtained   by   ATTY.   LUNA   inthe   Dominican
Republic   did   not   terminate   his   prior   marriage   with   EUGENIA
because foreign divorce between Filipino citizens is not recognized
in our jurisdiction. x x x10
x x x x
WHEREFORE, premises considered, the assailed August 27, 2001
Decision   of   the   RTC   of   MakatiCity,   Branch   138,   is   hereby
MODIFIEDas follows:
(a) The 25/100 pro­indiviso share in the condominium
unit at the SIXTH FLOOR of the KALAW LEDESMA
CONDOMINIUM   PROJECT   covered   by
Condominium Certificate of Title No. 21761 consisting
of   FIVE   HUNDRED   SEVENTEEN   (517/100)   (sic)
SQUARE METERS is hereby adjudged to defendants­
appellants, the heirs of Juan Luces Luna and Eugenia
Zaballero­Luna (first marriage), having been acquired
from the   sole   funds and sole   industry of  Juan  Luces
Luna while marriage of Juan Luces Luna and Eugenia
Zaballero­Luna (first marriage) was still subsisting and
valid;
(b) Plaintiff­appellant Soledad Lavadia has no right as
owner   or   under   any   other   concept   over   the
condominium   unit,   hence   the   entry   in   Condominium
Certificate of Title No. 21761 of the Registry of Deeds
ofMakati with respect to the civil status of Juan Luces
Luna should be changed from "JUAN LUCES LUNA
married to Soledad L. Luna" to "JUAN LUCES LUNA
married to Eugenia Zaballero Luna";
(c) Defendants­appellants, the heirs of Juan Luces Luna
and Eugenia Zaballero­Luna(first marriage) are hereby
declared  to  be   the   owner   of  the  books  Corpus  Juris,
Fletcher  on Corporation, American Jurisprudence and
Federal   Supreme   Court   Reports   found   in   the
condominium unit.
No pronouncement as to costs.
SO ORDERED. 11
On March 13, 2006,12 the CA denied the petitioner’s motion for
reconsideration.13
Issues
In this appeal, the petitioner avers in her petition for review on
certiorarithat:
A. The Honorable Court of Appeals erred in ruling that
the Agreement for Separation and Property Settlement
executed   by   Luna   and   Respondent   Eugenia   was
unenforceable;   hence,   their   conjugal   partnership   was
not dissolved and liquidated;
B.   The   Honorable   Court   of   Appeals   erred   in   not
recognizing the  Dominican Republic court’s approval
of the Agreement;
C. The Honorable Court of Appeals erred in ruling that
Petitioner   failed   to   adduce   sufficient   proof   of   actual
contribution   to   the   acquisition   of   purchase   of   the
subjectcondominium unit; and
D. The Honorable Court of Appeals erred in ruling that
Petitioner was not entitled to the subject law books.14
The decisive question to be resolved is who among the contending
parties should be entitled to the 25/100 pro indivisoshare in the
condominium   unit;   and   to   the   law   books   (i.e.,   Corpus   Juris,
Fletcher   on   Corporation,   American   Jurisprudence   and   Federal
Supreme Court Reports).
The   resolution   of   the   decisive   question   requires   the   Court   to
ascertain the law that should determine, firstly, whether the divorce
between  Atty.  Luna  and  Eugenia  Zaballero­Luna   (Eugenia)  had
validly   dissolved   the   first   marriage;   and,   secondly,   whether   the
second   marriage   entered   into   by   the   late   Atty.   Luna   and   the
petitioner entitled the latter to any rights in property. Ruling of the
Court
We affirm the modified decision of the CA.
1.   Atty.   Luna’s   first   marriage   with   Eugenia
subsisted up to the time of his death
The first marriage between Atty. Luna and Eugenia, both Filipinos,
was solemnized in the Philippines on September 10, 1947. The law
in force at the  time of  the  solemnization was the Spanish Civil
Code, which adopted the nationality rule. The Civil Codecontinued
to  follow  the   nationality  rule, to  the  effect  that Philippine   laws
160
relating to family rights and duties, or to the status, condition and
legal   capacity   of   persons   were   binding   upon   citizens   of   the
Philippines,   although  living   abroad.15 Pursuant   to   the   nationality
rule, Philippine laws governed thiscase by virtue of bothAtty. Luna
and Eugenio having  remained  Filipinos  until  the  death  of  Atty.
Luna on July 12, 1997 terminated their marriage.
From the time of the celebration ofthe first marriage on September
10,   1947   until   the   present,   absolute   divorce   between   Filipino
spouses   has   not   been   recognized   in   the   Philippines.   The   non­
recognition   of   absolute   divorce   between   Filipinos   has   remained
even under the Family Code,16 even if either or both of the spouses
are   residing   abroad.17 Indeed,   the   only   two   types   of   defective
marital unions under our laws have beenthe void and the voidable
marriages. As such, the remedies against such defective marriages
have been limited to the declaration of nullity ofthe marriage and
the annulment of the marriage.
It is true that on January 12, 1976, the Court of First Instance (CFI)
of Sto. Domingo in the Dominican Republic issued the Divorce
Decree   dissolving   the   first   marriage   of   Atty.   Luna   and
Eugenia.18 Conformably   with   the   nationality   rule,   however,   the
divorce, even if voluntarily obtained abroad, did not dissolve the
marriage between Atty. Luna and Eugenia, which subsisted up to
the time of his death on July 12, 1997. This finding conforms to
the   Constitution,   which   characterizes   marriage   as   an   inviolable
social institution,19 and regards it as a special contract of permanent
union   between   a   man   and   a   woman   for   the   establishment   of   a
conjugal and family life.20 The non­recognition of absolute divorce
in the Philippines is a manifestation of the respect for the sanctity
of the marital union especially among Filipino citizens. It affirms
that the extinguishment of a valid marriage must be grounded only
upon   the   death   of   either   spouse,   or   upon   a   ground   expressly
provided   bylaw.   For   as   long   as   this   public   policy   on   marriage
between Filipinos exists, no divorce decree dissolving the marriage
between them can ever be given legal or judicial recognition and
enforcement in this jurisdiction.
2.   The   Agreement   for   Separation   and   Property   Settlement
was void for lack of court approval
The   petitioner   insists   that   the   Agreement   for   Separation   and
Property   Settlement   (Agreement)   that   the   late   Atty.   Luna   and
Eugenia   had   entered   into   and   executed   in   connection   with   the
divorce   proceedings   before   the   CFI   of   Sto.   Domingo   in   the
Dominican   Republic   to   dissolve   and   liquidate   their   conjugal
partnership   was   enforceable   against   Eugenia.   Hence,   the   CA
committed reversible error in decreeing otherwise.
The insistence of the petitioner was unwarranted.
Considering that Atty. Luna and Eugenia had not entered into any
marriage settlement prior to their marriage on September 10, 1947,
the system of relative community or conjugal partnership of gains
governed their property relations. This is because the Spanish Civil
Code, the law then in force at the time of their marriage, did not
specify the property regime of the spouses in the event that they
had not entered into any marriage settlement before or at the time
of the marriage. Article 119 of the Civil Codeclearly so provides,
to wit:
Article 119. The future spouses may in the marriage settlements
agree upon absolute or relative community of property, or upon
complete separation of property, or upon any other regime. In the
absence of marriage settlements, or when the same are void, the
system of relative community or conjugal partnership of gains as
established   in   this   Code,   shall   govern   the   property   relations
between husband and wife.
Article 142 of the Civil Codehas defined a conjugal partnership of
gains thusly:
Article   142. By  means of  the   conjugal  partnership  of  gains the
husband   and   wife   place   in   a   common   fund   the   fruits   of   their
separate property and the income from their work or industry, and
divide   equally,   upon   the   dissolution   of   the   marriage   or   of   the
partnership, the net gains or benefits obtained indiscriminately by
either spouse during the marriage.
The conjugal partnership of gains subsists until terminated for any
of various causes of termination enumerated in Article 175 of the
Civil Code, viz:
Article 175. The conjugal partnership of gains terminates:
(1) Upon the death of either spouse;
(2) When there is a decree of legal separation;
(3) When the marriage is annulled;
(4)   In   case   of   judicial   separation   of   property   under
Article 191.
The mere execution of the Agreement by Atty. Luna and Eugenia
did not per sedissolve and liquidate their conjugal partnership of
gains. The approval of the Agreement by a competent court was
still required under Article 190 and Article 191 of the Civil Code,
as follows:
Article   190.   In   the   absence   of   an   express   declaration   in   the
marriage settlements, the separation of property between spouses
during the marriage shall not take place save in virtue of a judicial
order. (1432a)
Article 191. The husband or the wife may ask for the separation of
property, and it shall be decreed when the spouse of the petitioner
has   been   sentenced   to   a   penalty   which   carries   with   it   civil
interdiction, or has been declared absent, or when legal separation
has been granted.
x x x x
The husband and the wife may agree upon the dissolution of the
conjugal   partnership   during   the   marriage,   subject   to   judicial
approval. All the creditors of the husband and of the wife, as well
as of the conjugal partnership shall be notified of any petition for
judicialapproval   or   the   voluntary   dissolution   of   the   conjugal
partnership, so that any such creditors may appear atthe hearing to
safeguard   his   interests.   Upon   approval   of   the   petition   for
dissolution of the conjugal partnership, the court shall take such
measures as may protect the creditors and other third persons.
After   dissolution   of   the   conjugal   partnership,   the   provisions   of
articles   214   and   215   shall   apply.   The   provisions   of   this   Code
concerning the effect of partition stated in articles 498 to 501 shall
be applicable. (1433a)
But was not the  approval of the Agreement by the CFI  of Sto.
Domingo in the Dominican Republic sufficient in dissolving and
liquidating the conjugal partnership of gains between the late Atty.
Luna and Eugenia?
The query is answered in the negative. There is no question that
the approval took place only as an incident ofthe action for divorce
instituted by Atty. Luna and Eugenia, for, indeed, the justifications
161
for their execution of the Agreement were identical to the grounds
raised in the action for divorce.21 With the divorce not being itself
valid and enforceable under Philippine law for being contrary to
Philippine   public   policy   and   public   law,   the   approval   of   the
Agreement   was   not   also   legally   valid   and   enforceable   under
Philippine law. Consequently, the conjugal partnership of gains of
Atty. Luna and Eugenia subsisted in the lifetime of their marriage.
3.   Atty.   Luna’s   marriage   with   Soledad,   being   bigamous,
was   void;   properties   acquired   during   their   marriage
were governed by the rules on co­ownership
What law governed the property relations of the second marriage
between Atty. Luna and Soledad?
The CA expressly declared that Atty. Luna’s subsequent marriage
to Soledad on January 12, 1976 was void for being bigamous, 22 on
the ground that the marriage between Atty. Luna and Eugenia had
not been dissolved by the Divorce Decree rendered by the CFI of
Sto. Domingo in the Dominican Republic but had subsisted until
the death of Atty. Luna on July 12, 1997.
The Court concurs with the CA.
In the Philippines, marriages that are bigamous, polygamous, or
incestuous are void. Article 71 of the Civil Codeclearly states:
Article   71.   All   marriages   performed   outside   the   Philippines   in
accordance with the laws in force in the country where they were
performed,   and   valid   there   as   such,   shall   also   be   valid   in   this
country, except bigamous, polygamous, or incestuous marriages as
determined by Philippine law.
Bigamy is an illegal marriage committed by contracting a second
or subsequent marriage before the first marriage has been legally
dissolved,   or   before   the   absent   spouse   has   been   declared
presumptively dead by means of a judgment rendered in the proper
proceedings.23 A bigamous marriage is considered void ab initio.24
Due to the second marriage between Atty. Luna and the petitioner
being void ab initioby virtue of its being bigamous, the properties
acquired during the bigamous marriage were governed by the rules
on co­ownership, conformably with Article 144 of the Civil Code,
viz:
Article 144. When a man and a woman live together as husband
and wife, but they are not married, ortheir marriage is void from
the   beginning,   the   property   acquired   by   eitheror   both   of   them
through their work or industry or their wages and salaries shall be
governed by the rules on co­ownership.(n)
In   such   a   situation,   whoever   alleges   co­ownership   carried   the
burden   of   proof   to   confirm   such   fact.1âwphi1 To   establish   co­
ownership,   therefore,   it   became   imperative   for   the   petitioner   to
offer   proof   of   her   actual   contributions   in   the   acquisition   of
property. Her mere allegation of co­ownership, without sufficient
and competent evidence, would warrant no relief in her favor. As
the Court explained in Saguid v. Court of Appeals:25
In the cases of Agapay v. Palang, and Tumlos v. Fernandez, which
involved the  issue of co­ownership ofproperties 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 co­ownership
of the petitioners therein who were parties to the bigamous and
adulterousunion is without basis because they failed to substantiate
their allegation that they contributed money in the purchase of the
disputed properties. Also in Adriano v. Court of Appeals, we ruled
that the fact that the controverted property was titled in the name of
the parties to an adulterous relationship is not sufficient proof of
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
party’s own evidence and not upon the weakness of the opponent’s
defense. This applies with more vigor where, as in the instant case,
the plaintiff was allowed to present evidence ex parte.1âwphi1 The
plaintiff is not automatically entitled to the relief prayed for. The
law gives the defendantsome measure of protection as the plaintiff
must still prove the allegations in the complaint. Favorable relief
can   be   granted   only   after   the   court   isconvinced   that   the   facts
proven   by   the   plaintiff   warrant   such   relief.   Indeed,   the   party
alleging a fact has the burden of proving it and a mereallegation is
not evidence.26
The petitioner asserts herein that she sufficiently proved her actual
contributions   in   the   purchase   of   the   condominium   unit   in   the
aggregate   amount   of   at   least  ₱306,572.00,   consisting   in   direct
contributions of ₱159,072.00, and in repaying the loans Atty. Luna
had obtained from Premex Financing and Banco Filipino totaling
₱146,825.30;27 and   that   such   aggregate   contributions   of
₱306,572.00 corresponded to almost the entire share of Atty. Luna
in   the   purchase   of   the   condominium   unit   amounting   to
₱362,264.00 of the unit’s purchase price of  ₱1,449,056.00.28 The
petitioner further asserts that the lawbooks were paid for solely out
of her personal funds, proof of which Atty. Luna had even sent her
a "thank you" note;29 that she had the financial capacity to make
the   contributions   and   purchases;   and   that   Atty.   Luna   could   not
acquire the properties on his own due to the meagerness of the
income derived from his law practice.
Did   the   petitioner   discharge   her   burden   of   proof   on   the   co­
ownership?
In resolving the question, the CA entirely debunked the petitioner’s
assertions   on   her   actual   contributions   through   the   following
findings and conclusions, namely:
SOLEDAD was not able to prove by preponderance of evidence
that her own independent funds were used to buy the law office
condominium and the law books subject matter in contentionin this
case – proof that was required for Article 144 of the New Civil
Code and Article 148 of the Family Code to apply – as to cases
where   properties   were   acquired   by   a   man   and   a   woman   living
together as husband and wife but not married, or under a marriage
which  was  void   ab   initio.   Under   Article   144   of   the   New   Civil
Code, the rules on co­ownership would govern. But this was not
readily applicable to many situations and thus it created a void at
first because it applied only if the  parties were not in any way
incapacitated or were without impediment to marry each other (for
it would be absurd to create a co­ownership where there still exists
a prior conjugal partnership or absolute community between the
man and his lawful wife). This void was filled upon adoption of
the   Family   Code.   Article   148   provided   that:   only   the   property
acquired   by   both   of   the   parties   through   their   actual   joint
contribution   of   money,   property   or   industry   shall   be   owned   in
common and in proportion to their respective contributions. Such
contributions and corresponding shares were prima faciepresumed
to be equal. However, for this presumption to arise, proof of actual
contribution was required. The same rule and presumption was to
apply to joint deposits of money and evidence of credit. If one of
the parties was validly married to another, his or her share in the
co­ownership   accrued   to   the   absolute   community   or   conjugal
partnership existing in such valid marriage. If the party who acted
162
in bad faith was not validly married to another, his or her share
shall be forfeited in the manner provided in the last paragraph of
the Article 147. The rules on forfeiture applied even if both parties
were in bad faith. Co­ownership was the exception while conjugal
partnership of gains was the strict rule whereby marriage was an
inviolable social institution and divorce decrees are not recognized
in the Philippines, as was held by the Supreme Court in the case of
Tenchavez vs. Escaño, G.R. No. L­19671, November 29, 1965, 15
SCRA 355, thus:
x x x x
As   to   the   25/100pro­indivisoshare   of   ATTY.   LUNA   in   the
condominium unit, SOLEDAD failed to prove that she made an
actual   contribution   to   purchase   the   said   property.   She   failed   to
establish that the four (4) checks that she presented were indeed
used   for   the   acquisition   of   the   share   of   ATTY.   LUNA   in   the
condominium unit. This was aptly explained in the Decision of the
trial court, viz.:
"x x x The first check, Exhibit "M" for ₱55,000.00 payable to Atty.
Teresita Cruz Sison was issued on January 27, 1977, which was
thirteen   (13)   months   before   the   Memorandum   of   Agreement,
Exhibit "7" was signed. Another check issued on April 29, 1978 in
the   amount   of  ₱97,588.89,   Exhibit   "P"   was   payable   to   Banco
Filipino. According to the plaintiff, thiswas in payment of the loan
of Atty. Luna. The third check which was for ₱49,236.00 payable
to PREMEX was dated May 19, 1979, also for payment of the loan
of Atty. Luna. The fourth check, Exhibit "M", for  ₱4,072.00 was
dated December 17, 1980. None of the foregoing prove that the
amounts   delivered   by   plaintiff   to   the   payees   were   for   the
acquisition of the subject condominium unit. The connection was
simply not established. x x x"
SOLEDAD’s   claim   that   she   made   a   cash   contribution   of
₱100,000.00   is   unsubstantiated.   Clearly,   there   is   no   basis   for
SOLEDAD’s claim of co­ownership over the 25/100 portion of the
condominium unit and the trial court correctly found that the same
was acquired through the sole industry of ATTY. LUNA, thus:
"The   Deed   of   Absolute   Sale,   Exhibit   "9",   covering   the
condominium unit was in the name of Atty. Luna, together with his
partners in the law firm. The name of the plaintiff does not appear
as vendee or as the spouse of Atty. Luna. The same was acquired
for the use of the Law firm of Atty. Luna. The loans from Allied
Banking Corporation and Far East Bank and Trust Company were
loans of Atty. Luna and his partners and plaintiff does not have LUCAS P. BERSAMIN
evidence to show that she paid for them fully or partially. x x x" Associate Justice

The fact that CCT No. 4779 and subsequently, CCT No. 21761
were in the name of "JUAN LUCES LUNA, married to Soledad L.
Luna"   was   no   proof   that   SOLEDAD   was   a   co­owner   of   the
condominium unit. Acquisition of title and registration thereof are
two different acts. It is well settled that registration does not confer
title but merely confirms one already existing. The phrase "married
to" preceding "Soledad L. Luna" is merely descriptive of the civil
status of ATTY. LUNA.

SOLEDAD, the second wife, was not even a lawyer. So it is but
logical that SOLEDAD had no participation in the law firm or in
the purchase of books for the law firm. SOLEDAD failed to prove
that she had anything to contribute and that she actually purchased
or paid for the law office amortization and for the law books. It is
more logical to presume that it was ATTY. LUNA who bought the
law office space and the  law  books from his earnings from his
practice   of   law   rather   than   embarrassingly   beg   or   ask   from
SOLEDAD money for use of the law firm that he headed.30

The Court upholds the foregoing findings and conclusions by the
CA   both   because   they   were   substantiated   by   the   records   and
because we have not been shown any reason to revisit and undo
them.   Indeed,   the   petitioner,   as   the   party   claiming   the   co­
ownership,   did   not   discharge   her   burden   of   proof.   Her   mere
allegations on her contributions, not being evidence,31 did not serve
the purpose. In contrast, given the subsistence of the first marriage
between Atty. Luna and Eugenia, the presumption that Atty. Luna
acquired the properties out of his own personal funds and effort
remained. It should then be justly concluded that the properties in
litislegally pertained to their conjugal partnership of gains as of the
time of his death. Consequently, the sole ownership of the 25/100
pro indivisoshare of Atty. Luna in the condominium unit, and of
the lawbooks pertained to the respondents as the lawful heirs of
Atty. Luna.

WHEREFORE, the Court AFFIRMS the decision promulgated on
November 11, 2005; and ORDERS the petitioner to pay the costs
of suit.

SO ORDERED.

163
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 200969            August 03, 2015
CONSOLACION D. ROMERO AND ROSARIO S. D.  claim that the deed of sale is a forgery and that as heirs of Macario
DOMINGO, Petitioners,
vs.
ENGRACIA D. SINGSON, Respondent.
D E C I S I O N
DEL CASTILLO, J.:
This   Petition   for   Review   on Certiorari seeks   to   set   aside   the
February 29, 2012 Decision of the Court of Appeals (CA) in CA­
G.R. SP No. 114363 which granted herein respondent's Petition for
Review, reversed the December 11, 2009 Order of the Regional
Trial Court of Pasig City, Branch 160 (RTC) in SCA No. 3144,
and reinstated the said RTC's April 29, 2009 Decision.
Factual Antecedents
The parties herein ­ petitioners Consolacion Domingo Romero and
Rosario S.D. Domingo and respondent Engracia Domingo Singson
­ are siblings. Their parents, Macario and Felicidad Domingo, own
a 223­square meter piece of property (the subject property) located
at 127 F. Sevilla Street, San Juan City, Metro Manila covered by
Transfer   Certificate   of   Title   No.   (32600)   (23937)   845­R5 (TCT
845­R) which was issued in 1953. It appears that petitioners and
other   siblings,   Rafael   and   Ramon   Domingo,   are   the   actual
occupants of the subject property, having stayed there with their
parents   since   birth.   On   the   other   hand,   respondent   took   up
residence in Mandaluyong City after getting married.
On February 22, 1981, Macario passed away, while Felicidad died
on September 14, 1997.6
On June 7, 2006, TCT 845­R was cancelled and a new certificate
of title ­Transfer Certificate of Title No. 12575­R7 or 125758 (TCT
12575) ­ was issued in respondent's name, by virtue of a notarized
"Absolute Deed of Sale"9 ostensibly executed on June 6, 2006 by
and between Macario and Felicidad ­ as sellers, and respondent ­ as
buyer. And this despite the fact that Macario and Felicidad were
then   already   deceased.
Soon thereafter, respondent sent letters to her siblings demanding
that they vacate the subject property, under pain of litigation.
Petitioners   and   their   other   siblings   just   as   soon   filed   a
Complaint10 against respondent and the Register of Deeds of San
Juan City for annulment and cancellation of TCT 12575 and the
June   6,   2006  deed   of   sale,   reconveyance,  and  damages,  on   the
and Felicidad, the true owners of the subject property, they were
entitled to a reconveyance of the same. The case was docketed as
Civil Case No. 70898­SJ and assigned to Branch 160 of the RTC
of Pasig City.
Ruling of the Metropolitan Trial Court (MeTC)
On September 26, 2006, respondent filed an unlawful detainer suit
against petitioners and her brothers Rafael and Ramon before the
MeTC of San Juan City. Docketed as Civil Case No. 9534 and
assigned   to   MeTC   Branch   58,   respondent   in   her
Complaint11 sought to evict her siblings from the subject property
on the claim that she is the owner of the same; that her siblings'
stay therein was merely tolerated; and that she now needed the
premises to serve as her daughters' residence. Thus, she prayed that
her siblings be ordered to vacate the premises and pay monthly
rent   of   P2,000.00   from   date   of   demand   until   they   vacate   the
premises, as well as attorney's fees and costs of suit.
In their Answer,12 petitioners prayed for  dismissal, claiming that
the June 6, 2006 deed of sale was a forgery, and no certificate of
title   in   her   name   could   be   issued;   that   they   thus   remained   co­
owners  of   the   subject  property,  and  respondent  had  no  right   to
evict them; and that the pendency of Civil Case No. 70898­SJ bars
the ejectment suit against them.
After proceedings or on September 17, 2007, the MeTC rendered a
Decision,13 decreeing as follows:
Anent the first issue of jurisdiction, the Court answers in the
affirmative xxx.
xxxx
From the above­quoted verse, the Metropolitan Trial Courts,
Municipal Trial Courts and Municipal Circuit Trial Courts
have   the   exclusive   original   jurisdiction   over   this   case.
Moreover, in the case of Hilario vs. Court of Appeals, (260
SCRA   420,426   citing:   Refugia,   Et   al[.]   vs.   Court   of
164
Appeals,   Et   al[.,]   G.R.   No.   118284,   July   4,   1996)   the
Supreme Court held: 'xxx inferior courts retain jurisdiction
over   ejectment   cases   even   if   the   question   of   possession
cannot   be   resolved   without   passing   upon   the   issue   of
ownership; but this is subject to the caveat that the issue
raised as to ownership be resolved by the Trial Court for the
sole purpose of determining the issue of possession x x x.'
Thus,   even   where   the   defendants   assert   in   their   Answer,
ownership of or Title to the property, the inferior Court is
not deprived of its jurisdiction, xxx
xxxx
As to the second issue as to whether or not plaintiff may
validly eject the defendants, again this Court answers in the
affirmative, since the plaintiff is a holder of a Torrens Title
which is a right in rem. The defendants in their defense that
they   have   filed   a   case   before   the   Regional   Trial   Court
questioning   the   Title   of   the   plaintiff   is   their   right   and
prerogative, unless however restrained by higher court, this
Court will proceed as mandated by law and jurisprudence.
This action for unlawful detainer is sanctioned by Rule 70
of the 1997 Rules of Civil Procedure which provides:
xxxx
While the defendants claim that their parents are still the
owner[s]   of   the   subject   property   in   litigation   and   during
their lifetime have not awarded nor alienated said property
to   anybody,   why   then   has   plaintiff   the   Title   of   said
property? If it was secured fraudulently, the same is of no
moment   since   it   has   its   own   forum   to   address   to   [sic].
Moreover,   the   pendency   of   an   action   questioning   the
ownership   of   the   property   does   not   bar   the   filing   or
consideration of an ejectment suit nor the execution of the
judgment   therein   xxx.   As   correctly   pointed   out   by   the
plaintiff, 'ownership may be exercised over things or rights,'
Art. 427 of the New Civil Code. Likewise, Art. 428 of the
same code provides that: 'the owner has the right to enjoy
and dispose of a thing, without other limitations than those
established by  law.  The   owner  has also a  right  of  action
against   the   holder  and  possessor  of   the  thing   in  order  to
recover   it.'   Further,   Art.   434   states   that   'in   an   action   to
recover, the  property must be  identified, and the  plaintiff
must   rely   on   the   strength   of   his   Title   and   not   on   the
weakness of the defendant's claim.' The defendants therefore
 can be validly ejected from the premises in question since
this is not accion publiciana as claimed by the defendants.
Finally, on the third issue of damages and the side issue of
reasonable compensation for the use of the subject premises,
the   Supreme   Court   in   the   case   of   Balanon­Anicete   vs.
Balano, 402 SCRA 514 held: 'xxx persons who occupy the
land   of   another   at   the   latter's   tolerance   or   permission
without any contract between them [are] necessarily bound
by an implied promise that they will vacate the same upon
demand, failing in which a summary action for ejectment is
the   proper   remedy   against   them.'   Hence,   upon   demand,
plaintiff is entitled to collect reasonable compensation for
the   actual   occupation   of   the   subject   property   which   is
P2,000.00   per   month   and   the   payment   of   attorney's   fees.
Since no evidence was presented relative to damages, the
Court cannot award the same.
WHEREFORE,   premises   considered,   judgment   is   hereby
rendered as follows:
1. Ordering the defendants and all persons claiming rights
under them to vacate the subject property known as No. 127
F.   Sevilla   St.,   San   Juan,   Metro   Manila   and   to   surrender
peaceful possession thereof to the plaintiff in this case;
2. Ordering the defendants to pay plaintiff the amount of
P2,000.00 per month for the actual use and occupation of
the   subject   property   reckoned   from   date   of   extrajudicial
demand   which   is   August   7,   2006,   until   defendants   shall
have finally vacated the premises;
3. Ordering the defendants to pay plaintiff the amount of
P10,000.00 as and by way of attorney's fees; and
4. The costs of suit.
SO ORDERED.
Ruling of the Regional Trial Court
In an appeal before the  RTC docketed as SCA Case  No. 3144,
petitioners and their co­defendants argued that the MeTC erred in
not resolving the issue of ownership, in ordering them to vacate the
premises, in deciding issues which were not framed by the parties,
and in not granting them damages and awarding the same instead With costs against the appellant.
to respondent.
SO ORDERED.
On April, 29, 2009, the RTC rendered its Decision, 15 pronouncing
as follows: On motion for reconsideration, however, the RTC reversed itself.
Thus, in a December 11, 2009 Order,17 it held that ­
Stripped of its non­essentials, the appeal primarily hinges on
the   lower   court's   failure   to   rule   upon   the   issue   on   the 2. This Court's Findings
validity of Transfer Certificate of Title No. 12575 of the lot,
subject   of   the   ejectment   suit.
At   the   outset,   it   should   be   mentioned   that   the   court a
quo should have dismissed the complaint outright for failure
Upon a judicious consideration of the arguments raised by
to   comply   with   a   condition   precedent   under   Section   10,
the   parties   in   their   respective   memorandum   vis­a­vis   the
Rule 16 of the Rules of Civil Procedure, the parties being
decision of the court a quo, this court opines and so holds
siblings and there being no allegations in the complaint as
that the said court did not err in its findings. The validity of
regards efforts at compromise having been exerted, a matter
a   transfer   certificate   of   title   cannot   be   raised   in   the   said
that   was   raised   in   the   answer   of   defendants   Consolation
ejectment suit as it partakes of a collateral attack against the
Romero and Rosario D. Domingo.
said   title.   This   is   not   allowed   under   the   principle   of
indefeasibility of a Torrens title. The issue on the validity of
title i.e., whether or not it was fraudulently issued, can only 2.1. The Issue of MeTC Jurisdiction
be raised in an action expressly instituted for that purpose.
The court a quo is correct in ruling that it has jurisdiction
The ruling of the Supreme Court in the case of Raymundo over   this   case,   the   allegations   in   the   complaint   being   so
and Perla De Guzman vs. Praxides J. Agbagala, G.R. No. phrased as to present one apparently for unlawful detainer.
163566, February 19, 2008 is revelatory, thus: It did not matter that after answers were filed and further
proceedings   were   had,   what   emerged   were   issues   of
ownership and possession being intricately interwoven, the
'Indeed,   a   decree   of   registration   or   patent   and   the
court   being   clothed   with   jurisdiction   to   provisionally
certificate   of   title   issued   pursuant   thereto   may   be
adjudicate   the   issue   of   ownership,   it   being   necessary   in
attacked on the ground of falsification or fraud within
resolving the question of possession.
one year from the date of their issuance. Such an attack
must be direct and not by a collateral proceeding. The
rationale is this: 2.2.   The   Issue   of   Whether   or   Not   Plaintiff   Can   Eject
Defendants
xxx [The] public should be able to rely on the registered
In Barnachea vs. Court of Appeals, et al., it was held that
title. The Torrens System was adopted in this country
one   of   the   features   of   an   unlawful   detainer   case   is
because   it   was   believed   to   be   the   most   effective
possession of property by defendant being at the start legal,
measure to guarantee the integrity of land titles and to
becoming  illegal by reason of  the  termination  of  right  to
protect their indefeasibility once the claim of ownership
possess   based   on   his   contract   or   other   arrangement   with
is established and recognized.
plaintiff.
For reasons aforestated, the appeal is hereby DENIED.
hi   this   case,   the   legal   possession   of   subject   premises   by
defendants­appellants,   they   being   the   heirs   of   original
WHEREFORE,   premises   considered,   judgment   is   hereby owners   Macario   and   Felicidad   Domingo,   has   not   ceased.
rendered affirming in toto in [sic] the decision of the lower The basis for the claimed ownership by plaintiff­appellee is
court dated September 17, 2007. a deed of absolute sale dated 06 June 2006 (Exhibit "2")
165
showing   the   signatures   of   vendor   Sps.   Domingo   whose
respective death certificates indicate that Macario died on
22 February 1981 and Felicidad on 14 September 1997. It is
clear that the deed of sale became the basis for the transfer
of subject property in plaintiff­appellee's name under TCT
No.   12575   (Exhibit   "A"),   a   fact   that   prompted   herein
defendants­appellants to file a complaint for annulment of
sale and reconveyance of ownership, docketed as Civil Case
No. 70898­SJ earlier than this subject case.
It   appearing   that   defendants­appellants'   occupancy   of
subject property  is  premised  on their  right  thereto  as  co­
owners, being compulsory heirs of their parents, and it not
being established that they had alienated such right in favor
of   their   sister,   herein   plaintiff­appellee,   the   latter   cannot
eject them therefrom.
2.3. The Issue of Whether or Not Defendants are Entitled to
Damages
While defendants Rafael and Ramon Domingo allege and
pray for  actual and moral damages and attorney's fees in
their answer and all [the] defendants do so in their position
paper, the court can award only the last, it being established
that they were compelled to litigate to protect their right,
and such award being just and equitable. As for actual and
moral   damages,   there   is   no   sufficient   basis   for   a   grant
thereof. It is noted that not a single affidavit of any of the
four   defendants   is   attached   to   their   position   paper,   as
required   under   Section   10,   Rule   70,   Rules   of   Civil
Procedure,   and   Section   9,   Revised   Rule   on   Summary
Procedure.
WHEREFORE, the foregoing considered, the court hereby
grants   the   motion   for   reconsideration   of   its   decision   on
appeal   affirming   in   toto   the   decision   of   the   Metropolitan
Trial   Court,   Branch   58,   San   Juan   City.   Consequently,   it
hereby   reverses   said   decision   by   decreeing   that   plaintiff­
appellee has no cause of action against herein defendants­
appellants   who   are   entitled   to   possession   of   the   subject
premises,  rendering  the   complaint   dismissible   and  hereby
dismisses   it.   Corrolarily,   plaintiff­appellee's   motion   for
execution   is   hereby   denied.   Plaintiff­appellee   is   hereby
ordered   to   pay   defendants­appellants   P8,000.00   each   in
attorney's fees. Costs against plaintiff­appellee.
SO ORDERED.18
Respondent filed a Motion for Reconsideration,  which the
19
RTC denied in a subsequent Order 20 dated May 17, 2010.
The trial court held:
In   essence,   plaintiff   argues   that   possession   and   not
ownership   should   have   been   the   central   issue   in   this
appealed ejectment suit. As the subject property is titled in
plaintiffs   name,   necessarily,   she   has   better   right   of
possession   than   defendants.
The court is not persuaded. Germane is Section 16, Rule 70
of the 1997 Rules of Civil Procedure, to wit:
Section   16.  Resolving   defense   of   ownership.   ­   When   the
defendant raises the defense of ownership in his pleadings
and the question of possession cannot be resolved without
deciding the issue of ownership, the issue of ownership shall
be resolved only to determine the issue of possession.
Having   determined   the   ownership   issue   in   resolving
defendants' right of possession pursuant to the aforestated
rule, the court hereby finds no cogent reason or sufficient
justification   to   reconsider   its   previous   ruling   dated   11
December   2009.
WHEREFORE,   the   motion   for   reconsideration   is   hereby
DENIED for lack of merit.
SO ORDERED.
Ruling of the Court of Appeals
Respondent filed a Petition for Review 22 with the CA, docketed as
CA­G.R. SP No. 114363. On February 29, 2012, the CA rendered
judgment, as follows:
Petitioner seeks to reverse and set aside the assailed Orders since
the RTC allegedly erred:
'I.
166
IN RULING THAT THE RESPONDENTS CANNOT
BE   EJECTED   FROM   THE   SUBJECT   PREMISES,
THEIR   OCCUPANCY   BEING   PREMISED   ON
THEIR   RIGHT   AS   CO­OWNERS,   BEING
COMPULSORY   HEIRS   OF   THEIR   [PETITIONER]
PARENTS   AND   IT   NOT   BEING   ESTABLISHED
THAT THEY HAD ALIENATED SUCH RIGHT IN
FAVOR OF THE PETITIONER.
II.
IN   RULING   THAT   THE   RESPONDENTS   ARE
ENTITLED   TO   THE   AWARD   OF   ATTORNEY'S
FEES.'
This Court's Ruling
Contending   that   the   RTC   erred   when   it   held   that
respondents cannot be ejected from the subject lot because
they   are   co­owners   thereof   and   heirs   of   their   deceased
parents, petitioner points out that the only issue that should
be   tackled   in   an   unlawful  detainer   case   is   the   right  of   a
plaintiff to possession de facto over the property in question.
For their part, respondents argue that they have legal and
actual possession of the subject lot as they are the heirs of
their deceased parents who are the registered owners of said
subject lot. On the other hand, the title to the subject lot that
was registered under petitioner's name is null and void for it
was   issued   based   on   a   forged   deed   of   absolute   sale.
The petition has merit.
In an unlawful detainer case, the defendant's possession of a
property   becomes   illegal   when   he   is   demanded   by   the
plaintiff   to   vacate   therefrom   due   to   the   expiration   or
termination   of   his   right   to   possess   the   same   under   the
contract   but   the   defendant   refuses   to   heed   such   demand.
Thus,   the   sole   issue   to   be   resolved   is   who   between   the
parties   have   [sic]   a   right   to   the   physical   or   material
possession of the property involved, independently of any
claim of ownership by any of the parties.
 However, where the issue of ownership is raised by any of
the parties, the rule in Sec. 16, Rule 70 of the Revised Rules
of Court is explicit:
Section 16. Resolving defense of ownership. ­ When the defendant
raises the defense of ownership in his pleadings and the question of
possession   cannot   be   resolved   without   deciding   the   issue   of
ownership,   the   issue   of   ownership   shall   be   resolved   only   to
determine the issue of possession.
In other words, while only possession de facto is the issue to be
determined in an ejectment case, the issue of ownership may be
tackled if raised by any of the parties and only for the purpose of
reaching   a   conclusion   on   the   issue   of   possession.   Thus,
in Esmaquel vs. Coprada, the Supreme Court had the occasion to
once again hold that:
'The   sole   issue   for   resolution   in   an   unlawful   detainer   case   is
physical   or   material   possession   of   the   property   involved,
independent   of   any   claim   of   ownership   by   any   of   the
parties. Where   the   issue   of   ownership   is   raised   by   any   of   the
parties, the courts may pass upon the same in order to determine
who   has   the   right   to   possess   the   property.   The   adjudication   is,
however, merely provisional and would not bar or prejudice  an
action   between   the   same   parties   involving   title   to   the
property. Since the issue of ownership was raised in the unlawful
detainer  case,  its  resolution  boils  down to  which of  the   parties'
respective evidence deserves more weight.'
June 6, 2006 for a consideration of Php1,000.000.00. Clearly, the In a July 10, 2013 Resolution, 24 this Court resolved to give due
certificate of title of the deceased parents was effectively cancelled course to the Petition. 
in favor of petitioner. Hence, petitioner has a better right to the
possession de   facto of   the   subject   lot   for,   as   held   in Asuncion Issues
Urieta Vda. de Aguilar vs. Alfaro, 'the titleholder is entitled to all
the attributes of ownership of the property, including possession.'
Petitioners raise the following issues for resolution:
Respondents' insistence that the Torrens Certificate of petitioner
should not be given any probative weight because it is null and A
void is of no moment. The validity of a certificate of title cannot be
collaterally   attacked.   Rather,   the   attack   should   be   made   in   an THE COURT OF APPEALS (TWELFTH DIVISION) 
action   instituted   mainly   for   that   purpose,   x   x   x OBVIOUSLY ERRED IN FAILING TO DISMISS THE 
COMPLAINT (ANNEX H) BECAUSE IT DID NOT COMPLY 
xxxx WITH THE JURISDICTIONAL ELEMENT REQUIRED BY 
LAW (SEC. 3, RULE 8, REVISED RULE OF COURT).
In short, a Torrens Certificate is evidence of the indefeasibility of
the title to the property and the person whose name appears therein
B
is entitled to the possession of the property unless and until his title
is nullified. The reason being that the Torrens System was adopted
THE DECISION GRAVELY ERRED IN NOT HAVING RULED
as it is the most effective measure that will guarantee the integrity
of  land  titles  and  protect their   indefeasibility  once  the   claim  of THAT   RESPONDENT'S   CAUSE   OF   ACTION   IN   HER
EJECTMENT COMPLAINT (ANNEX H) IS INDISPENSABLY
ownership is established and recognized. Hence, the age­old rule
that 'the person who has a Torrens Title over a land is entitled to INTERTWINED WITH THE ISSUE OF OWNERSHIP RAISED
BY   PETITIONERS'   DEFENSE,   THUS   RENDERING   SAID
possession thereof.'
COMPLAINT NOT AN UNLAWFUL DETAINER CASE OVER
WHICH   THE   MeTC   HAS   JURISDICTION,  AS   DECIDED   IN
Unless there is already a judgment declaring petitioner's certificate
THE ORDER DATED DECEMBER 9, 2009 (ANNEX X).
of   title   as   null   and   void,   the   presumption   of   its   validity   must
prevail, x x x
C

In the case  at bar, both petitioner  and respondents are claiming
ownership   over   the   subject   lot.   On   the   part   of   petitioner,   she
maintains   that  she   has   a   right   to   possession   because   she   is   the
registered owner thereof, as evidenced by TCT No. 12575­R which
was issued in her name in 2006. On the other hand, respondents
maintain that they cannot be ejected from the subject lot because
they   are   the   compulsory   heirs   of   their   deceased   parents   under
whose names the subject lot was registered, as shown in TCT No.
845­R.
As between the two parties, this Court rules in favor of petitioner
for she holds a more recently­issued certificate of title, i.e., 2006,
than that of their deceased parents whose certificate of title was
issued in 1953. The issuance of the certificate of title in 2006 may
be   traced  from  TCT   No.  845­R   wherein  at  the   last  page   of   its
Memorandum   of   [E]ncumbrances   is   an   entry   which   explicitly
states that the title was transferred to the name of petitioner on
xxxx
All said, petitioner's right to possession over the subject lot must
be respected in view of the certificate of title thereto issued in her
name.
WHEREFORE, the petition is GRANTED. The assailed Orders of
the Regional Trial Court, Pasig City, Branch 160 are REVERSED
and   SET   ASIDE.   Its Decision dated   April   29,   2009   affirming
the Decision dated September 17, 2007 of the Metropolitan Trial
Court, San Juan City, Branch 58 is REINSTATED.
SO ORDERED.
Hence, the instant Petition.
167
THE DECISION IS SERIOUSLY MISTAKEN IN NOT HAVING
UPHELD THE AWARD OF DAMAGES BY JUDGE MYRNA
Y.   LM­VERANO   IN   FAVOR   OF   DEFENDANTS   AND
AGAINST RESPONDENT WHO OBVIOUSLY OBAINED HER
TITLE   (ANNEX   F)   USING   AN   UNDISPUTABLY
FRAUDULENT DEED OF ABSOLUTE SALE (ANNEX G).
D
THE   DECISION   INCORRECTLY   RULED   THAT
PETITIONERS   IN   RAISING   OWNERSHIP   AS   THEIR
DEFENSE   (SEC.   16   IN   RELATION   TO   SEC.   18,   RULE   70,
REVISED   RULES   OF   COURT)   CONSTITUTE   A
COLLATERAL ATTACK ON THE TITLE OF RESPONDENT
OBVIOUSLY   AND   UNDENIABLY   PROCURED   THRU
FRAUD.
 Petitioners' Arguments
In their Petition and Reply26 seeking reversal of the assailed CA
dispositions and reinstatement of the RTC's December 11, 2009
Order   dismissing   respondent's   ejectment   case,   petitioners
essentially argue that since the parties to the case are siblings and
no attempt at compromise was made by the respondent prior to the
filing   of   Civil   Case   No.   9534,   then   it   should   be   dismissed   for
failure to comply with Rule 16, Section 1(j) of the 1997 Rules of
Civil   Procedure27 in   relation   to   Article   151   of   the   Family
Code28 and Article 222 of the Civil Code; 29 that they could not be
evicted from the subject property since they are co­owners of the
same,   having   inherited   it   from   their   deceased   parents;   that
respondent's title was derived from a forged deed of sale, which
does not make her the sole owner of the subject property; that as
co­owners and since respondent's title is void, they have a right of
possession over the subject property and they may not be evicted
therefrom;   that   their   defense   that   respondent   obtained   her   title
through a forged deed of sale does not constitute a collateral attack
on such title, but is allowed in order to prove their legal right of
possession and ownership over the subject property.
Respondent's Arguments
In her Comment  seeking denial of the Petition, respondent claims
30
that the Petition should have been dismissed since only two of the
respondents in CA­G.R. SP No. 114363 filed the Petition before
this Court; that the findings of the CA do not merit review and
modification,   the   same   being   correct;   and   that  the   Petition   is   a
mere   reiteration   of   issues   and   arguments   already   passed   upon
exhaustively below.
Our Ruling
The Court grants the Petition.
The procedural issue of lack of attempts at compromise should be
resolved in respondent's favor. True, no suit between members of
the  same  family  shall  prosper  unless  it   should  appear  from  the
verified   complaint   or   petition   that   earnest   efforts   toward   a
compromise have been made. However, the failure of a party to
comply with this condition precedent is not a jurisdictional defect.
If   the   opposing   party   fails   to   raise   such   defect   in   a   motion   to
dismiss, such defect is deemed waived.
hi arriving at its pronouncement, the CA passed upon the issue or
claim of ownership, which both parties raised. While the procedure
taken is allowed ­under Section 16, Rule 70 of the 1997 Rules of
Civil Procedure,32 the issue of ownership may be resolved only to
determine the issue of possession ­ the CA nonetheless committed
serious   and   patent   error   in   concluding   that   based   solely   on
respondent's   TCT   12575   issued   in   her   name,   she   must   be
considered   the   singular   owner   of   the   subject   property   and   thus
entitled to possession thereof­ pursuant to the principle that "the
person who has a Torrens Title over a land is entitled to possession
thereof."33 Such   provisional   determination   of   ownership   should
have been resolved in petitioners' favor.
When   the   deed   of   sale   in   favor   of   respondent   was   purportedly
executed by the parties thereto and notarized on June 6, 2006, it is
perfectly   obvious   that   the   signatures   of   the   vendors   therein,
Macario and Felicidad, were forged. They could not have signed
the same, because both were by then long deceased: Macario died
on February 22, 1981, while Felicidad passed away on September
14, 1997. This makes the June 6, 2006 deed of sale null and void;
being so, it is "equivalent to nothing; it produces no civil effect;
and it does not create, modify or extinguish a juridical relation." 34
And while it is true that respondent has in her favor a Torrens title
over the subject property, she nonetheless acquired no right or title
in  her   favor  by  virtue   of   the  null  and void  June   6, 2006  deed.
"Verily,   when   the   instrument   presented   is   forged,   even   if
accompanied   by   the   owner's   duplicate   certificate   of   title,   the
registered owner does not thereby lose his title, and neither does
the assignee in the forged deed acquire any right or title to the
property."35
In sum, the fact that respondent has in her favor a certificate of title
is of no moment; her title cannot be used to validate the forgery or
cure the void sale. As has been held in the past:
Insofar as a person who fraudulently obtained a property is
concerned,   the   registration   of   the   property   in   said   person's
name would not be sufficient to vest in him or her the title to
the property. A certificate of title merely confirms or records
title   already   existing   and   vested.   The   indefeasibility   of   the
Torrens title should not be used as a means to perpetrate fraud
against   the   rightful   owner   of   real   property. Good   faith   must
concur with registration because, otherwise, registration would be
an exercise in futility. A Torrens title does not furnish a shield
for   fraud,   notwithstanding   the   long­standing   rule   that
168
registration is a constructive notice of title binding upon the
whole world. The legal principle is that if the registration of the
land is fraudulent, the person in whose name the land is registered
holds it as a mere trustee.36 (Emphasis supplied)
Since respondent acquired no right over the subject property, the
same   remained   in   the   name   of   the   original   registered   owners,
Macario and Felicidad. Being heirs of the owners, petitioners and
respondent thus became, and remain co­owners ­ by succession ­
of   the   subject   property.   As   such,   petitioners   may   exercise   all
attributes   of   ownership   over   the   same,   including   possession   ­
whether de facto or dejure; respondent thus has no right to exclude
them   from   this   right   through   an   action   for   ejectment.
With the Court's determination that respondent's title is null and
void,   the   matter   of   direct   or   collateral   attack   is   a   foregone
conclusion as well. "An action to declare the nullity of a void title
does   not   prescribe   and   is   susceptible   to   direct,   as   well   as   to
collateral,   attack;"37 petitioners   were   not   precluded   from
questioning the validity of respondent's title in the ejectment case.
It  does  not  appear  either   that petitioners  are  claiming  exclusive
ownership   or   possession   of   the   subject   property.   Quite   the
contrary, they acknowledge all this time that the property belongs
to all the Domingo siblings in co­ownership. In the absence of an
allegation ­ or evidence ­ that petitioners are claiming exclusive
ownership   over   the   co­owned   property,   respondent   has   no
alternative cause of action for ejectment which should prevent the
dismissal   of   Civil   Case   No.   9534.   The   pronouncement   in   a
previous case applies here:
True it is that under Article 487 of the Civil Code, 38 a co­owner
may bring an action for ejectment against a co­owner 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 sari­sari
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.39cralawlawlibrary
Indeed, it is respondent who is claiming exclusive ownership of the
subject property owned in common.
Thus, left with no cause of action for ejectment against petitioners,
respondent's ejectment case must be dismissed.

There is likewise no merit to respondent's argument that since only
two   of   the   defendants   in   the   ejectment   case   filed   the   instant
Petition, the same must necessarily be dismissed. There is no rule
which requires that all the parties in the proceedings before the CA
must jointly take recourse with this Court or else such recourse
would be dismissible. The fact that Ramon and Rafael did not join
in the instant Petition does not bar petitioners from pursuing their
case   before  this   Court.  Moreover,  since   petitioners,   Ramon   and
Rafael   are   siblings,   co­heirs,   co­owners,   and   occupants   of   the
subject property, they all have common interests, and their rights
and liabilities are identical and so interwoven and dependent as to
be inseparable. The reversal of the assailed CA judgment should
therefore inure to the benefit of Ramon and Rafael as well. The
December 11, 2009 Order of the RTC — decreeing dismissal as
against petitioners, Ramon, and Rafael, as well as the payment of
attorney's fees to all of them ­ may be reinstated in all respects.

xxx   This   Court   has   always   recognized   the   general   rule   that   in
appellate proceedings, the reversal of the judgment on appeal is
binding only on the parties in the appealed case and does not affect
or inure to the benefit of those who did not join or were not made
parties  to  the  appeal. An  exception  to  the  rule   exists,  however,
where  a  judgment  cannot  be   reversed as to  the  party  appealing
without affecting the rights of his co­debtor, or where the rights
and liabilities of the parties are so interwoven and dependent on
each other as to be inseparable, in which case a reversal as to one
operates as a reversal as to all. This exception, which is based on a
communality   of   interest   of   said   parties,   is   recognized   in   this
jurisdiction. x x x40cralawlawlibrary

WHEREFORE,   the   Petition   is GRANTED.   The   February   29,

2012 Decision of the Court of Appeals in CA­G.R. SP No. 114363
is REVERSED and SET ASIDE. The December 11, 2009 Order
of the Regional Trial Court of Pasig City, Branch 160 in SCA No.
3144 is REINSTATED and AFFIRMED.

SO ORDERED.

Carpio, (Chairperson), Brion, Mendoza, and Leonen, JJ., concur.

169
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 217744 JULY 30, 2018
JOSE Z. MORENO, Petitioner
vs.
RENE M. KAHN, CONSUELO MORENO KAHN­HAIRE,  the earlier partial payment as rental payments instead. In response,
RENE LUIS PIERRE KAHN, PHILIPPE KAHN, MA.  Jose expressed his disapproval to Consuelo's plan and demanded
CLAUDINE KAHN MCMAHON, and THE REGISTER OF  that   respondents   proceed   with   the   sale,   which   the   latter
DEEDS OF MUNTINLUPA CITY, Respondents
D E C I S I O N
PERLAS­BERNABE, J.:
Assailed   in   this   petition   for   review   on certiorari1are   the
Decision2 dated   September   24,   2014   and   the   Resolution 3 dated
March 17, 2015 of the Court of Appeals (CA) in CA­G.R. SP No.
129232, which affirmed the Orders dated January 18, 2012 4 and
October 11, 20125 of the Regional Trial Court of Muntinlupa City,
Branch   205   (RTC)   in   Civil   Case   No.   12­004   dismissing motu
proprio the complaint filed by petitioner Jose Z. Moreno (Jose) for
non­compliance with Article 151 of the Family Code.
The Facts
Jose alleged that since May 1998 and in their capacity as lessees,
he and his family have been occupying two (2)  parcels of  land
covered by Transfer Certificate of Title (TCT) Nos. 181516 and
1815176 (subject   lands)   co­owned   by   his   full­blooded   sister,
respondent   Consuelo   Moreno   KahnHaire   (Consuelo)   and   his
nephews and nieces (Consuelo's children), respondents Rene M.
Kahn   (Rene),   Rene   Luis   Pierre   Kahn   (Luis),   Philippe   Kahn
(Philippe),   and   Ma.   Claudine   Kahn­McMahon   (Claudine;
collectively, respondents).7
Around  April   or   May   2003,  through   numerous   electronic   mails
(emails) and letters, respondents offered to sell to Jose the subject
lands for  the  amount of  US$200,000.00 (US$ 120,000.00 to be
received by Consuelo and US$20,000.00 each to be received by
her children), 8 which Jose accepted. Notably, the agreement was
made verbally and was not immediately reduced into writing, but
the parties had the intention to eventually memorialize the same
via a written document. Over the next few years, Jose made partial
payments to respondents by paying off the shares of Rene; Luis,
Philippe,   and   Claudine,   leaving   a   remaining   balance   of
US$120,000.00 payable to Consuelo.9
However,   in   July   2010,   Consuelo   decided   to   "cancel"   their
agreement, and thereafter, informed Jose of her intent to convert
ignored. 10 He   then   claimed   that   on   July   26,   2011,   without   his
consent, Consuelo, Luis, Philippe, and Claudine sold 11 their shares
over   the   subject   lands   to   Rene,   thereby   consolidating   full
ownership of the subject lands to him. Consequently, TCT Nos.
181516 and 181517,were cancelled and new TCTs, i.e., TCT Nos.
148026 and 148027,12 were issued in Rene's name. Upon learning
of such sale, Jose sent a demand letter 13 to Rene, and later on to
Consuelo, Luis, Philippe, and Claudine, 14 asserting his right to the
subject lands under the previous sale agreed upon. As his demands
went unheeded, Jose brought the matter to the barangay upon for
conciliation   proceedings   between   him   and   Rene   only,   since
Consuelo. Luis, Philippe, and Claudine are all living abroad. As no
settlement   was   agreed   upon,15 Jose   was   constrained   to   file   the
subject   complaint16 for   specific   performance   and   cancellation   of
titles with damages and application for temporary restraining order
and writ of preliminary injunction, docketed as Civil Case No. 12­
004. 17
The RTC Proceedings
In   an   Order18 dated   January   18,   2012,   the
RTC motuproprio ordered   the   dismissal   of   Jose's   complaint   for
failure to allege compliance with the provision of Article 151 of
the Family Code which requires earnest efforts to be made first
before suits may be filed between family members.
Jose   moved   for   reconsideration,   arguing   that: (a) the   RTC
19
cannot motu proprio order the dismissal of a case on the ground of
failure to comply with a condition precedent, i.e., non­compliance
with   Article   151   of   the   Family   Code; (b) Article   151   does   not
apply to the instant case, contending that while Consuelo is indeed
his   full­blooded   sister,   her   co­defendants,   namely   his   nephews
170
Rene, Luis, and Philippe, and niece Claudine are not considered
members   of   the   same   family   as   him   and   Consuelo:   and   (c)
assuming Article 151 of the Family Code applies, he has complied
with   the   earnest   efforts   requirement   as   he   tried   convincing
Consuelo to change her mind through email correspondences, and
even underwent barangay conciliation proceedings with Rene.20
In   an   Order21 dated   October   11,   2012,   the   RTC   denied   Jose's
motion,   ruling, inter   alia, that   Article   151   of   the   Family   Code
applies,   despite   the   fact'   that   Consuelo   had   other   co­
defendants (i.e., her children) in the suit, as the dispute, which led
to   the   filing   of   the   case,   was   mainly   due   to   the   disagreement
between full­blooded siblings, Jose and Consuelo.22
Aggrieved, Jose filed a petition for certiorari23 before the CA.
The CA Ruling
In   a   decision24 dated   September   24,   2014,   the   CA   affirmed   the
RTC   ruling.   It,   held   that   the motu   proprio dismissal   of   Jose's
complaint was proper in light of Article 151 of the Family Code
which   mandates   such   dismissal   if   it   appears∙   from   the
complaint/petition   that   no   earnest   efforts   were   made   between
party­litigants   who   are   members   of   the   same   family. 25 The   CA
likewise agreed with the RTC's finding that Jose's main cause of
action was against his full­blooded sister, Consuelo, and as such,
the   fact   that   his   nephews   and   nieces   were   impleaded   as   co­
defendants does not take their situation beyond the ambit of Article
151.26 Finally,   the   CA   opined   that   the   barangay   conciliation
proceedings cannot be deemed as substantial compliance with the
earnest efforts requirement of the law as the participants therein
were only Jose and Rene, and without the other defendants.27
Undaunted,   Jose   moved   for   reconsideration, 28 which   was,
however, denied in a Resolution29 dated March I 7, 2015; hence,
this petition.
The Issues Before the Court
The issues for the Court's resolution are whether or not: (a) the CA
correctly   affirmed   the   RTC's motu   proprio dismissal   of   Jose's
complaint; and (b) Article 151 of the Family Code is applicable to
this case.
 The Court's Ruling
The petition is meritorious.
Article 151 of the Family Code reads:
Article 151. No suit between members of the same family shall
prosper   unless   it   should   appear   from   the   verified   complaint   or
petition that earnest efforts toward a compromise have been made,
but that the same have failed. If it is shown that no such efforts
were in fact made, the case must be dismissed.
This rule shall not apply to cases which may not be the subject of
compromise under the Civil Code
Palpably, the wisdom behind the provision is to maintain sacred
the ties among members of the same family. "As pointed out by the
Code   Commission,  it  is difficult  to  imagine   a  sadder  and more
tragic  spectacle   than  a   litigation   between  members   of  the   same
family. It is necessary that every effort should be made toward a
compromise before a litigation is allowed to breed hate and passion
in the family and it is known that a lawsuit between close relatives
generates   deeper   bitterness   than   between   strangers." 30 Thus,   a
party's   failure   to   comply   with   this   provision   before   filing   a
complaint against a family member would render such complaint
premature;31 hence, dismissible.
This   notwithstanding,   the   Court   held   in Heirs   of   Favis,   Sr.   v.
Gonzales32 that non­compliance with the earnest effort requirement
under Article 151 of the Family Code is not a jurisdictional defect
which   would   authorize   the   courts   to   dismiss   suits   filed   before
them motu   proprio. Rather,   it   merely   partakes   of   a   condition
precedent   such   that   the   non­compliance   therewith   constitutes   a
ground for dismissal of a suit should the same be invoked by the
opposing party at the earliest opportunity, as in a motion to dismiss
or in the answer. Otherwise, such ground is deemed waived, viz.:
The base issue is whether or not the appellate court may dismiss
the order of dismissal of the complaint for failure to allege therein
that earnest efforts towards a compromise have been made.
The appellate court committed egregious error in dismissing
the complaint. The appellate  courts' decision hinged on Article
151 of the Family Code x x x.
x x x x
The appellate court correlated this provision with Section 1, par.
(j), Rule 16 of the 1997 Rules of Civil Procedure, which provides:
Section   1. Grounds. ­   Within   the   time   for   but   before   filing   the
answer to the complaint or pleading asserting a claim, a motion to
dismiss may be made on any of the following grounds:
x x x x
(j) That a condition precedent for filing the claim has not been
complied with.
The appellate court's reliance on this provision is misplaced. Rule
16 treats of the grounds for a motion to dismiss the complaint. It
must be distinguished from the grounds provided under Section 1,
Rule 9 which specifically deals with dismissal of the claim by the
court motu proprio. Section 1, Rule 9 of the 1997 Rules of Civil
Procedure provides:
Section   1. Defenses   and   objections   not   pleaded. ­   Defenses   and
objections   not   pleaded   either   in   a   motion   to   dismiss   or   in   the
answer arc deemed waived. However, when it appears from the
pleadings   or   the   evidence   on   record   that   the   court   has   no
jurisdiction   over   the   subject  matter,  that   there   is  another   action
pending between the same parties for the same cause, or that the
action is barred by a prior judgment or by statute of limitations, the
Court shall dismiss the claim.
Section 1, Rule 9 provides for only four instances when the court
may motu   proprio dismiss   the   claim,   namely:   (a)   lack   of
jurisdiction   over   the   subject   matter;   (b) litis
pendentia; (c) resjudicata; and (d) prescription of action. x x x.
x x x x
Why   the   objection   or   failure   to   allege   a   failed   attempt   at   a
compromise   in   a   suit   among   members   of   the   same   family   is
waivable was earlier explained in the case of Versoza v. Versoza
([Versoza] 135   Phil.   84,   94   [1986]),   a   case   for   future   support
which was dismissed by the trial court upon the ground that there
was no such allegation of infringement of Article 222 of the Civil
Code. the  origin of  Article  151 of  the  Family Code. While  the
Court   ruled   that   a   complaint   for   future   support   cannot   be   the
171
subject of a compromise and as such the absence of the required
allegation   in   the   complaint   cannot   be   a   ground   for   objection
against the suit, the decision went on to state thus:
x x x x
Thus   was   it   made   clear   that   a   failure   to   allege   earnest   hut
failed efforts at a compromise in a complaint among members
of the same family, is not a jurisdictional defect but merely a
defect in the statement of a cause of action. Versoza was cited in
a later case as an instance analogous to one where the conciliation
process at the hamnguy level was not priorly resorted to. Both were
described as a "condition precedent for the filing of a complaint
in Court." In such instances, the consequence is precisely what is
stated in the present Rule. Thus:
The   defect   may   however   he   waived   by   failing   to   make
seasonable   objection,   in   a   motion   to   dismiss   or   answer,   the
defect being a mere procedural imperfection which docs not
affect the jurisdiction of the court.
In the case at hand, the proceedings before the trial court ran the
full   course.   The   complaint   of   petitioners   was   answered   by
respondents without a prior motion to dismiss having been filed.
The   decision   in   favor   of   the   petitioners   was   appealed   by
respondents on the basis or the alleged error in the ruling on the
merits,   no   mention   having   been   made   about   any   defect   in   the
statement   or   a   cause   or   action. In   other   words,   no   motion   to
dismiss the complaint based on the failure to comply with a
condition precedent  was filed in the  trial court; neither  was
such failure assigned as error in the appeal that respondent
brought before the Court of Appeals.
Therefore, the rule on deemed waiver of the non­jurisdictional
defense or objection is wholly applicable to respondent. If the
respondents as parties­defendants could not, and did not, after
filing   their   answer­to­petitioner’s   complainant,   invoke   the
objection   of   absence   of   the   required   allegation   on   earnest
efforts   at   a   compromise,   the   appellate   court   unquestionably
 did not have any authority or basis to    motu propio   order the
dismissal   of   petitioner’s   complaint .33 (Emphases   and
underscoring supplied)
In this case, a plain reading of the records shows that the RTC
ordered the dismissal of Jose's complaint against respondents for
his alleged failure to comply with Article 151 of the Family Code ­
even   before   respondents   have   filed   a   motion   or   a   responsive
pleading invoking such non­compliance. As such ground is not a
jurisdictional defect but is a mere condition precedent, the courts a
quo clearly   erred   in   finding   that   a motu   proprio dismissal   was
warranted under the given circumstances.
Even assuming arguendo that respondents invoked the foregoing
ground   at   the   earliest   opportunity,   the   Court   nevertheless   finds
Article   151   of   the   Family   Code   inapplicable   to   this   case.   For
Article   151   of   the   Family   Code   to   apply,   the   suit   must   be
exclusively   between   or   among   "members   of   the   same   family."
Once a stranger becomes a party to such suit, the earnest effort
requirement is no longer a condition precedent before the action
can   prosper. 34 In Hiyas   Savings   and   Loan   Bank,   Inc.   v.
Acuna, 35 the Court explained the rationale behind this rule, to wit:
[T]hese considerations do not, however, weigh enough to make it
imperative   that   such   efforts   to   compromise   should   be   a
jurisdictional   prerequisite   for   the   maintenance   of   an   action
whenever a stranger to the family is a party thereto. whether as a
necessary or indispensable one. It is not always that one who is
alien to the family would be willing to suffer the inconvenience of,
much less relish, the delay and the complications that wranglings
between or among relatives more often than not entail. Besides, it
is neither practical nor fair that the determination of the rights of a
stranger   to   the   family   who   just   happened   to   have   innocently
acquired some kind of interest in any right or property disputed
among its members should be made to depend on the way the latter
would settle their differences among themselves. 36
In this relation, Article 150 of the Family Code reads:
Art. l 50. Family relations include those:
(1) Between husband and wife;
(2) Between parents and children;
(3) Among other ascendants and descendants: and
(4) Among brothers and sisters. whether of the full or
half­blood.
In this light, case law states that Article 151 of the Family Code
must   be  construed  strictly,   it  being  an  exception  to   the  general
rule.1âwphi1 Hence,   any   person   having   a   collateral   familial
relation with the plaintiff other than what is enumerated in Article
150 of the Family Code is considered a stranger who, if included in
a   suit   between   and   among   family   members,   would   render
unnecessary   the   earnest   efforts   requirement   under   Article
151.37 Expressio unius est exclusio alterius. The express mention
of one person, thing, act, or consequence excludes all others. 38
In this instance, it is undisputed that: (a) Jose and Consuelo are
full­blooded   siblings;   and   (b)   Consuelo   is   the   mother   of   Rene,
Luis, Philippe, and Claudine, which make them nephews and niece
of their uncle, Jose. It then fi1llows that Rene, Luis, Philippe, and
Claudine are considered ''strangers'' to Jose insofar as Article 15l of
the Family Code is concerned. In this relation, it is apt to clarify
that while it was the disagreement between Jose and Consuelo that
directly resulted in the filing of the suit the fact remains that Rene"
Luis,   Philippe,   and   Claudine   were   rightfully   imp   leaded   as   co­
defendants in Jose's complaint as they are co­owners of the subject
lands in dispute. In view of the inclusion of "strangers" to the suit
between   Jose   and   Consuelo   who   are   full­blooded   siblings,   the
Court concludes that the suit is beyond the ambit of Article 151 of
the   Family   Code.   Perforce,   the   courts a   quo gravely   erred   in
dismissing Jose's complaint due to noncompliance with the earnest
effort requirement therein.
WHEREFORE, the petition is GRANTED. The Decision dated
September 24, 2014 and the Resolution dated March 17, 2015 of
the   Court   of   Appeals   in   CA.­G.R.   SP   No. 129232 are
hereby REVERSED and SET ASIDE. Accordingly,   Civil   Case
No. 12­004 is REINSTATED and REMANDED to the Regional
Trial   Court   of   Muntinlupa   City,   Branch   205   for   further
proceedings.
SO ORDERED.
PERLAS­BERNABE
Associate Justice
172
173
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 58010. March 31, 1993.
EMILIA   O'LACO   and   HUCO   LUNA,   petitioners,   vs.
VALENTIN CO CHO CHIT, O LAY KIA and COURT OF
APPEALS, respondents.
Sergio L. Guadiz for petitioners.
Norberto J . Quisumbing & Associates for private respondents.
SYLLABUS
1.   REMEDIAL   LAW;   CIVIL   PROCEDURE;   ACTIONS;
CONDITION   PRECEDENT   TO   FILING   OF  SUIT   BETWEEN
MEMBERS OF THE SAME FAMILY; EFFECT OF FAILURE
TO  COMPLY  WITH  CONDITION. — Admittedly, the  present
action   is   between   members   of   the   same   family   since   petitioner
Emilia   O'Laco   and   respondent   O   Lay   Kia   are   half­sisters.
Consequently, there should be an averment in the compliant that
earnest efforts toward a compromise have been made, pursuant to
Art. 222 of the New Civil Code, or a motion to dismiss could have
been filed under Sec. 1, par. (j), Rule 16 of the Rules of Court. For,
it  is  well­settled  that the   attempt  to  compromise   as  well  as the
inability to succeed is a condition precedent to the filing of a suit
between members  of  the  same  family.  Hence, the   defect  in the
complaint is assailable at any stage of the proceedings, even on
appeal, for lack of cause of action.
2. ID.; ID.; AMENDMENT TO COMPLAINT; WHEN PROPER;
AMENDMENT   TO   CONFORM   TO   EVIDENCE.   —   Plaintiff
may be allowed to amend his complaint to correct the defect if the
amendment does not actually confer jurisdiction on the court in
which the action is filed, i.e., if the cause of action was originally
within that court's jurisdiction. In such case, the amendment is only
to cure the perceived defect in the complaint, thus may be allowed.
In the case before Us, while respondent­spouses did not formally
amend their complaint, they were nonetheless allowed to introduce
evidence   purporting   to   show   that   earnest   efforts   toward   a
compromise   had   been   made,   that   is,   respondent   O   Lay   Kia
importuned Emilia O'Laco and pressed her for the transfer of the
title of the Oroquieta property in the name of spouses O Lay Kia
and Valentin Co Cho Chit, just before Emilia's marriage to Hugo
Luna. But, instead of transferring the title as requested, Emilia sold
the property to the Roman Catholic Archbishop of Manila. This
testimony was not objected to by petitioner­spouses. Hence, the
complaint   was   deemed   accordingly   amended   to   conform   to   the
evidence, pursuant to Sec. 5, Rule 10 of the Rules of Court which
reads   —   "Sec.   5.   Amendment   to   conform   to   or   authorize
presentation   of   evidence.   —   When   issues   not   raised   by   the
pleadings are tried by express or implied consent of the parties,
they shall be treated in all respects, as if they had been raised in the
pleadings . . ."  Indeed, if  the  defendant permits evidence  to be
introduced   without   objection   and   which   supplies   the   necessary
allegations of a defective complaint, then the evidence is deemed
to   have   the   effect   of   curing   the   defects   of   the   complaint.   The
insufficiency of the  allegations in the complaint is deemed ipso
facto rectified.
3. CIVIL LAW; OBLIGATIONS AND CONTRACTS; TRUSTS;
EXPRESS TRUST; DEFINED; IMPLIED TRUST; DEFINED. —
By definition, trust relations between parties may either be express
or implied. Express trusts are those which are created by the direct
and positive acts of the parties, by some writing or deed, or will, or
by words evincing an intention to create a trust. Implied trusts are
those which, without being express, are deducible from the nature
of the transaction as matters of intent, or which are superinduced
on   the   transaction   by   operation   of   law   as   matters   of   equity,
independently of the particular intention of the parties.
4.   ID.;   ID.;   ID.;   IMPLIED   TRUSTS;   RESULTING   TRUST;
BASIS   THEREOF;   CONSTRUCTIVE   TRUST;   BASIS
THEREOF.   —   Implied   trust   may   either   be   resulting   or
constructive trusts, both coming into being by operation of law.
Resulting trusts are based on the equitable doctrine that valuable
consideration and not legal title determines the equitable title or
interest and are presumed always to have been contemplated by the
parties.   They   arise   from   the   nature   or   circumstances   of   the
consideration   involved   in   a   transaction   whereby   one   person
thereby becomes invested with legal title but is obligated in equity
to hold his legal title for the benefit of another. On the other hand,
constructive   trusts   are   created   by   the   construction   of   equity   in
order   to   satisfy   the   demands   of   justice   and   prevent   unjust
174
enrichment. They arise contrary to intention against one who, by
fraud, duress or  abuse of confidence, obtains or  holds the  legal
right   to   property   which   he   ought   not,   in   equity   and   good
conscience, to hold.
5.   ID.;   ID.;   ID.;   EXPRESS   TRUSTS   CONCERNING
IMMOVABLES   NOT   PROVED   BY   PAROL   EVIDENCE;
IMPLIED   TRUST   IN   REAL   PROPERTY   ESTABLISHED   BY
PAROL EVIDENCE; PROOF REQUIRED; CASE AT BAR. —
Unlike   express   trusts   concerning   immovables   or   any   interest
therein which cannot be proved by parol evidence, implied trusts
may   be   established   by   oral   evidence.   However,   in   order   to
establish an implied trust in real property by parol evidence, the
proof should be as fully convincing as if the acts giving rise to the
trust obligation were proven by an authentic document. It cannot
be   established   upon   vague   and   inconclusive   proof.   After   a
thorough   review   of   the   evidence   on   record,   We   hold   that   a
resulting trust was indeed intended by the parties under Art. 1448
of the New Civil Code which states — "Art. 1448. There is an
implied trust when property is sold, and the legal estate is granted
to one party but the price is paid by another for the purpose of
having the beneficial interest of the property. The former is the
trustee, while the latter is the beneficiary . . ." As stipulated by the
parties, the document of sale, the owner's duplicate copy of the
certificate of title, insurance policies, receipt of initial premium of
insurance   coverage   and   real   estate   tax   receipts   were   all   in   the
possession of respondent­spouses which they offered in evidence.
As emphatically asserted by respondent O Lay Kia, the reason why
these documents of ownership remained with her is that the land in
question   belonged   to   her.   Indeed,   there   can   be   no   persuasive
rationalization for the possession of these documents of ownership
by respondent­spouses for seventeen (17) years after the Oroquieta
property was purchased in 1943 than that of precluding its possible
sale,   alienation   or   conveyance   by   Emilia   O'Laco,   absent   any
machination or fraud. This continued possession of the documents,
together   with   other   corroborating   evidence   spread   on   record,
strongly suggests that Emilia  O'Laco merely held the  Oroquieta
property in trust for respondent­spouses.
6.   ID.;   ID.;   ID.;   CONSTRUCTIVE   TRUST   SUBJECT   TO
PRESCRIPTION;   RESULTING   TRUST   IMPRESCRIPTIBLE;
RESULTING   TRUST   CONVERTED   TO   CONSTRUCTIVE
TRUST   BY   REPUDIATION;   REQUISITES;   PRESCRIPTIVE
PERIOD   FOR   ACTION   FOR   RECONVEYANCE   BASED   ON
CONSTRUCTIVE TRUST. — As differentiated from constructive
trusts, where the settled rule is that prescription may supervene, in
resulting trust, the rule of imprescriptibility may apply for as long
as the trustee has not repudiated the trust. Once the resulting trust
is repudiated, however, it is converted into a constructive trust and
is   subject   to   prescription.   A   resulting   trust   is   repudiated   if   the
following   requisites   concur:   (a)   the   trustee   has   performed
unequivocal   acts   of   repudiation   amounting   to   an   ouster   of   the
cestui qui trust; (b)  such positive  acts of  repudiation have been
made known to the cestui qui trust; and, (c) the evidence thereon is
clear   and   convincing.   In   Tale   v.   Court   of   Appeals   the   Court
categorically ruled that an action for reconveyance based on an
implied or constructive trust must perforce prescribe in ten (10)
years,   and   not   otherwise,   thereby   modifying   previous   decisions
holding that the prescriptive period was four (4) years. So long as
the trustee recognizes the trust, the beneficiary may rely upon the
recognition, and ordinarily will not be in fault for omitting to bring
an   action   to   enforce   his   rights.   There   is   no   running   of   the
prescriptive period if the trustee expressly recognizes the resulting
trust.   Since   the   complaint   for   breach   of   trust   was   filed   by
respondent­spouses two (2) months after acquiring knowledge of
the sale, the action therefore has not yet prescribed.
D E C I S I O N
BELLOSILLO, J p:
History is replete with cases of erstwhile close family relations put
asunder by property disputes. This is one of them. It involves half­
sisters   each   claiming   ownership   over   a   parcel   of   land.   While
petitioner Emilia O'Laco asserts that she merely left the certificate
of title covering the property with private respondent O Lay Kia
for safekeeping, the latter who is the former's older sister insists
that the title was in her possession because she and her husband
bought   the   property   from   their   conjugal   funds.   To   be   resolved
therefore is the issue of whether a resulting trust was intended by
them in the acquisition of the property. The trial court declared that
there was no trust relation of any sort between the sisters. 1 The
Court of Appeals ruled otherwise. 2 Hence, the instant petition for
review on certiorari of the decision of the appellate court together
with its resolution denying reconsideration. 3
It   appears   that   on   31   May   1943,   the   Philippine   Sugar   Estate
Development  Company, Ltd.,  sold  a  parcel  of   land, Lot  No. 5,
Block No. 10, Plan Psu­10038, situated at Oroquieta St., Sta. Cruz,
Manila, with the Deed of Absolute Sale naming Emilia O'Laco as
vendee;   thereafter,   Transfer   Certificate   of   Title   No.   66456   was
issued in her name.
On   17   May   1960,   private   respondent­spouses   Valentin   Co   Cho
Chit   and   O   Lay   Wa   learned   from   the   newspapers   that   Emilia
O'Laco sold the same property to the Roman Catholic Archbishop
of   Manila   for   P230,000.00,   with   assumption   of   the   real   estate
mortgage constituted thereon. 4
On 22 June 1960, respondent­spouses Valentin Co Cho Chit and O
Lay Kia sued petitioner­spouses Emilia O'Laco and Hugo Luna to
recover the purchase price of the land before the then Court of First
Instance   of   Rizal,   respondent­spouses   asserting   that   petitioner
Emilia   O'Laco   knew   that   they   were   the   real   vendees   of   the
Oroquieta   property   sold   in   1943   by   Philippine   Sugar   Estate
Development Company, Ltd., and that the legal title thereto was
merely   placed   in   her   name.   They   contend   that   Emilia   O'Laco
breached the trust when she sold the land to the Roman Catholic
Archbishop of Manila. Meanwhile, they asked the  trial court to
garnish all the amounts still due and payable to petitioner­spouses
arising from the sale, which was granted on 30 June 1960. 5
Petitioner­spouses deny the existence of any form of trust relation.
They aver that Emilia O'Laco actually bought the property with her
own   money;   that   she   left   the   Deed   of   Absolute   Sale   and   the
corresponding   title   with   respondent­spouses   merely   for
safekeeping; that when she asked for the return of the documents
evidencing her ownership, respondent­spouses told her that these
were misplaced or lost; and, that in view of the loss, she filed a
petition for issuance of a new title, and on 18 August 1944 the then
Court of First Instance of Manila granted her petition.
On   20   September   1976,   finding   no   trust   relation   between   the
parties, the trial court dismissed the complaint together with the
counterclaim. Petitioners and respondents appealed.
On 9 April 1981, the Court of Appeals set aside the decision of the
trial court thus —
". . . We set aside the decision of the lower court dated September
20,   1976   and   the   order   of   January   5,   1977   and   another   one   is
175
hereby entered ordering the defendants­appellees to pay plaintiffs­
appellants   jointly   and   severally   the   sum   of   P230,000.00
representing   the   value   of   the   property   subject   of   the   sale   with
assumption   of   mortgage   to   the   Roman   Catholic   Archbishop   of
Manila with legal interest from the filing of the complaint until
fully paid, the sum of P10,000.00 as attorney's fees, plus costs."
On 7 August 1981, the Court of Appeals denied reconsideration of
its decision, prompting petitioners to come to this Court for relief.
Petitioners   contend   that   the   present   action   should   have   been
dismissed. They argue that the complaint fails to allege that earnest
efforts toward a compromise were exerted considering that the suit
is between members of the same family, and no trust relation exists
between them. Even assuming ex argumenti that there is such a
relation, petitioners further argue, respondents are already barred
by laches.
We are not persuaded. Admittedly, the present action is between
members of the same family since petitioner Emilia O'Laco and
respondent O Lay Kia are half­sisters. Consequently, there should
be   an   averment   in   the   complaint   that   earnest   efforts   toward   a
compromise   have   been  made,  pursuant   to  Art.  222  of  the   New
Civil Code, 6 or a motion to dismiss could have been filed under
Sec. 1, par. (j), Rule 16, of the Rules of Court. 7 For, it is well­
settled that the attempt to compromise as well as the inability to
succeed is a condition precedent to the  filing of  a suit between
members of the same family. 8 Hence, the defect in the complaint
is assailable at any stage of the proceedings, even on appeal, for
lack of cause of action. 9
But, plaintiff may be allowed to amend his complaint to correct the
defect if the amendment does not actually confer jurisdiction on
the court in which the action is filed, i.e., if the cause of action was
originally   within   that   court's   jurisdiction.   10   In   such   case,   the
amendment is only to cure the perceived defect in the complaint,
thus may be allowed.
In the case before Us, while respondent­spouses did not formally
amend their complaint, they were nonetheless allowed to introduce
evidence   purporting   to   show   that   earnest   efforts   toward   a
compromise   had   been   made,   that   is,   respondent   O   Lay   Kia
importuned Emilia O'Laco and pressed her for the transfer of the
title of the Oroquieta property in the name of spouses O Lay Kia
and Valentin Co Cho Chit, just before Emilia's marriage to Hugo
Luna. 11 But, instead of transferring the title as requested, Emilia
sold the property to the Roman Catholic Archbishop of Manila.
This testimony was not objected to by petitioner­spouses. Hence,
the complaint was deemed accordingly amended to conform to the
evidence, 12 pursuant to Sec. 5, Rule 10 of the Rules of Court
which reads —
"SECTION 5. Amendment to conform to or authorize presentation
of evidence. — When issues not raised by the pleadings are tried
by express or implied consent of the parties, they shall be treated in
all   respects,   as,   if   they   had   been   raised   in   the   pleadings   .   .   ."
(emphasis supplied).
Indeed, if the defendant permits evidence to be introduced without
objection   and   which   supplies   the   necessary   allegations   of   a
defective complaint, then the evidence is deemed to have the effect
of curing the defects of the complaint. 13 The insufficiency of the
allegations in the complaint is deemed ipso facto rectified. 14
But the more crucial issue before Us is whether there is a trust
relation between the parties in contemplation of law.
We find that there is. By definition, trust relations between parties
may either be express or implied. 15 Express trusts are those which
are created by the direct and positive acts of the parties, by some
writing or deed, or will, or by words evincing an intention to create
a trust. 16 Implied trusts are those which, without being express,
are   deducible   from   the   nature   of   the   transaction   as   matters   of
intent, or which are superinduced on the transaction by operation
of   law   as   matters   of   equity,   independently   of   the   particular
intention of the parties.17 Implied trusts may either be resulting or
constructive trusts, both coming into being by operation of law. 18
Resulting trusts are based on the equitable doctrine that valuable
consideration and not legal title determines the equitable title or
interest 19 and are presumed always to have been contemplated by
the   parties.  They  arise   from   the   nature   or   circumstances  of   the
consideration   involved   in   a   transaction   whereby   one   person
thereby becomes invested with legal title but is obligated in equity
to hold his legal title for the benefit of another. 20 On the other
hand, constructive trusts are created by the construction of equity
in order to satisfy the demands of justice 21 and prevent unjust
enrichment. They arise contrary to intention against one who, by
fraud, duress or  abuse of confidence, obtains or  holds the  legal
right   to   property   which   he   ought   not,   in   equity   and   good
conscience, to hold. 22
Specific  examples of  resulting trusts may be found in the Civil older brother of Emilia, under similar or identical circumstances.
Code, particularly Arts. 1448, 1449, 1451,1452 and 1453, 23 while The   testimony   of   former   counsel   for   respondent­spouses,   then
constructive  trusts are illustrated in Arts. 1450, 1454, 1455 and Associate Justice Antonio G. Lucero of the Court of Appeals, is
1456. 24 enlightening —
Unlike   express   trusts   concerning   immovables   or   any   interest "Q In the same conversation he told you how he would buy the
therein   which   cannot   be   proved   by   parol   evidence,   25   implied property (referring to the Oroquieta property), he and his wife?
trusts may be established by oral evidence. 26 However, in order to
establish an implied trust in real property by parol evidence, the "A Yes, Sir, he did.
proof should be as fully convincing as if the acts giving rise to the
trust   obligation   were   proven   by   an   authentic   document.   27   It
"Q What did he say?
cannot be established upon vague and inconclusive proof. 28
xxx xxx xxx
After a thorough review of the evidence on record, We hold that a
resulting trust was indeed intended by the parties under Art. 1448
of the New Civil Code which states — "A He said he and his wife has (sic) already acquired by purchase a
certain property located at Kusang­Loob, Sta. Cruz, Manila. He
told me he would like to place the Oroquieta Maternity Hospital in
"ARTICLE 1448. There is an implied trust when property is sold,
case the negotiation materialize(s) in the name of a sister of his
and the legal estate is granted to one party but the price is paid by
wife (O'Laco)" (emphasis supplied). 30
another   for   the   purpose   of   having   the   beneficial   interest   of   the
property.   The   former   is   the   trustee,   while   the   latter   is   the
beneficiary . . ." (emphasis supplied). On the part of respondent­spouses, they explained that the reason
why   they   did   not   place   these   Oroquieta   and   Kusang­Loob
properties in their name was that being Chinese nationals at the
First.   As   stipulated   by   the   parties,   the   document   of   sale,   the
time  of  the  purchase  they did not want to execute  the  required
owner's duplicate copy of the certificate of title, insurance policies,
affidavit   to   the   effect  that   they  were   allies  of   the   Japanese.   31
receipt of initial premium of insurance coverage and real estate tax
Since O Lay Kia took care of Emilia who was still young when her
receipts ware all in the possession of respondent spouses which
mother died, 32 respondent­spouses did not hesitate to place the
they offered in evidence. As emphatically asserted by respondent
title of the Oroquieta property in Emilia's name.
O   Lay   Kia,   the   reason   why   these   documents   of   ownership
remained with her is that the land in question belonged to her. 29
Quite significantly, respondent­spouses also instituted an action for
reconveyance  against  Ambrosio  O'Laco when the  latter  claimed
Indeed,   there   can   be   no   persuasive   rationalization   for   the
the   Kusang­Loob   property   as   his   own.   A   similar   stipulation   of
possession   of   these   documents   of   ownership   by   respondent­
facts  was  likewise   entered,  i.e.,  respondent­spouses  had  in  their
spouses for seventeen (17) years after the Oroquieta property was
possession   documents   showing   ownership   of   the   Kusang­Loob
purchased   in   1943   than   that   of   precluding   its   possible   sale,
property which they offered in evidence. In that case, the decision
alienation   or   conveyance   by   Emilia   O'Laco,   absent   any
of the trial court, now final and executory, declared respondent­
machination or fraud. This continued possession of the documents,
spouses   as   owners   of   the   Kusang­Loob   property   and   ordered
together   with   other   corroborating   evidence   spread   on   record,
Ambrosio O'Laco to reconvey it to them. 33
strongly suggests that Emilia  O'Laco merely held the  Oroquieta
property in trust for respondent­spouses.
Incidentally,  Ambrosio O'Laco thus  charged  respondent  spouses
Valentin   Co   Cho   Cit   and   O   Lay   Kia   before   the   Anti­Dummy
Second.   It   may   be   worth   to   mention   that   before   buying   the
Board,   docketed   as   Case   No.   2424,   for   their   acquisition   of   the
Oroquieta   property,   respondent­spouses   purchased   another
Kusang­Loob   and   Oroquieta   properties.   34   He   claimed   that
property situated in Kusang­Loob, Sta. Cruz, Manila, where  the
respondent­spouses utilized his name in buying the Kusang­Loob
certificate of title was placed in the name of Ambrosio O'Laco,
property while that of petitioner O'Laco was used in the purchase
176
of   the   Oroquieta   property.   In   effect,   there   was   an   implied
admission by Ambrosio that his sister Emilia, like him, was merely
used as a dummy. However, the Anti­Dummy Board exonerated
respondent­spouses   since   the   purchases   were   made   in   1943,   or
during   World   War   II,   when   the   Anti­Dummy   Law   was   not
enforceable.
Third. The circumstances by which Emilia O'Laco obtained a new
title   by   reason   of   the   alleged   loss   of   the   old   title   then   in   the
possession   of   respondent­spouses   cast   serious   doubt   on   the
veracity   of   her   ownership.   The   petitions   respectively   filed   by
Emilia O'Laco and Ambrosio O'Laco for  the  Oroquieta and the
Kusang­Loob properties were both granted on the same day, 18
August 1944, by the then Court of First Instance of Manila. These
orders were recorded in the Primary Entry Book of the Register of
Deeds of Manila at the same time, 2:35 o'clock in the afternoon of
1 September 1944, in consecutive entries, Entries Nos. 246117­18.
35 This coincidence lends credence to the position of respondent­
spouses that there was in fact a conspiracy between the siblings
Ambrosio and Emilia to defraud and deprive respondents of their
title to the Oroquieta and Kusang­Loob properties.
Fourth.   Until   the   sale   of   the   Oroquieta   property   to   the   Roman
Catholic Archbishop of Manila, petitioner Emilia O'Laco actually
recognized   the   trust.   Specifically,   when   respondent   spouses
learned that Emilia was getting married to Hugo, O Lay Kia asked
her to have the title to the property already transferred to her and
her   husband   Valentin,   and   Emilia   assured   her   that   "would   be
arranged (maaayos na)" after her wedding. 36 Her answer was an
express recognition of the trust, otherwise, she would have refused
the  request outright. Petitioners never  objected to this evidence;
nor did they attempt to controvert it.
Fifth. The trial court itself determined that "Valentin Co Cho Chit
and O Lay Kia had some money with which they could buy the
property."   37   In   fact,   Valentin   was   the   Chief   Mechanic   of   the
Paniqui Sugar  Mills, was engaged in the  buy and sell business,
operated a gasoline station, and owned an auto supply store as well
as a ten­door apartment in Caloocan City. 38 In contrast, Emilia
O'Laco   failed   to   convince   the   Court   that   she   was   financially
capable of purchasing the Oroquieta property. In fact, she opened a
bank account only in 1946 and likewise began filing income tax
returns   that   same   year,   39   while   the   property   in   question   was
bought in 1943. Respondent­spouses even helped Emilia and her
brothers in their expenses and livelihood. Emilia could only give a
vague account on how she raised the money for the purchase of the
property. Her narration of the transaction of sale abounds with "I But immediately after Emilia sold the Oroquieta property which is
don't know" and "I don't remember." 40 obviously  a disavowal  of  the  resulting trust, respondent­spouses
instituted   the   present   suit   for   breach   of   trust.   Correspondingly,
Having established a resulting trust between the parties, the next laches cannot lie against them.
question is whether prescription has set in.
After all, so long as the trustee recognizes the trust, the beneficiary
As differentiated from constructive trusts, where the settled rule is may rely upon the recognition, and ordinarily will not be in fault
that   prescription   may   supervene,   in   resulting   trust,   the   rule   of for omitting to bring an action to enforce his rights. 44 There is no
imprescriptibility   may   apply   for   as   long   as   the   trustee   has   not running   of   the   prescriptive   period   if   the   trustee   expressly
repudiated   the   trust.   41   Once   the   resulting   trust   is   repudiated, recognizes the resulting trust. 45 Since the complaint for breach of
however, it is converted into a constructive trust and is subject to trust   was   filed   by   respondent­spouses   two   (2)   months   after
prescription. acquiring knowledge of the sale, the action therefore has not yet
prescribed.
A resulting trust is repudiated if the following requisites concur:
WHEREFORE, the Petition for Review on Certiorari is DENIED.
(a)   the   trustee   has   performed   unequivocal   acts   of   repudiation
The   Decision   of   the   Court   of   Appeals   of   9   April   1981,   which
amounting to an ouster of the cestui qui trust; (b) such positive acts
reversed the trial court, is AFFIRMED. Costs against petitioners.
of repudiation have been made known to the cestui qui trust; and,
(c) the evidence thereon is clear and convincing. 42
SO ORDERED.
In Tale v. Court of Appeals 43 the Court categorically ruled that an
action for reconveyance based on an implied or constructive trust Cruz , Griño­Aquino and Quiason, JJ ., concur.
must   perforce   prescribe   in   ten   (10)   years,   and   not   otherwise,
thereby modifying previous decisions holding that the prescriptive
period was four (4) years.
Neither the registration of the Oroquieta property in the name of
petitioner Emilia O'Laco nor the issuance of a new Torrens title in
1944 in her name in lieu of the alleged loss of the original may be
made the basis for the commencement of the prescriptive period.
For, the issuance of the Torrens title in the name of Emilia O'Laco
could not be considered adverse, much less fraudulent. Precisely,
although the property was bought by respondent­spouses, the legal
title was placed in the name of Emilia O'Laco. The transfer of the
Torrens title in her name was only in consonance with the deed of
sale in her favor. Consequently, there was no cause for any alarm
on the part of respondent­spouses. As late as 1959, or just before
she got married, Emilia continued to recognize the ownership of
respondent­spouses over the Oroquieta property. Thus, until that
point,   respondent­spouses   were   not   aware   of   any   act   of   Emilia
which would convey to them the idea that she was repudiating the
resulting   trust.   The   second   requisite   is   therefore   absent.   Hence,
prescription did not begin to run until the sale of the Oroquieta
property, which was clearly an act of repudiation.
177
178
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION  Hernando was precluded from raising this issue since he did not
G.R. No. 109068 January 10, 1994
GAUDENCIO GUERRERO, petitioner,
vs.
REGIONAL TRIAL COURT OF ILOCOS NORTE, BR. XVI,
JUDGE LUIS B. BELLO, JR., PRESIDING, and PEDRO G.  cognizance of the case." He warned that unless the complaint was
HERNANDO, respondents.
Juan Jacito for petitioner.
Alipio V. Flores for private respondent.
BELLOSILLO, J.:
Filed   by   petitioner   as   an accion   publicana1 against   private
respondent,   this   case   assumed   another   dimension   when   it   was
dismissed by respondent Judge on the ground that the parties being
brother­in­law   the   complaint   should   have   alleged   that   earnest
efforts were first exerted towards a compromise.
Admittedly, the complaint does not allege that the parties exerted
earnest towards a compromise and that the same failed. However,
private respondent Pedro G. Hernando apparently overlooked this
alleged defect since he did not file any motion to dismiss nor attack
the   complaint   on   this   ground   in   his   answer.   It   was   only   on   7
December 1992, at the pre­trial conference, that the relationship of
petitioner   Gaudencio   Guerrero   and   respondent   Hernando   was
noted by respondent Judge Luis B. Bello, Jr., they being married to
half­sisters   hence   are   brothers­in­law,   and   on   the   basis   thereof
respondent Judge gave petitioner five (5) days "to file his motion
and amended complaint" to allege that the parties were very close
relatives,   their   respective   wives   being   sisters,   and   that   the
complaint   to   be   maintained   should   allege   that   earnest   efforts
towards   a   compromise   were   exerted   but   failed.   Apparently,
respondent Judge considered this deficiency a jurisdictional defect.
On   11   December   1992,   Guerrero   moved   to   reconsider   the   7
December 1992 Order claiming that since brothers by affinity are
not   members   of   the   same   family,   he   was  not   required  to   exert
efforts   towards   a   compromise.   Guerrero   likewise   argued   that
file   a   motion   to   dismiss   nor   assert   the   same   as   an   affirmative
defense in his answer.
On 22 December 1992, respondent Judge denied the motion for
reconsideration holding that "[f]ailure to allege that earnest efforts
towards   a   compromise   is   jurisdictional   such   that   for   failure   to
allege same the court would be deprived of its jurisdiction to take
amended within five (5) days the case would be dismissed.
On   29   January   1993,   the   5­day   period   having   expired   without
Guerrero amending his complaint, respondent Judge dismissed the
case, declaring the dismissal however to be without prejudice.
Guerrero appeals by way of this petition for review the dismissal
by   the   court a   quo.   He   raises   these   legal   issues:   (a)   whether
brothers by affinity are considered members of the same family
contemplated in Art. 217, par. (4), and Art. 222 of the New Civil
Code, as well as under Sec. 1, par. (j), Rule 16, of the Rules of
Court requiring earnest efforts towards a compromise before a suit
between them may be instituted and maintained; and, (b) whether
the absence of an allegation in the complaint that earnest efforts
towards   a   compromise   were   exerted,   which   efforts   failed,   is   a
ground for dismissal for lack of jurisdiction.
The Constitution protects the sanctity of the family and endeavors
to strengthen it as a basic autonomous social institution. 2 This is
also  embodied  in Art.  149,3 and  given flesh  in  Art.  151, of   the
Family Code, which provides:
Art. 151. No suit between members of the same family shall
prosper unless it should appear from the verified complaint
or petition that earnest efforts toward a compromise have
been made, but that the same had failed. If it is shown that
no   such   efforts   were   in   fact   made,   the   case   must   be
dismissed.
This   rule   shall  not  apply  to  cases  which  may  not  be   the
subject of compromise under the Civil Code.
179
Considering that Art. 151 herein­quoted starts with the negative
word "No", the requirement is mandatory 4 that the  complaint or
petition, which must be verified, should allege that earnest efforts
towards a compromise have been made but that the same failed, so
that "[i]f it is shown that no such efforts were in fact made, the
case must be dismissed."
Further, Art. 151 is contemplated by Sec. 1, par. (j), Rule 16, of the
Rules of Court which provides as a ground for motion to dismiss
"(t)hat the suit is between members of  the same  family and no
earnest efforts towards a compromise have been made."
The Code Commission, which drafted the precursor provision in
the Civil Code, explains the reason for the requirement that earnest
efforts at compromise be first exerted before a complaint is given
due course —
This rule is introduced because it is difficult to imagine
a   sadder   and   more   tragic   spectacle   than   a   litigation
between members of the same family. It is necessary
that every effort should be made toward a compromise
before a litigation is allowed to breed hate and passion
in the family. It is known that a lawsuit between close
relatives   generates   deeper   bitterness   than   between
strangers . . . A litigation in a family is to be lamented
far more than a lawsuit between strangers . . . 5
But the instant case presents no occasion for the application of the
above­quoted provisions. As early as two decades ago, we already
ruled   in Gayon   v. Gayon6 that   the   enumeration   of   "brothers   and
sisters"   as   members   of   the   same   family   does   not   comprehend
"sisters­in­law".   In   that   case,   then   Chief   Justice   Concepcion
emphasized that "sisters­in­law" (hence, also "brothers­in­law") are
not listed under Art. 217 of the New Civil Code as members of the
same family. Since Art. 150 of the Family Code repeats essentially
the   same   enumeration   of   "members  of   the   family",   we   find  no
reason to alter existing jurisprudence on the matter. Consequently,
the   court a quo erred in  ruling  that  petitioner  Guerrero, being  a
brother­in­law   of   private   respondent   Hernando,   was   required   to
exert   earnest   efforts   towards   a   compromise   before   filing   the
present suit.
In his Comment, Hernando argues that ". . . although both wives of
the   parties   were   not   impleaded,   it   remains   a   truism   that   being
spouses   of   the   contending   parties,   and   the   litigation   involves
ownership of real property, the spouses' interest and participation
in the land in question cannot be denied, making the suit still a suit
between half­sisters . . ."7
Finding   this   argument   preposterous,   Guerrero   counters   in   his
Reply that his "wife has no actual interest and participation in the
land subject of the . . . suit, which the petitioner bought, according
to   his   complaint,   before   he   married   his   wife." 8 This   factual
controversy however may be best left to the court a quo to resolve
when it resumes hearing the case.
WHEREFORE,   the   petition   is   GRANTED   and   the   appealed
Orders   of
7 December 1992, 22 December 1992 and 29 January 1993 are
SET ASIDE. The Regional Trial Court of Laoag City, Branch 16,
or whichever branch of the court the case may now be assigned, is
directed   to   continue   with   Civil   Case
No. 10084­16 with deliberate dispatch.
SO ORDERED.
Cruz, Davide, Jr. and Quiason, JJ., concur.

As regards the second issue, we need only reiterate our ruling in
O'Laco   v. Co   Cho   Chit,9 citing Mendoza   v. Court   of
Appeals, 10 that the attempt to compromise as well as the inability
to succeed is a condition precedent to the filing of a suit between
members of the same family, the absence of such allegation in the
complaint being assailable at any stage of the proceeding, even on
appeal, for lack of cause of action.

It   is   not   therefore   correct,   as   petitioner   contends,   that   private

respondent may be deemed to have waived the aforesaid defect in
failing to move or dismiss or raise the same in the Answer. On the
other hand, we cannot sustain the proposition of private respondent
that the case was, after all, also dismissed pursuant to Sec. 3, Rule
17, of the Rules of Court 11 for failure of petitioner to comply with
the court's order to amend his complaint.

A review of the assailed orders does not show any directive which
Guerrero   supposedly   defied.   The   Order   of   7   December   1992
merely gave Guerrero five (5) days to file his motion and amended
complaint with a reminder that the complaint failed to allege that
earnest efforts were exerted towards a compromise. The Order of
22   December   1992,   which   denied   Guerrero's   motion   for
reconsideration,   simply   stated   that   "Plaintiff if   it (sic) so
desire must
amend the complaint otherwise, the court will have to dismiss the
case   (emphasis   supplied)   .   .   ."   The   Order   of   29   January   1993
dismissing the case without prejudice only made reference to an
earlier   order   "admonishing"   counsel   for   Guerrero   to   amend   the
complaint, and an "admonition" is not synonymous with "order".
Moreover,   since   the   assailed   orders   do   not   find   support   in   our
jurisprudence but, on the other hand, are based on an erroneous
interpretation and application of the law, petitioner could not be
bound to comply with them. 12

180
181
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION  dismissed for lack of cause of action. 5
G.R. NO. 154132 August 31, 2006
HIYAS SAVINGS and LOAN BANK, INC. Petitioner,
vs.
HON. EDMUNDO T. ACUÑA, in his capacity as Pairing  a   compromise   had  been   made   by  the   plaintiff   before   filing   the
Judge of Regional Trial Court, Branch 122, Caloocan City,  complaint is not a ground for a motion to dismiss. Alberto asserts
and ALBERTO MORENO, Respondent.
D E C I S I O N
AUSTRIA­MARTINEZ, J.:
Before the Court is a petition for certiorari under Rule 65 of the
Rules of Court seeking to nullify the Orders 1 of the Regional Trial
Court (RTC) of Caloocan City, Branch 122, dated November 8,
2001 2 and   May   7,   2002 3 denying   herein   petitioner’s   Motion   to
Dismiss and Motion for Partial Reconsideration, respectively.
The antecedent facts are as follows:
On November 24, 2000, Alberto Moreno (private respondent) filed
with the RTC of Caloocan City a complaint against Hiyas Savings
and Loan Bank, Inc. (petitioner), his wife Remedios, the spouses
Felipe and Maria Owe and the Register of Deeds of Caloocan City
for cancellation of mortgage contending that he did not secure any
loan from petitioner, nor did he sign or execute any contract of
mortgage in its favor; that his wife, acting in conspiracy with Hiyas
and the spouses Owe, who were the ones that benefited from the
loan, made it appear that he signed the contract of mortgage; that
he could not have executed the said contract because he was then
working abroad. 4
On   May   17,  2001,   petitioner   filed   a   Motion   to   Dismiss   on   the
ground that private respondent failed to comply with Article 151 of
the   Family   Code   wherein   it   is   provided   that   no   suit   between
members of the same family shall prosper unless it should appear
from the verified complaint or petition that earnest efforts toward a
compromise   have   been   made,   but   that   the   same   have   failed. Petitioner   filed   a   Motion   for   Partial   Reconsideration. 10 Private
Petitioner contends that since the complaint does not contain any respondent   filed   his   Comment, 11 after   which   petitioner   filed   its
fact or averment that earnest efforts toward a compromise had been Reply. 12 Thereafter, private respondent filed his Rejoinder. 13
made   prior   to   its   institution,   then   the   complaint   should   be
On   May   7,   2002,   the   RTC   issued   the   second   assailed   Order
denying petitioner’s Motion for Partial Reconsideration. The trial
Private respondent filed his Comment on the Motion to Dismiss court ruled:
with Motion to Strike Out and to Declare Defendants in Default.
He argues that in cases where one of the parties is not a member of Reiterating the resolution of the court, dated November 8, 2001,
the same family as contemplated under Article 150 of the Family considering that the above­entitled case involves parties who are
Code, failure to allege in the complaint that earnest efforts toward strangers   to   the   family,   failure   to   allege   in   the   complaint   that
earnest efforts towards a compromise were made by plaintiff, is
not a ground for a Motion to Dismiss.
that since  three  of  the  party­defendants  are not members of  his
family the ground relied upon by Hiyas in its Motion to Dismiss is
Additionally, the court agrees with plaintiff that inasmuch as it is
inapplicable and unavailable. Alberto also prayed that defendants
defendant Remedios Moreno who stands to be benefited by Art.
be declared in default for their failure to file their answer on time. 6
151 of the Family Code, being a member of the same family as that
of plaintiff, only she may invoke said Art. 151. 14
Petitioner filed its Reply to the Comment with Opposition to the
Motion to Strike and to Declare Defendants in Default. 7 Private
x x x
respondent, in turn, filed his Rejoinder. 8
Hence, the instant Petition for Certiorari on the following grounds:
On  November   8,  2001,  the  RTC  issued  the   first   of  its   assailed
Orders denying the Motion to Dismiss, thus:
I.   Public   respondent   committed   grave   abuse   of   discretion
amounting to lack or in excess of jurisdiction when he ruled that
The   court   agrees   with   plaintiff   that   earnest   efforts   towards   a
lack of earnest efforts toward a compromise is not a ground for a
compromise is not required before  the  filing of  the instant case
motion to dismiss in suits between husband and wife when other
considering that the above­entitled case involves parties who are
parties who are strangers to the family are involved in the suit.
strangers to the family. As aptly pointed out in the cases cited by
Corollarily, public respondent committed grave abuse of discretion
plaintiff,   Magbaleta   v.   G[o]nong,   L­44903,   April   25,   1977   and
amounting to lack or in excess of jurisdiction when he applied the
Mendez v. [B]iangon, L­32159, October 28, 1977, if one of the
decision in the case of Magbaleta v. Gonong instead of the ruling
parties is a stranger, failure to allege in the complaint that earnest
in the case of De Guzman v. Genato.
efforts towards a compromise had been made by plaintiff before
filing the complaint, is not a ground for motion to dismiss.
II.   Public   respondent   committed   grave   abuse   of   discretion
amounting to lack or in excess of jurisdiction when he ruled that a
Insofar   as   plaintiff’s   prayer   for   declaration   of   default   against
party  who is  a  stranger  to  the  family  of  the  litigants  could  not
defendants, the same is meritorious only with respect to defendants
invoke lack of earnest efforts toward a compromise as a ground for
Remedios Moreno and the Register of Deeds of Kaloocan City. A
the dismissal of the complaint. 15
declaration   of   default   against   defendant   bank   is   not   proper
considering   that   the   filing   of   the   Motion   to   Dismiss   by   said
defendant operates to stop the running of the period within which At   the   outset,   the   Court   notes   that   the   instant   Petition
to file the required Answer. 9 for Certiorari should have been filed with the  Court of  Appeals
(CA) and not with this Court pursuant to the doctrine of hierarchy
of   courts.   Reiterating   the   established   policy   for   the   strict
182
observance of this doctrine, this Court held in Heirs of Bertuldo
Hinog v. Melicor 16 that:
Although the Supreme Court, Court of Appeals and the Regional
Trial   Courts   have   concurrent   jurisdiction   to   issue   writs
of certiorari,   prohibition, mandamus,   quo   warranto,   habeas
corpus and   injunction,   such   concurrence   does   not   give   the
petitioner unrestricted freedom of choice of court forum. As we
stated in People v. Cuaresma:
This Court's original jurisdiction to issue writs of certiorari is not
exclusive. It is shared by this Court with Regional Trial Courts and
with the Court of Appeals. This concurrence of jurisdiction is not,
however, to be taken as according to parties seeking any of the
writs an absolute, unrestrained freedom of choice of the court to
which  application   therefor   will   be   directed.  There   is   after   all   a
hierarchy of courts. That hierarchy is determinative of the venue of
appeals, and also serves as a general determinant of the appropriate
forum for petitions for the extraordinary writs. A becoming regard
for that judicial hierarchy most certainly indicates that petitions for
the issuance of extraordinary writs against first level ("inferior")
courts should be filed with the Regional Trial Court, and those
against the latter, with the Court of Appeals. A direct invocation of
the   Supreme   Court’s   original   jurisdiction   to   issue   these   writs
should   be   allowed   only   when   there   are   special   and   important
reasons  therefor, clearly  and  specifically  set  out  in  the   petition.
This is [an] established policy. It is a policy necessary to prevent
inordinate demands upon the Court’s time and attention which are
better   devoted  to those   matters  within  its  exclusive  jurisdiction,
and to prevent further over­crowding of the Court’s docket.
The rationale for this rule is two­fold: (a) it would be an imposition
upon the precious time of this Court; and (b) it would cause an
inevitable   and   resultant   delay,   intended   or   otherwise,   in   the
adjudication of cases, which in some instances had to be remanded
or referred to the lower court as the proper forum under the rules of
procedure, or as better equipped to resolve the issues because this
Court is not a trier of facts.
Thus,  this   Court  will   not  entertain  direct  resort  to  it   unless  the
redress desired cannot be obtained in the appropriate courts, and
exceptional   and   compelling   circumstances,   such   as   cases   of
national interest and of serious implications, justify the availment
of the extraordinary remedy of writ of certiorari, calling for the
exercise  of   its   primary  jurisdiction.  Exceptional   and  compelling
circumstances were held present in the following cases: (a) Chavez
vs. Romulo on citizens’ right to bear arms; (b) Government of the
United   States   of   America   vs.   Purganan on   bail   in   extradition
proceedings; (c) Commission on Elections vs. Quijano­Padilla on
government contract involving modernization and computerization
of   voters’   registration   list;   (d) Buklod   ng   Kawaning   EIIB   vs.
Zamora on status and existence of a public office; and (e) Fortich
vs. Corona on the so­called "Win­Win Resolution" of the Office of
the  President which modified the  approval of  the  conversion to
agro­industrial area. 17
In   the   present   case,   petitioner   failed   to   advance   a   satisfactory
explanation as to its failure to comply with the principle of judicial
hierarchy. There is no reason why the instant petition could not
have been brought before the CA. On this basis, the instant petition
should be dismissed.
And even if this Court passes upon the substantial issues raised by
petitioner, the instant petition likewise fails for lack of merit.
Restating its arguments in its Motion for Partial Reconsideration,
petitioner argues that what is applicable to the present case is the
Court’s decision in De Guzman v. Genato 18 and not in Magbaleta
v. Gonong, 19 the former being a case involving a husband and wife
while the latter is between brothers.
The Court is not persuaded.
Article 151 of the Family Code provides as follows:
No suit between members of the same family shall prosper unless
it should appear from the verified complaint or petition that earnest
efforts toward a compromise have been made, but that the same
have failed. If it is shown that no such efforts were in fact made,
the case must be dismissed.
This rule shall not apply to cases which may not be the subject of
compromise under the Civil Code.
Article 222 of the Civil Code from which Article 151 of the Family
Code was taken, essentially contains the same provisions, to wit:
No suit shall be filed or maintained between members of the same
family   unless   it   should   appear   that   earnest   efforts   toward   a
compromise have been made, but that the same have failed, subject
to the limitations in Article 2035. 20
183
The Code Commission that drafted Article 222 of the Civil Code
from which Article 151 of the Family Code was taken explains:
[I]t is difficult to imagine a sadder and more tragic spectacle than a
litigation between members of the same family. It is necessary that
every   effort   should   be   made   toward   a   compromise   before   a
litigation is allowed to breed hate and passion in the family. It is
known   that   a   lawsuit   between   close   relatives   generates   deeper
bitterness than between strangers. 21
In Magbaleta,   the   case   involved   brothers   and   a   stranger   to   the
family,   the   alleged   owner   of   the   subject   property.   The   Court,
taking   into   consideration   the   explanation   made   by   the   Code
Commision in its report, ruled that:
[T]hese considerations do not, however, weigh enough to make it
imperative   that   such   efforts   to   compromise   should   be   a
jurisdictional   pre­requisite   for   the   maintenance   of   an   action
whenever a stranger to the family is a party thereto, whether as a
necessary or indispensable one. It is not always that one who is
alien to the family would be willing to suffer the inconvenience of,
much less relish, the delay and the complications that wranglings
between or among relatives more often than not entail. Besides, it
is neither practical nor fair that the determination of the rights of a
stranger   to   the   family   who   just   happened   to   have   innocently
acquired some kind of interest in any right or property disputed
among its members should be made to depend on the way the latter
would settle their differences among themselves. 22 x x x.
Hence,   once   a   stranger   becomes   a   party   to   a   suit   involving
members   of   the   same   family,   the   law   no   longer   makes   it   a
condition   precedent   that   earnest   efforts   be   made   towards   a
compromise before the action can prosper.
In the subsequent case of De Guzman, the case involved spouses
and the alleged paramour of the wife. The Court ruled that due to
the   efforts   exerted   by   the   husband,   through   the   Philippine
Constabulary,   to   confront   the   wife,   there   was   substantial
compliance   with   the   law,   thereby   implying   that   even   in   the
presence of a party who is not a family member, the requirements
that earnest efforts towards a compromise have been exerted must
be complied with, pursuant to Article 222 of the Civil Code, now
Article 151 of the Family Code.
While De   Guzman was   decided   after Magbaleta,   the   principle
enunciated in the Magbaleta is the one that now prevails because it
is   reiterated   in   the   subsequent   cases   of Gonzales   v.
Lopez, 23 Esquivias v. Court of Appeals, 24 Spouses Hontiveros v.
Regional Trial Court, Branch 25, Iloilo City, 25 and the most recent
case of Martinez v. Martinez. 26 Thus, Article  151 of  the Family
Code   applies   to   cover   when   the   suit   is   exclusively   between   or
among family members.
The Court finds no cogent reason why the ruling in Magbaleta as
well as in all of the aforementioned cases should not equally apply
to suits involving husband and wife.
Petitioner makes much of the fact that the present case involves a
husband and his wife while Magbaleta is a case between brothers.
However,   the   Court   finds   no   specific,   unique,   or   special
circumstance that would make the ruling in Magbaleta as well as
in   the   abovementioned   cases   inapplicable   to   suits   involving   a
husband and his wife, as in the  present case. In the  first place,
Article 151 of the Family Code and Article 222 of the Civil Code
are   clear   that   the   provisions   therein   apply   to   suits   involving
"members of the same family" as contemplated under Article 150
of the Family Code, to wit:
ART. 150. Family relations include those:
(1) Between husband and wife;
(2) Between parents and children;
(3) Among other ascendants and descendants; and
(4) Among brothers and sisters, whether of the full or half blood.
and Article 217 of the Civil Code, to wit:
ART. 217. Family relations shall include those:
(1) Between husband and wife;
(2) Between parent and child;
(3) Among other ascendants and their descendants;
(4) Among brothers and sisters.
Petitioner also contends that the trial court committed grave abuse
of discretion when it ruled that petitioner, not being a member of
the same family as respondent, may not invoke the provisions of
Article 151 of the Family Code.
Suffice it to say that since the Court has ruled that the requirement
under Article 151 of the Family Code is applicable only in cases
which are  exclusively between or  among  members of   the   same
family, it necessarily follows that the same may be invoked only
by a party who is a member of that same family.
WHEREFORE,   the   instant   Petition
for Certiorari is DISMISSED for lack of merit.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION  Marcelino Marc G. Dario, 1/6; and Marcelino G. Dario III, 1/6.
G.R. No. 170829               November 20, 2006
PERLA G. PATRICIO, Petitioner,
vs.
MARCELINO G. DARIO III and THE HONORABLE  Private respondent filed a motion for reconsideration which was
COURT OF APPEALS, Second Division, Respondents.
D E C I S I O N
YNARES­SANTIAGO, J.:
This petition for review on certiorari under Rule 45 of the Rules of
Court seeks to annul and set aside the Resolution of the Court of
Appeals   dated   December   9,   20051 in   CA­G.R.   CV   No.   80680,
which dismissed the complaint for partition filed by petitioner for
being contrary to law and evidence.
On   July   5,   1987,   Marcelino   V.   Dario   died   intestate.   He   was
survived by  his  wife, petitioner  Perla  G.  Patricio  and their  two
sons, Marcelino Marc Dario and private respondent Marcelino G.
Dario III. Among the properties he left was a parcel of land with a
residential house and a pre­school building built thereon situated at
184
91 Oxford corner Ermin Garcia Streets in Cubao, Quezon City, as
evidenced by Transfer Certificate of Title (TCT) No. RT­30731
(175992) of the Quezon City Registry of Deeds, covering an area
of seven hundred fifty five (755) square meters, more or less.2
On   August   10,   1987,   petitioner,   Marcelino   Marc   and   private
respondent, extrajudicially settled the estate of Marcelino V. Dario.
Accordingly,   TCT   No.   RT­30731   (175992)   was   cancelled   and
TCT No. R­213963 was issued in the names of petitioner, private
respondent and Marcelino Marc.
Thereafter, petitioner and Marcelino Marc formally advised private
respondent of their intention to partition the subject property and
terminate the co­ownership. Private respondent refused to partition
the   property   hence   petitioner   and   Marcelino   Marc   instituted   an
action for partition before the Regional Trial Court of Quezon City
which was docketed as Civil Case No. Q­01­44038 and raffled to
Branch 78.
On October 3, 2002,3 the  trial court ordered the  partition of  the
subject property in the following manner: Perla G. Patricio, 4/6;
The   trial   court   also   ordered   the   sale   of   the   property   by   public
auction wherein all parties concerned may put up their bids. In case
of failure, the subject property should be distributed accordingly in
the aforestated manner.4
denied by the trial court on August 11, 2003,5 hence he appealed
before the Court of Appeals, which denied the same on October
19,  2005. However,  upon a  motion  for   reconsideration  filed by
private   respondent   on   December   9,   2005,   the   appellate   court
partially reconsidered the October 19, 2005 Decision. In the now
assailed Resolution, the Court of Appeals dismissed the complaint
for partition filed by petitioner  and Marcelino Marc for  lack of
merit.  It held that  the  family  home   should  continue   despite   the
death of one or both spouses as long as there is a minor beneficiary
thereof. The heirs could not partition the property unless the court
found compelling reasons to rule otherwise. The appellate court
also   held   that   the   minor   son   of   private   respondent,   who   is   a
grandson of spouses Marcelino V. Dario and Perla G. Patricio, was
a minor beneficiary of the family home.6
Hence, the instant petition on the following issues:
 I.
THE   HONORABLE   COURT   OF   APPEALS
PATENTLY ERRED IN REVERSING ITS EARLIER
DECISION   OF   OCTOBER   19,   2005   WHICH
AFFIRMED   IN   TOTO   THE   DECISION   OF   THE
TRIAL   COURT   DATED   03   OCTOBER   2002
GRANTING   THE   PARTITION   AND   SALE   BY
PUBLIC AUCTION OF THE SUBJECT PROPERTY.
II.
COROLLARILY,   THE   HONORABLE   COURT   OF
APPEALS   PATENTLY   ERRED   IN   APPLYING
ARTICLE 159 IN RELATION TO ARTICLE 154 OF
THE FAMILY CODE ON FAMILY HOME INSTEAD
OF ARTICLE 494 IN RELATION TO ARTICLES 495
AND   498   OF   THE   NEW   CIVIL   CODE   ON   CO­
OWNERSHIP.7
The sole issue is whether partition of the family home is proper
where one of the co­owners refuse to accede to such partition on
the ground that a minor beneficiary still resides in the said home.
Private respondent claims that the subject property which is the
family   home   duly   constituted   by   spouses   Marcelino   and   Perla
Dario cannot be partitioned while a minor beneficiary is still living
therein namely, his 12­year­old son, who is the grandson of the
decedent. He argues that as long as the minor is living in the family
home, the same continues as such until the beneficiary becomes of
age. Private respondent insists that even after the expiration of ten
years from the date of death of Marcelino on July 5, 1987, i.e.,
even   after   July   1997,   the   subject   property   continues   to   be
considered   as   the   family   home   considering   that   his   minor   son,
Marcelino Lorenzo R. Dario IV, who is a beneficiary of the said
family home, still resides in the premises.
On   the   other   hand,   petitioner   alleges   that   the   subject   property
remained   as   a   family   home   of   the   surviving   heirs   of   the   late
Marcelino V. Dario only up to July 5, 1997, which was the 10th
year from the date of death of the decedent. Petitioner argues that
the brothers Marcelino Marc and private respondent Marcelino III
were already of age at the time of the death of their father, 8 hence
there is no more minor beneficiary to speak of.
The  family  home   is  a  sacred symbol  of   family  love  and is  the
repository of cherished memories that last during one’s lifetime. 9 It
is the dwelling house where husband and wife, or by an unmarried
head   of   a   family,   reside,   including   the   land   on   which   it   is
situated.10 It is constituted jointly by the husband and the wife or
by an unmarried head of a family.11 The family home is deemed
constituted from the time it is occupied as a family residence. From
the time of its constitution and so long as any of its beneficiaries
actually resides therein, the family home continues to be such and
is   exempt   from   execution,   forced   sale   or   attachment   except   as
hereinafter   provided   and   to   the   extent   of   the   value   allowed   by
law.12
The  law  explicitly  provides  that occupancy  of  the  family  home
either by the owner thereof or by "any of its beneficiaries" must be
actual.   That   which   is   "actual"   is   something   real,   or   actually
existing, as opposed to something merely possible, or to something
which is presumptive or constructive. Actual occupancy, however,
need not be by the owner of the house specifically. Rather, the
property   may  be   occupied  by   the   "beneficiaries"   enumerated  in
Article 154 of the Family Code, which may include the in­laws
where the family home is constituted jointly by the husband and
wife. But the law definitely excludes maids and overseers. They
are not the beneficiaries contemplated by the Code.13
Article   154   of   the   Family   Code   enumerates   who   are   the
beneficiaries of a family home: (1) The husband and wife, or an
unmarried   person   who   is   the   head   of   a   family;   and   (2)   Their
parents, ascendants, descendants, brothers and sisters, whether the
relationship   be   legitimate   or   illegitimate,   who   are   living   in   the
family home and who depend upon the head of the family for legal
support.
To   be   a   beneficiary   of   the   family   home,   three   requisites   must
concur: (1) they must be among the relationships enumerated in
Art. 154 of the Family Code; (2) they live in the family home; and
(3)   they   are   dependent   for   legal   support   upon   the   head   of   the
family.
Moreover, Article 159 of the Family Code provides that the family
home shall continue despite the death of one or both spouses or of
the unmarried head of the family for a period of 10 years or for as
long as there is a minor beneficiary, and the heirs cannot partition
the same unless the court finds compelling reasons therefor. This
rule   shall   apply   regardless   of   whoever   owns   the   property   or
constituted the family home.
185
Article 159 of the Family Code applies in situations where death
occurs to persons  who constituted the  family home.1âwphi1 Dr.
Arturo M. Tolentino comments on the effect of death of one or
both spouses or the unmarried head of a family on the continuing
existence of the family home:
Upon the death of the spouses or the unmarried family head who
constituted the family home, or of the spouse who consented to the
constitution of his or her separate property as family home, the
property will remain as family home for ten years or for as long as
there   is   a   minor   beneficiary   living   in   it. If   there   is   no   more
beneficiary left at the time of death, we believe the family home
will be dissolved or cease, because there is no more reason for its
existence. If   there   are   beneficiaries   who   survive   living   in   the
family   home,   it   will   continue   for   ten   years,   unless   at   the
expiration of the ten years, there is still a minor beneficiary, in
which   case   the   family   home   continues   until   that   beneficiary
becomes of age.
After these periods lapse, the property may be partitioned by the
heirs. May the heirs who are beneficiaries of the family home keep
it intact by not partitioning the property after the period provided
by this article? We believe that although the heirs will continue
in ownership by not partitioning the property, it will cease to be a
family home.14 (Emphasis supplied)
Prof. Ernesto L. Pineda further explains the import of Art. 159 in
this manner:
The family home shall continue to exist despite the death of one or
both spouses or of the unmarried head of the family. Thereafter,
the length of its continued existence is dependent upon whether
there is still a minor­beneficiary residing therein. For as long as
there is one beneficiary even if the head of the family or both
spouses   are   already   dead,   the   family   home   will   continue   to
exist (Arts.   153,   159). If   there   is   no   minor­beneficiary,   it   will
subsist until 10 years and within this period, the heirs cannot
partition   the   same   except   when   there   are   compelling   reasons
which   will   justify   the   partition. This   rule   applies   regardless   of
whoever   owns   the   property   or   who   constituted   the   family
home.15 (Emphasis supplied)
The rule in Article 159 of the Family Code may thus be expressed
in this wise: If there are beneficiaries who survive and are living in
the   family   home,   it   will   continue   for   10   years,   unless   at   the
expiration of 10 years, there is still a minor beneficiary, in which
case the family home continues until that beneficiary becomes of
age.
It may be deduced from the view of Dr. Tolentino that as a general
rule, the family home may be preserved for a minimum of 10 years
following the death of the spouses or the unmarried family head
who constituted the family home, or of the spouse who consented
to the constitution of his or her separate property as family home.
After 10 years and a minor beneficiary still lives therein, the family
home shall be preserved only until that minor beneficiary reaches
the age of majority. The intention of the law is to safeguard and
protect the interests of the minor beneficiary until he reaches legal
age and would now be capable of supporting himself. However,
three requisites must concur before a minor beneficiary is entitled
to the benefits of Art. 159: (1) the relationship enumerated in Art.
154 of the Family Code; (2) they live in the family home, and (3)
they are dependent for legal support upon the head of the family.
Thus, the issue for resolution now is whether Marcelino Lorenzo
R.   Dario   IV,   the   minor   son   of   private   respondent,   can   be
considered as a beneficiary under Article 154 of the Family Code.
As to the first requisite, the beneficiaries of the family home are:
(1) The husband and wife, or an unmarried person who is the head
of   a   family;   and   (2)   Their   parents,   ascendants,   descendants,
brothers   and   sisters,   whether   the   relationship   be   legitimate   or
illegitimate. The term "descendants" contemplates all descendants
of the person or persons who constituted the family home without
distinction;  hence,  it  must   necessarily  include   the   grandchildren
and  great   grandchildren  of   the  spouses  who  constitute  a   family
home. Ubi lex non distinguit nec nos distinguire debemos. Where
the   law   does   not   distinguish,   we   should   not   distinguish.   Thus,
private   respondent’s   minor   son,   who   is   also   the   grandchild   of
deceased Marcelino V. Dario satisfies the first requisite.
As to the second requisite, minor beneficiaries must be actually
living in the family home to avail of the benefits derived from Art.
159. Marcelino Lorenzo R. Dario IV, also known as Ino, the son of
private   respondent   and   grandson   of   the   decedent   Marcelino   V.
Dario, has been living in the family home since 1994, or within 10
years from the death of the decedent, hence, he satisfies the second
requisite.
However, as to the third requisite, Marcelino Lorenzo R. Dario IV
cannot demand support from his paternal grandmother if he has
parents who are capable of supporting him. The liability for legal
support   falls   primarily   on   Marcelino   Lorenzo   R.   Dario   IV’s intention   to   dissolve   the   family   home,   since   there   is   no   more
parents, especially his father, herein private respondent who is the reason for its existence after the 10­year period ended in 1997.
head of his immediate family. The law first imposes the obligation
of legal support upon the shoulders of the parents, especially the With  this   finding,  there   is  no  legal  impediment  to  partition  the
father, and only in their default is the obligation imposed on the subject property.
grandparents.
The law does not encourage co­ownerships among individuals as
Marcelino Lorenzo R. Dario IV is dependent on legal support not oftentimes it results in inequitable situations such as in the instant
from his grandmother, but from his father.1âwphi1 Thus, despite case. Co­owners should be afforded every available opportunity to
residing   in   the   family   home   and   his   being   a   descendant   of divide  their   co­owned  property  to   prevent   these   situations   from
Marcelino V. Dario, Marcelino  Lorenzo R.  Dario IV  cannot be arising.
considered as beneficiary contemplated under Article 154 because
he   did   not   fulfill   the   third   requisite   of   being   dependent   on   his
As   we   ruled   in Santos   v.   Santos,19 no   co­owner   ought   to   be
grandmother   for   legal   support.   It   is   his   father   whom   he   is
compelled to stay in a co­ownership indefinitely, and may insist on
dependent on legal support, and who must now establish his own
partition   on   the   common   property   at   any   time.   An   action   to
family home separate and distinct from that of his parents, being of
demand partition is imprescriptible or cannot be barred by laches.
legal age.
Each   co­owner   may   demand   at   any   time   the   partition   of   the
common property.20
Legal   support,   also   known   as   family   support,   is   that   which   is
provided   by   law,   comprising   everything   indispensable   for
Since the parties were unable to agree on a partition, the court a
sustenance, dwelling, clothing, medical attendance, education and
quo should have ordered a partition by commissioners pursuant to
transportation,   in   keeping   with   the   financial   capacity   of   the
Section 3, Rule  69 of  the  Rules of  Court. Not more  than three
family.16 Legal support has the following characteristics: (1) It is
competent   and   disinterested   persons   should   be   appointed   as
personal,   based   on   family   ties   which   bind   the   obligor   and   the
commissioners to make the partition, commanding them to set off
obligee; (2) It is intransmissible; (3) It cannot be renounced; (4) It
to   the   plaintiff   and   to   each   party   in   interest   such   part   and
cannot   be   compromised;   (5)   It   is   free   from   attachment   or
proportion of the property as the court shall direct.
execution; (6) It is reciprocal; (7) It is variable in amount. 17
When it is made to appear to the commissioners that the real estate,
Professor Pineda is of the view that grandchildren cannot demand
or a portion thereof, cannot be divided without great prejudice to
support   directly   from   their   grandparents   if   they   have   parents
the interest of the parties, the court may order it assigned to one of
(ascendants of nearest degree) who are capable of supporting them.
the parties willing to take the same, provided he pays to the other
This is so because we have to follow the order of support under
parties such sum or sums of money as the commissioners deem
Art. 199.18 We agree with this view.
equitable, unless one of the parties interested ask that the property
be sold instead of being so assigned, in which case the court shall
The reasons behind Art. 199 as explained by Pineda and Tolentino: order the commissioners to sell the real estate at public sale, and
the closer the relationship of the relatives, the stronger the tie that the commissioners shall sell the same accordingly.21
binds them. Thus, the obligation to support under Art. 199 which
outlines the order of liability for support is imposed first upon the
The partition of the subject property should be made in accordance
shoulders of the  closer  relatives and only in their default is the
with the rule embodied in Art. 996 of the Civil Code. 22 Under the
obligation moved to the next nearer relatives and so on.
law of intestate succession, if the widow and legitimate children
survive,   the   widow   has   the   same   share   as   that   of   each   of   the
There is no showing that private respondent is without means to children. However, since only one­half of  the  conjugal property
support   his   son;   neither   is   there   any   evidence   to   prove   that which is owned by the decedent is to be allocated to the legal and
petitioner, as the paternal grandmother, was willing to voluntarily compulsory  heirs   (the   other  half   to  be   given  exclusively   to  the
provide for her grandson’s legal support. On the contrary, herein surviving spouse as her conjugal share of the property), the widow
petitioner filed for the partition of the property which shows an
186
will have the same share as each of her two surviving children.
Hence, the respective shares of the subject property, based on the
law on intestate succession are: (1) Perla Generosa Dario, 4/6; (2)
Marcelino Marc G. Dario II, 1/6 and (3) Marcelino G. Dario III,
1/6.

In Vda. de Daffon v. Court of Appeals,23 we held 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 court after trial should find the existence
of co­ownership among the parties, the court may and should order
the partition of the properties in the same action.24

WHEREFORE, the petition is GRANTED. The Resolution of the
Court of Appeals in CA­G.R. CV No. 80680 dated December 9,
2005,   is   REVERSED   and   SET   ASIDE.   The   case
is REMANDED to   the   Regional   Trial   Court   of   Quezon   City,
Branch   78,   who   is   directed   to   conduct   a   PARTITION   BY
COMMISSIONERS and effect the actual physical partition of the
subject property, as well as the improvements that lie therein, in
the   following   manner:   Perla   G.   Dario,   4/6;   Marcelino   Marc   G.
Dario,   1/6   and   Marcelino   G.   Dario   III,   1/6.   The   trial   court   is
DIRECTED   to   appoint   not   more   than   three   (3)   competent   and
disinterested persons, who should determine the technical metes
and bounds of the property and the proper share appertaining to
each heir, including the improvements, in accordance with Rule 69
of the Rules of Court. When it is made to the commissioners that
the real estate, or a portion thereof, cannot be divided without great
prejudice to the interest of the parties, the court a quo may order it
assigned to one of the parties willing to take the same, provided he
pays   to   the   other   parties   such   sum   or   sums   of   money   as   the
commissioners deem equitable, unless one of the parties interested
ask that the property be sold instead of being so assigned, in which
case the court shall order the commissioners to sell the real estate
at   public   sale,   and   the   commissioners   shall   sell   the   same
accordingly,   and   thereafter   distribute   the   proceeds   of   the   sale
appertaining to the just share of each heir. No pronouncement as to
costs.

SO ORDERED.

CONSUELO YNARES­SANTIAGO
Associate Justice

187
 Republic of the Philippines a. the amount of P30,000.00 by way of compensation for the
SUPREME COURT death of their son Audie Salinas;
Manila
b. P10,000.00 for the loss of earnings by reason of the death
FIRST DIVISION of said Audie Salinas;
G.R. No. 86355 May 31, 1990 c. the sum of P5,000.00 as burial expenses of Audie Salinas;
and
JOSE MODEQUILLO, petitioner,
vs. d. the sum of P5,000.00 by way of moral damages.
HON. AUGUSTO V. BREVA FRANCISCO SALINAS,  proper government agency. An opposition thereto was filed by the
FLORIPER ABELLAN­SALINAS, JUANITO CULAN­ 2. Plaintiffs­appellants Culan­Culan:
CULAN and DEPUTY SHERIFF FERNANDO 
PLATA respondents. a.   the   sum   of   P5,000.00   for   hospitalization   expenses   of
Renato Culan­ Culan; and
Josefina Brandares­Almazan for petitioner.
b. P5,000.00 for moral damages.
ABC Law Offices for private respondents.
3.   Both   plaintiff­appellants   Salinas   and   Culan­Culan,
P7,000.00 for attorney's fees and litigation expenses.
GANCAYCO, J.:
All counterclaims and other claims are hereby dismissed. 1
The issue in this petition is whether or not a final judgment of the
Court of Appeals in an action for damages may be satisfied by way
of execution of a family home constituted under the Family Code. The said judgment having become final and executory, a writ of
execution was issued by the Regional Trial Court of Davao City to
satisfy   the   said   judgment   on   the   goods   and   chattels   of   the
The facts are undisputed.
defendants   Jose   Modequillo   and   Benito   Malubay   at   Malalag,
Davao del Sur.
On January 29, 1988, a judgment was rendered by the Court of
Appeals in CA­G.R. CV No. 09218 entitled "Francisco Salinas, et
On July 7, 1988, the sheriff levied on a parcel of residential land
al. vs. Jose Modequillo, et al.," the dispositive part of which read
located at Poblacion Malalag, Davao del Sur containing an area of
as follows:
600 square meters with a market value of P34,550.00 and assessed
value   of   P7,570.00   per   Tax   Declaration   No.   87008­01359,
WHEREFORE, the decision under appeal should be, as it is registered   in   the   name   of   Jose   Modequillo   in   the   office   of   the
hereby, reversed and set aside. Judgment is hereby rendered Provincial Assessor of Davao del Sur; and a parcel of agricultural
finding   the   defendants­appellees   Jose   Modequillo   and land   located   at   Dalagbong   Bulacan,   Malalag,   Davao   del   Sur
Benito   Malubay   jointly   and   severally   liable   to   plaintiffs­ containing an area of 3 hectares with a market value of P24,130.00
appellants   as   hereinbelow   set   forth.   Accordingly, and assessed value of P9,650.00 per Tax Declaration No. 87­08­
defendants­appellees are ordered to pay jointly and severally 01848 registered in the name of Jose Modequillo in the office of
to: the Provincial Assessor of Davao del Sur. 2
1. Plaintiffs­appellants, the Salinas spouses:
A motion to quash and/or to set aside levy of execution was filed
by defendant Jose Modequillo alleging therein that the residential
188
land  located at Poblacion  Malalag is  where  the  family  home  is
built since 1969 prior to the commencement of this case and as
such is exempt from execution, forced sale or attachment under
Articles   152   and   153   of   the   Family   Code   except   for   liabilities
mentioned   in   Article   155   thereof,   and   that   the   judgment   debt
sought to be enforced against the family home of defendant is not
one of those enumerated under Article 155 of the Family Code. As
to   the   agricultural   land   although   it   is   declared   in   the   name   of
defendant it is alleged to be still part of the public land and the
transfer in his favor by the original possessor and applicant who
was  a   member   of   a   cultural   minority   was   not   approved   by  the
plaintiffs.
In   an   order   dated   August   26,   1988,   the   trial   court   denied   the
motion.   A   motion   for   reconsideration   thereof   was   filed   by
defendant and this was denied for lack of merit on September 2,
1988.
Hence,  the  herein  petition   for  review   on certiorari wherein  it   is
alleged   that   the   trial   court   erred   and   acted   in   excess   of   its
jurisdiction in denying petitioner's motion to quash and/or to set
aside levy on the properties and in denying petitioner' motion for
reconsideration   of   the   order   dated   August   26,   1988.   Petitioner
contends that only a question of law is involved in this petition. He
asserts that the residential house and lot was first occupied as his
family   residence   in   1969   and   was   duly   constituted   as   a   family
home under the Family Code which took effect on August 4, 1988.
Thus, petitioner argues that the said residential house and lot is
exempt from payment of the obligation enumerated in Article 155
of the Family Code; and that the decision in this case pertaining to
damages arising from a vehicular accident took place on March 16,
1976 and which became final in 1988 is not one of those instances
enumerated under Article 155 of the Family Code when the family
home   may   be   levied   upon   and   sold   on   execution.   It   is   further
alleged that the trial court erred in holding that the said house and
lot   became   a   family   home   only   on   August   4,   1988   when   the
Family Code became effective, and that the Family Code cannot be
interpreted in such a way that all family residences are deemed to
have   been   constituted   as   family   homes   at   the   time   of   their
occupancy prior to the effectivity of the said Code and that they are
exempt   from  execution   for   the   payment   of   obligations   incurred
before the effectivity of said Code; and that it also erred when it
declared that Article 162 of the Family Code does not state that the
provisions of Chapter 2, Title V have a retroactive effect.
Articles 152 and 153 of the Family Code provide as follows:
Art.   152.   The   family   home,   constituted   jointly   by   the
husband and the wife or by an unmarried head of a family,
is the dwelling house where they and their family reside,
and the land on which it is situated.
Art. 153. The family home is deemed constituted on a house
and lot from the time it is occupied as a family residence.
From the time of its constitution and so long as any of its
beneficiaries   actually   resides   therein,   the   family   home
continues to be such and is exempt from execution, forced
sale or attachment except as hereinafter provided and to the
extent of the value allowed by law.
Under the Family Code, a family home is deemed constituted on a
house and lot from the time it is occupied as a family residence.
There is no need to constitute the same judicially or extrajudicially
as required in the Civil Code. If the family actually resides in the
premises, it is, therefore, a family home as contemplated by law.
Thus, the creditors should take the necessary precautions to protect
their interest before extending credit to the spouses or head of the
family who owns the home.
Article 155 of the Family Code also provides as follows:
Art. 155. The family home shall be exempt from execution,
forced sale or attachment except:
(1) For non­payment of taxes;
(2) For debts incurred prior to the constitution of the family
home;
(3) For debts secured by mortgages on the premises before
or after such constitution; and
(4)   For   debts   due   to   laborers,   mechanics,   architects,
builders, material men and others who have rendered service
or furnished material for the construction of the building.
The exemption provided as aforestated is effective from the time of
the constitution of the family home as such, and lasts so long as
any of its beneficiaries actually resides therein.
In the present case, the residential house and lot of petitioner was Narvasa   (Chairman),   Cruz   and   Medialdea,   JJ.,   concur.   Griño­
not   constituted   as   a   family   home   whether   judicially   or Aquino, J., is on leave.
extrajudicially under the Civil Code. It became a family home by
operation of law only under Article 153 of the Family Code. It is
deemed constituted as a family home upon the effectivity of the
Family Code on August 3, 1988 not August 4, one year after its
publication in the Manila Chronicle on August 4, 1987 (1988 being
a leap year).
The contention of petitioner that it should be considered a family
home from the time it was occupied by petitioner and his family in
1969 is not well­ taken. Under Article 162 of the Family Code, it is
provided   that   "the   provisions   of   this   Chapter   shall   also   govern
existing   family   residences   insofar   as   said   provisions   are
applicable." It does not mean that Articles 152 and 153 of said
Code   have   a   retroactive   effect   such   that   all   existing   family
residences are deemed to have been constituted as family homes at
the time of their occupation prior to the effectivity of the Family
Code   and   are   exempt   from   execution   for   the   payment   of
obligations   incurred   before   the   effectivity   of   the   Family   Code.
Article 162 simply means that all existing family residences at the
time of the effectivity of the Family Code, are considered family
homes and are prospectively entitled to the benefits accorded to a
family home under the Family Code. Article 162 does not state that
the provisions of Chapter 2, Title V have a retroactive effect.
Is   the   family   home   of   petitioner   exempt   from   execution   of   the
money judgment aforecited No. The debt or liability which was the
basis  of   the   judgment  arose   or  was  incurred  at  the   time   of   the
vehicular accident on March 16, 1976 and the money judgment
arising therefrom was rendered by the appellate court on January
29,  1988. Both  preceded  the   effectivity  of  the   Family  Code  on
August 3, 1988. This case does not fall under the exemptions from
execution provided in the Family Code.
As to the agricultural land subject of the execution, the trial court
correctly ruled that the levy to be made by the sheriff shall be on
whatever rights the petitioner may have on the land.
WHEREFORE, the petition is DISMISSED for lack of merit. No
pronouncement as to costs.
SO ORDERED.
189
190
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION  were in continuous, open and peaceful possession of the land and
G.R. No. 108532 March 9, 1999
PABLITO TANEO, JR., JOSE TANEO, NENA T. CATUBIG  result of the alleged illegal deed of conveyance, private respondent
and HUSBAND, CILIA T. MORING and  was able to obtain in his name Tax Declaration No. 851920 over
HUSBAND, petitioners,
vs.
COURT OF APPEALS and ABDON GILIG, respondents.
KAPUNAN, J.:
The   issues   in   this   case   are   not   novel:   whether   or   not   the
conveyance made by way of the sheriff's sale pursuant to the writ
of  execution  issued by  the  trial  court in  Civil  Case   No.  590 is
prohibited under  Sec. 118 of  Commonwealth  Act No. 141; and
whether or not the family home is exempt from execution.
As a result of a judgment in Civil Case No. 590 (for recovery of
property)   in  favor   of   private   respondent,   two  (2)   of   petitioners'
properties  were   levied  to  satisfy  the   judgment  amount  of   about
P5,000.00:   one   was   a   parcel   of   land   located   in   Barrio   Igpit,
Municipality of Opol, Misamis Oriental with an area of about five
(5) hectares, and the other was the family home also located at
Igpit, Opol, Misamis Oriental. The subject properties were sold at
public auction on February 12, 1966 to the private respondent as
the   highest   bidder.   Consequently,   after   petitioners'   failure   to
redeem   the   same,  a   final  deed   of   conveyance   was   executed   on
February 9, 1968, definitely selling, transferring, and conveying
said properties to the private respondent.
To   forestall   such   conveyance,   petitioners   filed   an   action   on
November 5, 1985 (docketed as Civil Case No. 10407) to declare
the deed of conveyance void and to quiet title over the land with a
prayer for a writ of preliminary injunction. In their complaint, it
was  alleged  that   petitioners  are  the   children  and  heirs  of   Pablo
Taneo and Narcisa Valaceras who died on February 12, 1977 and
September 12, 1984, respectively. Upon their death, they left the
subject property covered by OCT No. P­12820 and Free Patent No.
548906. Considering that said property has been acquired through
free patent, such property is therefore inalienable and not subject to
any   encumbrance   for   the   payment   of   debt,   pursuant   to
Commonwealth Act No. 141. Petitioners further alleged that they
that on February 9, 1968. Deputy Provincial Sheriff Jose V. Yasay
issued   a   Sheriffs   Deed   of   Conveyance   in   favor   of   the   private
respondent over the subject property including their family home
which was extrajudicially constituted in accordance with law. As a
the land, thus casting a cloud of doubt over the title and ownership
of petitioners over said property.
Private respondent refuted petitioners' contentions alleging that he
lawfully acquired the subject properties described as Lot No. 5545,
Cad. 237 which was a private land, by virtue of a Sheriffs Sale on
February 12, 1996. Said sale has become final as no redemption
was made   within  one   year  from  the  registration  of  the   Sheriffs
Certificate of Sale. The validity of the sale in favor of Abdon Gilig
was even confirmed by the Court of Appeals in a related case (CA
No.   499965­R)   entitled   "Arriola   v.   Gilig,"   where   one   Rufino
Arriola also claimed ownership over the subject property.
Private   respondent   averred   that   the   subject   land   was   originally
owned   by   Lazaro   Ba­a   who   sold   the   land   to   Pablo   Taneo   on
September   18,   1941,   as   evidenced   by   an   Escritura   de   Venta.
Despite it being a private land, Pablo Taneo filed an application for
free patent which was final only in 1979.
As counterclaim, private respondent alleged that since petitioners
are still in possession of the subject property, he has been deprived
of   acts   of   ownership   and   possession   and   therefore,   prayed   for
payment of rentals from February, 1968 until possession has been
restored to them.
In   its   decision   of   March   27,   1989,   the   RTC   dismissed   the
complaint.
The dispositive portion thereof reads as follows:
Premises considered, Judgment is hereby rendered in favor
of   the   defendant   and   against   the   plaintiffs,   ordering   the
dismissal of the complaint filed by the plaintiffs;
191
a) Declaring OCT No. P­12820 and Free Patent No
548906 both in the name of Pablo Taneo as null
and   void   and   directing   the   Register   of   Deeds   to
cancel the same, without prejudice however on the
part of the defendant to institute legal proceedings
for   the   transfer   of   the   said   title   in   the   name   of
defendant Abdon Gilig;
b) Declaring Abdon Gilig as the absolute and legal
owner of the land covered by OCT No. P­12820,
and covered by Tax Declaration No. 851920, and
hence entitled to the possession of the same and as
a   necessary   concomitant,   admonishing   the
plaintiffs   to   refrain   from   disturbing   the   peaceful
possession   of   the   defendant   over   the   land   in
question.
c) Likewise declaring the defendant Abdon Gilig as
the   true   and   absolute   owner   of   the   house   in
question formerly declared under Tax Declaration
No. 4142 in the name of Pablo Taneo and presently
declared under Tax Declaration No 851916 in the
name of Abdon Gilig; ordering the plaintiffs or any
of   their   representatives   to   vacate   and   return   the
possession of the same to defendant Abdon Gilig;
d)   Ordering   the   plaintiffs,   except   the   nominal
parties herein, to pay to defendant Abdon Gilig the
amount of P500.00 a month as reasonable rental of
the house in question to be reckoned from February
9, 1968 until the possession of the same is returned
to the defendant.
e) To pay to defendant the amount of P5,000.00 as
attorney's fees and to pay the costs.
SO ORDERED. 1
On appeal, the Court of Appeals affirmed in toto the decision of
the RTC.
Hence, this petition.
The petition is devoid of merit.
In   resolving   the   issues,   the   lower   court   made   the   following
findings of fact which this Court finds no cogent reason to disturb:
1. That the land in question originally belonged to
Lazaro Ba­a who sold the same to the late Pablito
(sic)   Taneo   father   of   the   herein   plaintiff   on
September 18, 1941, by virtue of an Escritura de
Venta identified as Reg. Not. 50; pages 53, Foleo
Not. V, Series of 1941 of the Notarial Register of
Ernie Pelaez (Exh. 10);
2. That on July 19, 1951 Abdon Gilig with his wife
filed a Civil Case No. 590 for recovery of property
against Pablo Taneo, et al., wherein Judgment was
rendered on June 24, 1964, in favor of Abdon Gilig
and against Pablo Taneo ordering the latter to pay
damages in the amount of P5,000.00 (Exh. 2);
3.   That   by   virtue   of   said   decision,   a   writ   of
Execution   was   issued   on   November   22,   1965
against   the   properties   of   Pablo   Taneo   and   on
December 1, 1965, a Notice of Levy was executed
by   the   Clerk   of   Court   Pedro   Perez   wherein   the
properties in question were among the  properties
levied by the Sheriff (Exh 3);
4.   That   the   said   properties   were   sold   at   public
auction wherein the defendant Abdon Gilig came
out as the highest bidder and on February 12, 1965,
a Sheriffs Certificate of Sale was executed by Ex­
Oficio Provincial   Sheriff   Pedro   Perez   (Exh.   1)
ceding the said properties in favor of Abdon Gilig
and which Certificate of Sale was registered with
the Register of Deeds on March 2, 1966;
5.   That   for   failure   to   redeem   the   said   property
within   the   reglementary   period,   a   Sheriffs   final
Deed   of   Conveyance   was   executed   by   same
Provincial Sheriff Jose V. Yasay on February 1968,
(Exhs. 4, 4­A) conveying the property definitely to
Abdon Gilig.
6.   That   on   April   20,   1966,   after   his   third­party
claim which he filed with the Sheriff in Civil Case
No. 590 was not given due course, Rufino Arriola
filed   Civil   Case   No.   2667   entitled Arriola   vs.
Abdon   Gilig, et al.,   for   Recovery   of   Property
and/or annulment of Sale with Damages;
7. That Judgment was rendered by the Court thru
Judge   Bernardo   Teves   dismissing   the   case   with
costs on February 21, 1969;
8. That said decision was appealed to the Court of
Appeals   which   affirmed   the   decision   in   toto   on
June 20, 979, declaring the alleged Deed of Sale
executed by Abdon Gilig in favor of the plaintiff as
null and void for being simulated or fictitious and
executed in fraud or (sic) creditors;
9. That on March 7, 1964, Pablo Taneo constituted
the   house   in   question   erected   on   the   land   of
Plutarco Vacalares as a family home (Exh. F) but
was however, notarized only on May 2, 1965 and
registered with the Register of Deeds on June 24,
1966.
10.   That   in   the   meanwhile,   unknown   to   the
defendant, Pablo Taneo applied for a free patent on
the   land   in   question   which   was   approved   on
October 13, 1973, (Exh. B) and the Patent and Title
issued on December 10, 1980 (Oct No. P­12820 ­
Exh. 12);
11. On November 3, 1985, the  plaintiff  filed the
present action. 2
Petitioners contend that under Section 118 of Commonwealth Act
No. 141, the subject land which they inherited from their father
under free patent cannot be alienated or encumbered in violation of
the   law.   Citing   in   particular   the   cases   of Oliveros   v.
Porciongcola 3 and Gonzaga  v.  Court  of  Appeals, 4 the  execution
or   auction   sale   of   the   litigated   land   falls   within   the   prohibited
period  and is.  likewise, a  disavowal of  the  rationale  of  the  law
which   is   to   give   the   homesteader   or   patentee   every   chance   to
preserve for himself and his family the land which the State had
gratuitously given to him as a reward for his labor in cleaning and
cultivating it. 5
192
We are not unmindful of the intent of the law. In fact, in Republic
v. Court of Appeals, 6 the Court elucidated, to wit:
It is well­known that the homestead laws were designed to
distribute disposable agricultural lots of the State to land­
destitute citizens for their home and cultivation. Pursuant to
such   benevolent   intention   the   State   prohibits   the   sale   or
encumbrance   of   the   homestead   (Section   116)   within   five
years after the grant of the patent. After that five­year period
the law impliedly permits alienation of the favor homestead;
but   in   line   with   the   primordial   purpose   to   favor   the
homesteader and his family the statute provides that such
alienation or conveyance (Section 117) shall be subject to
the right of repurchase by the homesteader, his widow of
heirs within five years. This Section 117 is undoubtedly a
complement of Section 116. It aims to preserve and keep in
the family of the homesteader that portion of public land
which  the   State   had  gratuitously   given  to   him.   It  would,
therefore, be in keeping with this fundamental idea to hold,
as we hold, that the right to repurchase exists not only when
the   original   homesteader   makes   the   conveyance,   but   also
when it is made by his widow or heirs. This construction is
clearly deducible from the terms of the statute.
The intent of the law is undisputable but under the facts of the
case, the prohibition invoked by the petitioners under Section 118
does not apply to them.
Sec. 118 of Commonwealth Act No. 141 reads:
Except in favor of the Government or any of its branches,
units   or   institution,   or   legally   constituted   banking
corporations, lands acquired under free patent or homestead
provisions shall not be subject to encumbrance or alienation
from the date of the approval of the application and for a
term of five years from and after the date of issuance of the
patent   or   grant,   nor   shall   they   become   liable   to   the
satisfaction of any debt contracted prior to the expiration of
said period, but the improvements or crops on the land may
be mortgaged or pledged to qualified persons, associations,
or corporations.
x x x           x x x          x x x
The prohibition against alienation of lands acquired by homestead
or   free   patent   commences   on   the   date   of   the   approval   of   the
application for free patent and the five­year period is counted from
the issuance of the patent. The reckoning point is actually the date
of approval of the application. In Amper v. Presiding Judge, 7 the
Court held that:
. . . The date when the prohibition against the alienation of
lands acquired by homesteads or free patents commences is
"the   date   of   the   approval   of   the   application"   and   the
prohibition embraces the entire five­year period "from and
after the date of issuance of the patent or, grant." As stated
in Beniga v. Bugas, (35 SCRA 111), the provision would
make no sense if the prohibition starting "from the date of
the approval of the application" would have no termination
date.
The specific period of five years within which the alienation
or   encumbrance   of   a   homestead   is   restricted   starts   to   be
computed from the date of the issuance of the patent. But
the prohibition of alienation commences from the date the
application   is   approved which   comes   earlier.   (Emphasis
ours.)
Following this ruling, we agree with the respondent court that the
conveyance made by way of the sheriff's sale was not violative of
the law. The judgment obligation of the petitioners against Abdon
Gilig arose on June 24, 1964. The properties were levied and sold
at   public   auction   with   Abdon   Gilig   as   the   highest   bidder   on
February   12,   1966.   On   February   9,   1968,   the   final   deed   of
conveyance ceding the subject property to Abdon Gilig was issued
after   the   petitioners   failed   to   redeem   the   property   after   the
reglementary period. Pablo Taneo`s application for free parent was
approved only on October 19, 1973.
The sequence of the events leads us to the inescapable conclusion
that even before the application for homestead had been approved,
Pablo Taneo was no longer the owner of the land. The deed of
conveyance   issued   on   February   9,   1968   finally   transferred   the
property  to   Abdon  Gilig.   As  of  that  date,  Pablo  Taneo  did  not
actually have transferred to herein petitioners. The petitioners are
not the owners of the land and cannot claim to be such by invoking
Commonwealth Act No. 141. The prohibition does not apply since
it   is   clear   from   the   records   that   the   judgment   debt   and   the
execution sale took place prior to the approval of the application
for free patent. We quote with favor the respondent court's valid
observation on the matter:
. . . the application of Pablo Taneo for a free patent was
approved   only   on   19   October   1973   and   Free   Patent   was
issued   on   10   December   1980.   Under   the   aforecited
provision, the subject land could not be made liable for the
satisfaction   of   any   debt   contracted   from   the   time   of   the
application   and   during   the   5­year   period   following   10
December   1980,   or   until   10   December   1985.   However,
debts contracted prior to the approval of the application for
free patent, that is prior to 18 October 1973, are not covered
by the prohibition. This is because they do not fall within
the scope of the prohibited period. In this case, the judgment
debt in favor of defendant­appellee was rendered on 24 June
1964, the writ of execution issued on 22 November 1965,
notice of levy made on 1 December 1965, the execution sale
held   on   12   February   1966,   and   the   certificate   of   sale
registered   on   2   March   1966,   all   before   Pablo   Taneo's
application   for   free   patent   was   approved   on   19   October
1973.   The   execution,   therefore,   was   not   violative   of   the
law. 8
Anent the second issue, petitioners aver that the house which their
father constituted as family home is exempt from execution. In a
last   ditch   effort   to   save   their   property,   petitioners   invoke   the
benefits accorded to the family home under the Family Code.
A family home is the dwelling place of a person and his family. It
is said, however, that the family home  is a real right, which is
gratuitous, inalienable and free from attachment, constituted over
the   dwelling   place   and   the   land   on   which   it   is   situated,   which
confers upon a particular family the right to enjoy such properties,
which must remain with the person constituting it and his heirs. 9 It
cannot be seized by creditors except in certain specials cases.
Under the Civil Code (Articles 224 to 251), a family home may be
constituted judicial and extrajudicially, the former by the filing of
the petition and with the approval of the proper court, and the latter
by the recording of a public instrument in the proper registry of
property   declaring   the   establishment   of   the   family   home.   The
operative act then which created the family home extrajudicially
was the registration in the Registry of Property of the declaration
prescribed by Articles 240 and 241 of the Civil Code. 10
193
Under   the   Family   Code,   however.   registration   was   no   longer
necessary Article 153 of the Family Code provides that the family
home is deemed constituted on a house and lot from the time it is
occupied in the family. It reads:
The family home is deemed constituted on a house and lot
from the time it is occupied as family residence. From the
time   of   its   constitution   and   so   long   as   its   beneficiaries
actually   resides  therein,  the   family  home  continues  to  be
such   and   is   exempt   from   execution,   forced   sale   or
attachment, except as hereinafter provided and to the extent
of the value allowed by law.
It is under the foregoing provision which petitioners seek refuge to
avert execution of the family home arguing that as early as 1964,
Pablo Taneo had already constituted the house in question as their
family home. However, the retroactive effect of the Family Code,
particularly on the provisions on the family home has been clearly
laid down by the  court as explained in the case of Manacop v.
Court of Appeals 11 to wit:
Finally, the petitioner insists that the attached property is a
family home, having been occupied by him and his family
since 1972, and is therefore exempt from attachment.
The contention is not well­taken.
While   Article   153   of   the   Family   Code   provides   that   the
family home is deemed constituted on a house and lot from
the  time  it  is occupied as a  family  residence, it does not
mean that said article has a retroactive effect such that all
existing family residences, petitioner's included, are deemed
to have been constituted as family homes at the time of their
occupation prior to the effectivity of the Family Code and
henceforth, are exempt from execution for the payment of
obligations   incurred   before   the   effectivity   of   the   Family
Code on August 3, 1988 (Mondequillo vs. Breva, 185 SCRA
766). Neither does Article 162 of said Code state that the
provisions   of   Chapter   2,   Title   V   thereof   have   retroactive
effect. It simply means that all existing family residences at
the time of the effectivity of the Family Code are considered
family homes and are prospectively entitled to the benefits
accorded   to   a   family   home   under   the   Family   Code
(Modequillo vs. Breva, supra). Since petitioner's debt was
incurred as early as November 25, 1987, it preceded the
effectivity of the Family Code. His property is therefore not
 exempt   from   attachment (Annex   "O,"   Plaintiff's   Position
Paper and Memorandum of Authorities, p. 78)." (pp. 5­6,
Decision; pp. 64­65, Rollo) (emphasis ours)
The applicable law, therefore. in the case at bar is still the Civil
Code where registration of the declaration of a family home is a
prerequisite. Nonetheless, the law provides certain instances where
the family home is not exempted from execution, forced sale or
attachment.
understood   that   the   house   should   be   constructed   on   a
land not belonging   to   another.   Apparently,   the   constitution   of   a
family home by Pablo Taneo in the instant case was merely an
afterthought in order to escape execution of their property but to no
avail.
WHEREFORE, the petition is DENIED for lack of merit.
SO ORDERED.

Art. 243 reads: Davide, Jr., C.J., Melo and Pardo, JJ., concur.

The   family   home   extrajudicially   formed   shall   be   exempt

from execution, forced sale or attachment, except:

(1) For nonpayment of taxes;

(2) For debts incurred before the declaration was recorded
in the Registry of Property;

(3) For debts secured by mortgages on the premises before
or after such record of the declaration;

(4)   For   debts   due   to   laborers,   mechanics,   architects,

builders,   material­men   and   others   who   have   rendered
service   or   furnished   material   for   the   construction   of   the
building. 12

The   trial   court   found   that   on   March   7,   1964,   Pablo   Taneo

constituted the house in question, erected on the land of Plutarco
Vacalares,   as   the   family   home.   The   instrument   constituting   the
family home was registered only on January 24, 1966. The money
judgment against Pablo Taneo was rendered on January 24, 1964.
Thus, at that time when the "debt" was incurred, the family home
was   not   yet   constituted   or   even   registered.   Clearly,   petitioners'
alleged family home, as constituted by their father is not exempt as
it falls under the exception of Article 243 (2).

Moreover, the constitution of the family home by Pablo Taneo is
even doubtful considering that such constitution did not comply
with the requirements of the law. The trial court found that the
house was erected not on the land which the Taneos owned but on
the land of one Plutarco Vacalares. By the very definition of the
law that the "family home is the dwelling house where a person
and his family resides and the land on which it is situated," 13 it is
194
 Republic of the Philippines as a public road and as there were many discrepancies in the areas Supreme Court issued a Resolution denying the petition for late
SUPREME COURT occupied,   it   was   then   discovered   that   defendant­appellees   were filing and lack of appropriate service.
Manila actually occupying Lot No. 7777.
Subsequently,   or   on   February   15,   2000,   the   Supreme   Court
THIRD DIVISION On June 23, 1992, plaintiff­appellants filed a Complaint docketed Resolution had become final and executory.
as   Civil   Case   No.   92­20­127   for   Recovery   of   Property   against
G.R. No. 180587               March 20, 2009 Consequently, the case was remanded to the court a quo and the
defendant­appellees.
latter   commissioned   the   Municipal   Assessor   of   Molave,
SIMEON CABANG, VIRGINIA CABANG and VENANCIO  On   July   19,   1996,   the   trial   court   rendered   its   decision,   the Zamboanga del Sur to determine the value of the improvements
CABANG ALIAS "DONDON", Petitioners, dispositive portion of which reads, thus: introduced by the defendant­appellees.
vs.
WHEREFORE,   judgment   is   hereby   rendered   in   favor   of   the The Commissioner’s Report determined that at the time of ocular
MR. & MRS. GUILLERMO BASAY, Respondents.
defendants and against the plaintiff – inspection, there were three (3) residential buildings constructed on
D E C I S I O N the property in litigation. During the ocular inspection, plaintiff­
1. Holding that the rights of the plaintiffs to recover the
appellants’   son, Gil  Basay, defendant­appellee  Virginia  Cabang,
YNARES­SANTIAGO, J.: land   registered   in   their   names,   have   been   effectively
and one Bernardo Mendez, an occupant of the lot, were present. In
barred by laches; and
This petition for review on certiorari under Rule 45 of the Rules of the report, the following appraised value of the improvements were
Court seeks to annul and set aside the Decision of the Court of 2. Ordering the dismissal of the above­entitled case. determined, thus:
Appeals in CA­G.R. CV No. 767551 dated May 31, 20072 which
No pronouncement as to cost.
reversed   the   Order3 of   the   Regional   Trial   Court   of   Molave, Area Appraised
Owner Lot No. Improvement
Zamboanga Del Sur, Branch 23 in Civil Case No. 99­20­127 which SO ORDERED. (sq.m.) Value
denied   respondents’   motion   for   execution   on   the   ground   that
Aggrieved, plaintiff­appellants filed an appeal before the Court of
petitioners’ family home was still subsisting. Also assailed is the
Appeals assailing the above­decision. Said appeal was docketed as Virginia Cabang 7777 32.55 Building P21,580.65
Resolution   dated   September   21,   2007   denying   the   motion   for
CA­G.R. CV No. 55207.
reconsideration.
On December 23, 1998, the Court of Appeals, through the then
The facts as summarized by the appellate court: Jovencio Capuno 7777 15.75 Building 18,663.75
Second   Division,   rendered   a   Decision   reversing   the   assailed
Deceased Felix Odong was the registered owner of Lot No. 7777, decision and decreed as follows:
Ts­   222   located   in   Molave,   Zamboanga   del   Sur.   Said   lot   was Amelito Mata 7777 14.00 Building 5,658.10
WHEREFORE,   the   judgment   herein   appealed   from   is   hereby
covered by Original Certificate of Title No. 0­2,768 pursuant to
REVERSED,   and   judgment   is   hereby   rendered   declaring   the
Decree No. N­64 and issued on March 9, 1966. However, Felix
plaintiffs­appellants   to   be   entitled   to   the   possession   of   Lot   No. Toilet 1,500.00
Odong and his heirs never occupied nor took possession of the lot.
7777   of   the   Molave   Townsite,   subject   to   the   rights   of   the
On June  16, 1987, plaintiff­appellants bought said real property defendants­appellees under Article (sic) 448, 546, 547 and 548 of Plants   &
2,164.00
from the heirs of Felix Odong for P8,000.00. Consequently, OCT the New Civil Code. Trees
No. 0­2,768 was cancelled and in its stead, Transfer Certificate of
The records of this case are hereby ordered remanded to the court
Title No. T­22,048 was issued on August 6, 1987 in the name of
of   origin   for   further   proceedings   to   determine   the   rights  of   the
plaintiff­appellants.   The   latter   also   did   not   occupy   the   said P49,566.50
defendants­appellees under the aforesaid article (sic) of the New TOTAL
property.
Civil Code, and to render judgment thereon in accordance with the
Defendant­appellees, on the other hand, had been in continuous, evidence and this decision. Thereafter, upon verbal request of defendant­appellees, the court a
open, peaceful and adverse possession of the same parcel of land quo in its Order declared that the tie point of the survey should be
No pronouncement as to costs. the BLLM (Bureau of Lands Location Monument) and authorized
since   1956   up   to   the   present.   They   were   the   awardees   in   the
cadastral proceedings of Lot No. 7778 of the Molave Townsite, Ts­ SO ORDERED. the official surveyor of the Bureau of Lands to conduct the survey
222.   During   the   said   cadastral   proceedings,   defendant­appellees of the litigated property.
claimed Lot No. 7778 on the belief that the area they were actually Defendant­appellees   thereafter   filed   a   petition   for   review   on
certiorari under Rule 45 of the Rules of Court before the Supreme Pursuant   to   the   above   Order,   the   Community   Environment   and
occupying was Lot No. 7778. As it turned out, however, when the
Court  docketed as G.R. No. 139601. On October  18, 1999, the Natural   Resources   Office   (CENRO)   of   the   Department   of
Municipality of Molave relocated the townsite lots in the area in
Environment   and   Natural   Resources   (DENR)­Region   XI
1992 as a big portion of Lot No. 7778 was used by the government
195
designated Geodetic Engineer Diosdado L. de Guzman to [act] as
the official surveyor. On March 2002, Engr. De Guzman submitted
his survey report which stated, inter alia:
1. That on September 18, 2001, the undersigned had
conducted verification survey of Lot 7777, Ts­222 and
the   adjacent   lots   for   reference   purposes­with   both
parties present on the survey;
2.   That   the   survey   was   started   from   BLLM   #34,   as
directed by the Order, taking sideshots of lot corners,
existing concrete fence, road and going back to BLLM
#34, a point of reference;
3. Considering that there was only one BLLM existing
on the ground, the undersigned conducted astronomical
observation on December 27, 2001 in order to check the
carried Azimuth of the traverse;
4. That per result of the survey conducted, it was found
out   and   ascertained   that   the   area   occupied   by   Mrs.
Virginia   Cabang   is   a   portion   of   Lot   7777,   with   lot
assignment to be known as Lot 7777­A with an area of
303   square   meters   and   portion   of   Lot   7778   with   lot
assignment to be known as Lot 7778­A with an area of
76 square meters. On the same lot, portion of which is
also   occupied   by   Mr.   Bernardo   Mendez   with   lot
assignment to be known as Lot 7777­B with an area of
236 square meters and Lot 7778­B with an area of 243
square meters as shown on the attached sketch for ready
reference;
5.   That   there   were   three   (3)   houses   made   of   light
material erected inside Lot No. 7777­A, which is owned
by   Mrs.   Virginia   Cabang   and   also   a   concrete   house
erected both on portion of Lot No. 7777­B and Lot No.
7778­B, which is owned by Mr. Bernardo Mendez. x x
x;
6.   That   the   existing   road   had   been   traversing   on   a
portion of Lot 7778 to be know (sic) as Lot 7778­CA­
G.R.   SP   No.   with   an   area   of   116   square   meters   as
shown on attached sketch plan.
During the hearing on May 10, 2002, plaintiff­appellants’ offer to
pay P21,000.00 for the improvement of  the  lot in question was
rejected   by   defendant­appellees.   The   court   a   quo   disclosed   its
difficulty in resolving whether or not the houses may be subject of
an order of execution it being a family home.
On June 18, 2002, plaintiff­appellants filed their Manifestation and
Motion   for   Execution   alleging   therein   that   defendant­appellees
refused to accept payment of the improvements as determined by
the   court   appointed   Commissioner,   thus,   they   should   now   be
ordered to remove said improvements at their expense or if they
refused, an Order of Demolition be issued.
On September 6, 2002, the court a quo issued the herein assailed
Order denying the motion for execution.4
Respondents thereafter elevated their cause to the appellate court
which reversed the trial court in its May 31, 2007 Decision in CA­
G.R. CV No. 76755. Petitioners’ Motion for Reconsideration was
denied by the Court of Appeals in its Resolution 5 dated September
21, 2007.
Hence, this petition.
Petitioners insist that the property subject of the controversy is a
duly constituted family home which is not subject to execution,
thus, they argue that the appellate tribunal erred in reversing the
judgment of the trial court.
The petition lacks merit.
It bears stressing that the purpose for which the records of the case
were remanded to the court of origin was for the enforcement of
the appellate court’s final and executory judgment 6 in CA­G.R. CV
No.   55207   which,   among   others,   declared   herein   respondents
entitled to the possession of Lot No. 7777 of the Molave Townsite
subject to the provisions of Articles 448,7 546,8 5479 an 54810 of the
Civil Code. Indeed, the decision explicitly decreed that the remand
of   the   records   of   the   case   was   for   the   court   of   origin   "[t]o
determine   the   rights   of   the   defendants­appellees   under   the
aforesaid article[s] of the New Civil Code, and to render judgment
thereon in accordance with the evidence and this decision."
A final and executory judgment may no longer be modified in any
respect,   even   if   the   modification   is   meant   to   correct   erroneous
conclusions of fact or law and whether it will be made by the court
that   rendered   it   or   by   the   highest   court   in   the   land. 11 The   only
exceptions to this rule are the correction of (1) clerical errors; (2)
the so­called nunc pro tunc entries which cause no prejudice to any
party, and (3) void judgments.12
Well­settled is the rule that there can be no execution until and
unless the judgment has become final and executory, i.e. the period
of   appeal   has   lapsed   without   an   appeal   having   been   taken,   or,
having been taken, the appeal has been resolved and the records of
the case have been returned to the court of origin, in which event,
execution   shall   issue   as   a   matter   of   right.13 In   short,   once   a
196
judgment becomes final, the winning party is entitled to a writ of
execution and the issuance thereof becomes a court’s ministerial
duty.14
Furthermore,   as   a   matter   of   settled   legal   principle,   a   writ   of
execution   must   adhere   to   every   essential   particulars   of   the
judgment sought to be executed.15 An order of execution may not
vary or go beyond the terns of the judgment it seeks to enforce.16 A
writ   of   execution   must   conform   to   the   judgment   and   if   it   is
different from, goes beyond or varies the tenor of the judgment
which gives it life, it is a nullity.17 Otherwise stated, when the order
of execution and the corresponding writ issued pursuant thereto is
not in harmony with and exceeds the judgment which gives it life,
they have pro tanto no validity18 – to maintain otherwise would be
to ignore the constitutional provision against depriving a person of
his property without due process of law.19
As aptly pointed out by the appellate court, from the inception of
Civil Case No. 99­20­127, it was already of judicial notice that the
improvements introduced by petitioners on the litigated property
are   residential   houses   not   family   homes.   Belatedly   interposing
such an extraneous issue at such a late stage of the proceeding is
tantamount to interfering with and varying the terms of the final
and executory judgment and a violation of respondents’ right to
due process because –
As a general rule, points of law, theories and issues not brought to
the attention of the trial court cannot be raised for the first time on
appeal. For a contrary rule would be unfair to the adverse party
who   would   have   no   opportunity   to   present   further   evidence
material to the new theory, which it could have done had it been
aware   of   if   at   the   time   of   the   hearing   before   the   trial
court.20lawphil.net
The refusal, therefore, of the trial court to enforce the execution on
the   ground   that   the   improvements   introduced   on   the   litigated
property are family homes goes beyond the pale of what it had
been expressly tasked to do, i.e. its ministerial duty of executing
the   judgment   in   accordance   with   its   essential   particulars.   The
foregoing   factual,   legal   and  jurisprudential   scenario   reduces   the
raising of the issue of whether or not the improvements introduced
by petitioners are family homes into a mere afterthought.
Even   squarely   addressing   the   issue   of   whether   or   not   the
improvements   introduced  by   petitioners   on  the   subject   land  are
family homes will not extricate them from their predicament.
As defined, "[T]he family home is a sacred symbol of family love
and is the repository of cherished memories that last during one’s
lifetime.21 It is the dwelling house where the husband and wife, or
an unmarried head of a family reside, including the land on which All told, it is too late in the day for petitioners to raise this issue.
it is situated.22 It is constituted jointly by the husband and the wife Without doubt, the instant case where the family home issue has
or by an unmarried head of a family." 23 Article 153 of the Family been   vigorously   pursued   by   petitioners   is   but   a   clear­cut   ploy
Code provides that – meant   to   forestall   the   enforcement   of   an   otherwise   final   and
executory decision. The execution of a final judgment is a matter
The   family   home   is   deemed   constituted   from   the   time   it   is
of right on the part of the prevailing party whose implementation is
occupied as a family residence. From the time of its constitution
mandatory   and   ministerial   on   the   court   or   tribunal   issuing   the
and so long as any of its beneficiaries actually resides therein, the
judgment.30
family home continues to be such and is exempt from execution,
forced sale or attachment except as hereinafter provided and to the The most important phase of any proceeding is the execution of
extent of the value allowed by law. judgment.31 Once a judgment becomes final, the prevailing party
should   not,   through   some   clever   maneuvers   devised   by   an
The actual value of the family home shall not exceed, at the time of
unsporting   loser,   be   deprived   of   the   fruits   of   the   verdict.32 An
its   constitution,   the   amount   of   P300,000.00   in   urban   areas   and
unjustified delay in the enforcement of a judgment sets at naught
P200,000.00 in rural areas.24 Under the afore­quoted provision, a
the   role   of   courts   in   disposing   of   justiciable   controversies   with
family home is deemed constituted on a house and a lot from the
finality.33 Furthermore, a judgment if not executed would just be an
time   it   is   occupied   as   a   family   residence.   There   is   no   need   to
empty victory for the prevailing party because execution is the fruit
constitute the same judicially or extra­judicially.25
and end of the suit and very aptly called the life of the law.34
There can be no question that a family home is generally exempt
The issue is moreover factual and, to repeat that trite refrain, the
from execution,26 provided it  was duly constituted as such. It is
Supreme Court is not a trier of facts. It is not the function of the
likewise   a   given   that   the   family   home   must   be   constituted   on
Court   to   review,   examine   and   evaluate   or   weigh   the   probative
property owned by the persons constituting it. Indeed as pointed
value of the evidence presented. A question of fact would arise in
out in Kelley, Jr. v. Planters Products, Inc. 27 "[T]he family home
such event. Questions of fact cannot be  raised in an appeal via
must be part of the properties of the absolute community or the
certiorari   before   the   Supreme   Court   and   are   not   proper   for   its
conjugal partnership, or of the exclusive properties of either spouse
consideration.35 The rationale behind this doctrine is that a review
with the latter’s consent, or on the property of the unmarried head
of the findings of fact of the appellate tribunal is not a function this
of the family."28 In other words:
Court normally undertakes. The Court will not weigh the evidence
The family home must be established on the properties of (a) the all over again unless there is a showing that the findings of the
absolute   community,   or   (b)   the   conjugal   partnership,   or   (c)   the lower court are totally devoid of support or are clearly erroneous
exclusive property of either spouse with the consent of the other. It so as to constitute serious abuse of discretion. 36 Although there are
cannot be established on property held in co­ownership with third recognized   exceptions37 to   this   rule,   none   exists   in   this   case   to
persons.   However,   it   can   be   established   partly   on   community justify a departure therefrom.
property, or conjugal property and partly on the exclusive property
WHEREFORE, the petition is DENIED. The Decision of the Court
of either spouse with the consent of the latter.1avvphi1
of   Appeals   dated   May   31,   2007   in   CA­G.R.   CV   No.   76755
If constituted by an unmarried head of a family, where there is no declaring respondents entitled to the writ of execution and ordering
communal or conjugal property existing, it can be constituted only petitioners to vacate the subject property, as well as the Resolution
on his or her own property.29 (Emphasis and italics supplied) dated September 21, 2007 denying the motion for reconsideration,
are AFFIRMED. Costs against petitioners.
Therein lies the fatal flaw in the postulate of petitioners. For all
their arguments to the contrary, the stark and immutable fact is that SO ORDERED.
the property on which their alleged family home stands is owned
CONSUELO YNARES­SANTIAGO
by respondents and the question of ownership had been long laid to
Associate Justice
rest with the finality of the appellate court’s judgment in CA­G.R.
CV  No. 55207. Thus, petitioners’ continued stay on the subject
land is only by mere tolerance of respondents.

197
198
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 186322               July 08, 2018
ENRICO S EILOGIO and NATIVIDAD V.  bind   the   property   in   question   for   being  violative   of
EULOGIO, Petitioners,
vs.
PATERNO C BELL, SR., ROGELIA CALINGASAN­BELL,  court’s Decision was affirmed en toto. Spouses Bell later brought
PATERNO WILLIAM BELL, JR., FLORENCE FELICIA  the case to this Court to question their liability to petitioners in the
VICTORIA BELL, PATERNO FERDINAND BELL III, and  amount of  1 million plus interest. The Court, however, dismissed
PATERNO BENERAÑO BELL IV, Respondents.
D E C I S I O N
SERENO, CJ.:
This is a Petition for Review on Certiorari assailing the Court of
Appeals (CA) Decision in CA­G.R. SP No. 87531 which granted
the Petition for Certiorari filed by respondents and enjoined the
execution   sale   of   their   family   home   for   the   satisfaction   of   the
money judgment awarded to petitioners in Civil Case No. 4581,
and   the   Resolution   which   denied   petitioners'   Motion   for
Reconsideration.
ANTECEDENT FACTS
Respondents Paterno William Bell, Jr., Florence Felicia Victoria
Bell,  Paterno Ferdinand  Bell  III, and Paterno Beneraño IV  (the
Bell siblings) are the  unmarried children of  respondent Spouses
Paterno C.  Bell  and  Rogelia  Calingasan­Bell  (Spouses Bell).  In
1995,   the   Bell   siblings   lodged   a   Complaint   for   annulment   of
documents,  reconveyance,  quieting   of  title   and  damages  against
petitioners   Enrico   S.   Eulogio   and   Natividad   Eulogio   (the
Eulogios). It was docketed as Civil Case No. 4581 at the Regional
Trial Court (RTC) of Batangas City, Branch 84. The Complaint
sought the annulment of the contract of sale executed by Spouses
Bell over their 329­ square­meter residential house and lot, as well
as the cancellation of the title obtained by petitioners by virtue of
the Deed. 
The RTC granted respondents’ prayers, but declared Spouses Bell
liable to petitioners in the amount of  1 million plus 12% interest
per annum. The dispositive portion of the Decision dated 15 July
1998 reads as follows:
WHEREFORE,   prescinding   from   all   the   foregoing,   the
Court hereby declares:  issue a tax declaration covering the said subject property as
1. That the sale of the subject house and lot under Deed
of   Sale   marked  as  Exhibit   “F”   is   only   an   equitable
mortgage  in  favor  of  the  defendants Enrico Eulogio
and Natividad Eulogio. However, the mortgage cannot
Chapter   2,   Title   4   of   the   Family   Code,   its
encumbrance not having been consented to in writing
by a majority of the beneficiaries who are the plaintiffs
herein; 
2. The   said   equitable   mortgage   is   deemed   to   be   an
unsecured   mortgage   [sic]   for   which   the   Spouses
Paterno C. Bell, Sr. and Rogelia Calingasan Bell as
mortgagors are liable to the defendants­spouses Enrico
Eulogio   and   Natividad   Eulogio   in   the   amount   of  ­
1,000,000 plus interest of 12% per annum. However,
under   the   Fourth   Party   Complaint   Sps.   Paterno   C.
Bell, Sr. and Rogelia Calingasan Bell have the right of
reimbursement from fourth party defendants Nicolas
Moraña and Julieta Moraña for whom their loan of  ­
1,000,000 was secured by Sps. Paterno C. Bell, Sr. and
Rogelia Calingasan Bell. Accordingly, the fourth party
defendants   Nicolas   Moraña   and   Julieta   Moraña   are
hereby ordered to reimburse Paterno C. Bell, Sr. and
Rogelia   Calingasan   Bell   the   loan   of  1,000,000   plus
interest of 12% per annum to be paid by the latter to
defendants Enrico and Natividad Eulogio;  for 1million.
3. The house and lot in question is free from any and all
encumbrances by virtue of said equitable mortgage or
the purported sale; and  also appointed a Board of Appraisers to conduct a study on the
4. The Deed of Sale (Exhibit “F”) is null and void for
being contrary to law and public policy. 
Accordingly, (1) the Register of Deeds of Batangas City is
hereby ordered to cancel Transfer Certificate of Title No. T­
131472 in the name  of defendants Enrico S. Eulogio and
Natividad   Eulogio   and   to   reconstitute   (sic)   Transfer
Certificate of Title No. RT­680­(5997) as “family home” of
the   plaintiffs   Florence   Felicia   Victoria   C.   Bell,   Paterno
William C. Bell Jr., Paterno Ferdinand C. Bell III, Paterno
Beneraño C. Bell IV and fourth party plaintiffs Paterno C.
Bell Sr. and Rogelia Calingasan Bell; or in the alternative to
issue   a   new   Transfer   Certificate   of   Title   under   the   same
tenor;
199
2. The City Assessor of Batangas City is hereby directed to
family home for the said plaintiffs and fourth party plaintiffs
Paterno C. Bell and Rogelia Calingasan Bell; and 
3.   Defendants   Enrico   Eulogio   and   Natividad   Eulogio   are
ordered to pay the  plaintiffs attorney’s fees and litigation
expenses of 35,000.00, as the plaintiffs have been compelled
to litigate to protect their property rights, and costs.
Both petitioners and respondents appealed to the CA, but the trial
their Petition for failure to show any reversible error committed by
the CA.4 Thereafter, entry of judgment was made.
On 9 June 2004 the RTC issued a Writ of Execution, as a result of
which respondents’ property covered by the newly reconstituted
Transfer Certificate of Title (TCT) No. 54208 [formerly RT­680
(5997)] was levied on execution. Upon motion by respondents, the
trial court, on 31 August 2004, ordered the lifting of the writ of
execution on the ground that the property was a family home.
Petitioners filed a Motion for Reconsideration of the lifting of the
writ of execution. Invoking Article 160 of the Family Code, they
posited that the current market value of the property exceeded the
statutory   limit   of  300,000   considering   that   it   was   located   in   a
commercial area, and that Spouses Bell had even sold it to them
 
The   RTC,   on   13   October   2004,   set   the   case   for   hearing   to
determine the present value of the family home of respondents. It
prevailing market value of their house and lot.
Respondents   sought  reconsideration   of   the   above   directives  and
asked the RTC to cite petitioners for contempt because of forum­
shopping.   They   argued   that   petitioners’   bid   to   determine   the
present value of the subject property was just a ploy to re­litigate
an issue that had long been settled with finality.
The   RTC,   however,   denied   the   Motion   for   Reconsideration   of
respondents and directed the commissioners to canvass prospective
buyers of their house and lot.
On 23 November 2004, respondents filed a Petition for Certiorari
and Injunction before the CA, where it was docketed as CA­G.R.
SP No. 87531.
Subsequently,  the  RTC   issued  on  25  November  2004  an  Order
dispensing   with   the   valuation   report   of   the   commissioners   and
directing   the   issuance   of   a   writ   of   execution.   Consequently,
respondents filed before the CA a Supplemental Petition with an
urgent prayer for a temporary restraining order.
The CA eventually enjoined the execution sale set on 22 December
2004 by the RTC.
On   31   July   2008,   the   CA   rendered   its   Decision   granting
respondents’ Petition for Certiorari, but it rejected their theory that
res judicata had already set in.
The   appellate   court   ruled   that   the   RTC   Decision,   which   had
become final and executory, only declared respondents’ house and
lot as a family home. Since the issue of whether it may be sold in
execution   was   incidental   to   the   execution   of   the   aforesaid
Decision, there was as yet no res judicata. 
Still, the CA found that the trial court committed grave abuse of
discretion in ordering the execution sale of the subject family home
after finding that its present value exceeded the statutory limit. The
basis   for   the   valuation   of   a   family   home   under   Article   160,
according to the appellate court, is its actual value at the time of its
constitution and not the market/present value; therefore, the trial
court’s order was contrary to law.
On   09   February   2009,   the   CA   denied   petitioners’   Motion   for
Reconsideration. Hence, this Petition.
ISSUES
The issues to be resolved are: (1) whether petitioners are guilty of
forum­shopping; (2) whether a hearing to determine the value of
respondents’ family home for purposes of execution under Article
160   of   the   Family   Code   is   barred   under   the   principle   of   res
judicata; and (3) whether respondents’ family home may be sold
on execution under Article 160 of the Family Code.
THE COURT’S RULING
The Court denies the Petition for lack of merit.
Petitioners are not guilty of forumshopping.
Forum  shopping  can  be   committed in  three  ways:  (1)  by  filing
multiple cases based on the same cause of action and with the same
prayer, the previous case not having been resolved yet (where the
ground for dismissal is litis pendentia); (2) by filing multiple cases
based on the same cause of action and with the same prayer, the
previous case having been finally resolved (where the ground for
dismissal is res judicata); and (3) by filing multiple cases based on
the same cause of action but with different prayers, or by splitting
of causes of action (where the ground for dismissal is also either
litis pendentia or res judicata).
The   essence   of   forum   shopping   is   the   filing   of   multiple   suits
involving   the   same   parties   for   the   same   cause   of   action,   either
simultaneously   or   successively,   for   the   purpose   of   obtaining   a
favorable   judgment   through   means   other   than   by   appeal   or
certiorari.  Forum shopping does not apply to cases that arise from
an initiatory or original action that has been elevated by way of
appeal or certiorari to higher or appellate courts or authorities. This
is so because the issues in the appellate courts necessarily  differ
from those in the lower court, and the appealed cases are but a
continuation of the original case and treated as only one case.
Respondents contend that the Decision in Civil Case No. 4581,
which declared that property in dispute was a family home, had
long   attained   finality.   Accordingly,   respondents   maintain   that
petitioners’ bid to re­litigate the present value of the property in the
course of the execution proceedings is barred by res judicata, and
that petitioners should be cited for contempt of court because of
forum­shopping.
Recall that although the trial court had nullified the Deed of Sale
over respondents’ family home in Civil Case No. 4581 for lack of
a written consent from its beneficiaries as required under Article
158 of the Family Code, the court still recognized the validity of
the transaction as an unsecured loan. Hence, it declared Spouses
Bell   liable   to   petitioners   in   the   amount   of  1   million   plus   12%
interest per annum. 
Petitioners’ bid to satisfy the above judgment cannot be considered
an act of forum shopping. Simply, the execution of a decision is
just the fruit and end of a suit and is very aptly called the life of the
law. It is not separate from the main case. Similarly, the filing of
the instant Petition as a continuation of the execution proceedings
does   not   constitute   forum   shopping.   Seeking   a   reversal   of   an
adverse   judgment   or   order   by   appeal   or   certiorari   does   not
constitute   forum   shopping.   Such   remedies   are   sanctioned   and
provided for by the rules.
Indeed, as will be presently discussed, the causes of action in the
main   proceedings   in   Civil   Case   No.   4581   and   the   consequent
execution proceedings are identical. Suffice it to say, however, that
the danger of a multiplicity of suits upon one and the same cause
of action, which the judicial policy against forum shopping seeks
to prevent, does not exist in this case.
Re­litigating the issue of the value of respondents’ family home
is barred by res judicata.
200
Res   judicata  (meaning,   a   “matter   adjudged”)   is   a   fundamental
principle   of   law   that   precludes   parties   from   re­litigating   issues
actually litigated and determined by a prior and final judgment.
Under   the   1997   Rules   of   Court,   there   are   two   aspects   of   res
judicata,   namely:   bar   by   prior   judgment   and   conclusiveness   of
judgment.
There is “bar by prior judgment” when, as between the first case in
which the judgment has been rendered and the second case that is
sought to be barred, there is an identity of parties, subject matter,
and causes of action. In this instance, the judgment in the first case
constitutes an absolute bar to the second action. The judgment or
decree   on   the   merits   of   the   court   of   competent   jurisdiction
concludes the litigation between the parties, as well as their privies,
and constitutes a bar to a new action or suit involving the same
cause of action before the same or any other tribunal.
On the other hand, there is “conclusiveness of judgment” where
there is an identity of parties in the first and second cases, but no
identity of causes of action. Under this rule, the first judgment is
conclusive   only   as   to   those   matters   actually   and   directly
controverted and determined and not as to matters merely involved
therein.   Stated   differently,   any   right,   fact,   or   matter   in   issue
directly adjudicated  or necessarily involved  in the determination
of   an   action   before   a   competent   court   in   which   judgment   is
rendered   on   the   merits   is   conclusively   settled   by   the   judgment
therein and cannot again be litigated between the parties and their
privies   whether   or   not   the   claim,   demand,   purpose,   or   subject
matter of the two actions is the same.
In this case, the trial court’s final decision in Civil Case No. 4581
bars petitioners’ move to have the property in dispute levied on
execution. 
There is no question that the main proceedings in Civil Case No.
4581 and the subsequent execution proceedings involved the same
parties and subject matter. For  these  reasons, respondents argue
that the execution sale of the property in dispute under Article 160
of the Family Code is barred by res judicata, since the trial court
has already determined that the value of the property fell within the
statutory limit.
The CA held that the trial court’s Decision, which is indisputably
final, only settled the issue of whether the property in dispute was
a family home. The CA ruled thus:
We rule that there is no res judicata. 
At the outset, let it be emphasized that the decision of
the trial court dated July 15, 1998, which has become
 final and executory, only declares the subject property
as   a   family   home.   As   a   matter   of   fact,   private
respondents   never   questioned   that   such   property   is   a
family home, and consequently, the issue as to whether
or not the property is family home  is settled and res
judicata lies only with respect to this issue.  proceedings   was   the   Deed   of   Sale,   which   the   trial   court   had
But the issue as to whether or not a family home could
be the subject of an execution sale was not resolved by
the   trial   court.   This   issue[was]   raised   only   when   the
writ   of   execution   was   issued   and   hence,   [was   not]
resolved with finality. Thus, the issue before this Court
is   whether   or   not   the   [f]amily   [h]ome   of   petitioners
under the facts and circumstances of the case could be
the  subject  of  a  writ  of  execution and sold at public
auction.
 The Court disagrees with the CA.
“Cause of action” is the act or omission by which a party violates
the right of another. It may be argued that the cause of action in the
main proceedings was the sale of the property in dispute, while in
the execution proceedings it was the indebtedness of Spouses Bell
to petitioners. 
The settled rule, however, is that identity of causes of action does
not mean absolute identity. Otherwise, a party could easily escape
the operation of res judicata by changing the form of the action or
the   relief   sought.   The   test   to   determine   whether   the   causes   of
action are identical is to ascertain whether the same evidence will
sustain both actions, or whether there is an identity of the facts
essential to the maintenance of the two actions. If the same facts or
evidence would sustain both, the two actions are considered the
same,   and   a   judgment   in   the   first   case   would   be   a   bar   to   the
subsequent action. Hence, a party cannot, by varying the form of
action   or   adopting   a   different   method   of   presenting   the   case,
escape the operation of the principle that one and the same cause of
action shall not be twice litigated between the same parties or their
privies.
Among several tests resorted to in ascertaining whether two suits
relate to a single or common cause of action are: (1) whether the
same evidence would support and sustain both the first and the
second causes of action; and (2) whether the defenses in one case
may   be   used   to   substantiate   the   complaint   in   the   other.   Also
fundamental is the test for determining whether the cause of action
in   the  second  case   existed  at  the  time  of   the   filing  of   the   first
complaint.
Applying the above guidelines, the Court finds that the entirety of
Civil Case No. 4581 – including the bid of petitioners to execute
the   money   judgment   awarded   to   them   by   the   trial   court   –   is
founded on a common cause of action. Records show that the sole
evidence   submitted   by   petitioners   during   the   execution
nullified in the main proceedings. Concomitantly, the very same
defense raised by petitioners in the main proceedings, i.e., that they
had bought the property from Spouses Bell for  1 million – was
utilized   to   substantiate   the   claim   that   the   current   value   of
respondents’ family home was actually 1 million. In fact, the trial
court’s   order   for   respondents’   family   home   to   be   levied   on
execution was solely based on the price stated in the nullified Deed
of Sale. 
Res judicata applies, considering that the parties are litigating over
the same property. Moreover, the same contentions and evidence
advanced   by   the   petitioners   to   substantiate   their   claim   over
respondents’ family home have already been used to support their
arguments in the main proceedings. 
Any lingering doubt on the application of res judicata to this case
should be put to rest by the trial court’s discussion of the nature
and alienability of the property in dispute, to wit:
The second issue is about the allegation of the plaintiffs
that the family home which has been constituted on the
house and lot in question is exempt from alienation and
that its value does not exceed 300,000. Paterno Bell, Sr.
testified that the two­storey house was built in 1947 and
was made of wood and hollow blocks. He inherited it in
1976 from his parents and has been living there with his
family. In 1976, when an extrajudicial settlement was
made of the estate of his parents, the fair market value
of the house was 70,000.
City Assessor Rodezinda Pargas testified and presented
Tax   Declaration   and   others,   (Exhibit   “J”,   Tax
Declaration No. 005­047) beginning 1985 showing that
the subject lot with an area of 329 sq. m. had a fair
market   value   of  76,000.00   and   the   residential   house
located   thereon   of  50,000.00,   for   a   total   value   of  ­
126,000.00. She testified that during the prior years the
assessed values were lower. This shows that the limit of
the value of 300,000.00 under Article 157, Title 5 of the
Family Code has not been exceeded. The testimonies of
the plaintiffs who are children of Sps. Paterno Bell, Sr.
and Rogelia Calingasan Bell show that they had lived in
that house together with their said parents. The Court
201
therefore concludes that the said house is a family home
under   Chapter   2,   Title   5   of   the   Family   Code.   Its
alienation   by   the   said   Spouses   without   the   written
consent of the majority of the children/plaintiffs is null
and void for being contrary to law and public policy as
enunciated   in   Art.   158   of   the   Family   Code.
[Underscoring supplied]
The foregoing points plainly show that the issue of whether the
property  in   dispute   exceeded  the   statutory  limit  of  300,000  has
already been determined with finality by the trial court. Its finding
necessarily   meant   that   the   property   is   exempt   from   execution.
Assuming for the sake of argument that causes of action in the
main proceedings and in the execution proceedings are different,
the   parties   are   still   barred   from   litigating   the   issue   of   whether
respondents’ family home may be sold on execution sale under the
principle of conclusiveness of judgment.
Respondents’ family home cannot be  sold on execution under
Article 160 of the Family Code.
Unquestionably,   the   family   home   is   exempt   from   execution   as
expressly provided for in Article 153 of the Family Code.
It   has   been   said   that   the   family   home   is   a   real   right   that   is
gratuitous,   inalienable   and   free   from   attachment.40   The   great
controlling purpose and policy of the Constitution is the protection
or   the   preservation   of   the   homestead   –   the   dwelling   place.   A
houseless,   homeless   population   is   a   burden   upon   the   energy,
industry, and morals of the community to which it belongs. No
greater calamity, not tainted with crime, can befall a family than to
be expelled from the roof under which it has been gathered and
sheltered. The family home cannot be seized by creditors except in
special cases. T
he nature and character of the property that debtors may claim to
be exempt, however, are determined by the exemption statute. The
exemption   is   limited   to   the   particular   kind   of   property   or   the
specific  articles prescribed by the  statute; the  exemption  cannot
exceed the statutory limit. 
Articles 155 and 160 of the Family Code specify the exceptions
mentioned in Article 153, to wit:
ARTICLE 155. The family home shall be exempt from
execution, forced sale or attachment except: 
(1) For nonpayment of taxes; 
(2) For debts incurred prior to the constitution of the
family home; 
 (3)   For   debts   secured   by   mortgages   on   the   premises
before or after such constitution; and  [Underscoring supplied]
(4)   For   debts   due   to   laborers,   mechanics,   architects,
builders,   materialmen   and   others   who   have   rendered
service or furnished material for the construction of the
building.  that the provision covers only the excess in actual value
ARTICLE 160. When a creditor whose claims is not
among   those   mentioned   in   Article   155   obtains   a
judgment in his favor, and he has reasonable grounds to
believe   that   the   family   home   is   actually   worth   more
than the maximum amount fixed in Article 157, he may
apply to the court which rendered the judgment for an
order directing the sale of the property under execution.
The court shall so order if it finds that the actual value
of   the   family   home   exceeds   the   maximum   amount
allowed by law as of the time of its constitution. If the
increased actual value exceeds the maximum allowed in
Article   157   and   results   from   subsequent   voluntary
improvements   introduced   by   the   person   or   persons
constituting the family home, by the owner or owners
of the property, or by any of the beneficiaries, the same
rule and procedure shall apply.  sentence as follows:
At the execution sale, no bid below the value allowed
for a family home shall be  considered. The  proceeds
shall be applied first to the amount mentioned in Article
157, and then to the liabilities under the judgment and
the costs. The excess, if any, shall be delivered to the
judgment debtor.
Related to the foregoing is Article 157 of the Family Code, which
provides:
ARTICLE  157. The actual value of  the  family home
shall   not   exceed,   at   the   time   of   its   constitution,   the
amount of three hundred thousand pesos in urban areas,
and two hundred thousand pesos in rural areas, or such
amounts as may hereafter be fixed by law.  forced sale or attachment is limited to 300,000 in urban areas and ­
In any event, if the value of the currency changes after
the adoption of this Code, the value most favorable for
the constitution of a family home shall be the basis of
evaluation. 
For purposes of this Article, urban areas are deemed to
include   chartered   cities   and   municipalities   whose
annual income at least equals that legally required for
chartered cities. All others are deemed to be rural areas.
The minutes of the deliberation by the drafters of Family Code on
Article 160 are enlightening, to wit:
Justice Puno inquired if the above Article [160] is still
necessary. In reply, Judge  Diy opined that the above
Article is intended to cover a situation where the family
home is already worth 500,000 or 1M.
Justice   Reyes   stated   that   it   is   possible   that   a   family
home, originally valued at 300,000, later appreciated to
almost  1M because of improvements made, like roads
and   plazas.   Justice   Caguioa,   however,   made   a
distinction   between   voluntary   and   involuntary
improvements   in   the   sense   that   if   the   value   of   the
family home exceeded the maximum amount because
of voluntary improvements by the one establishing the
family home, the Article will apply; but if it is through
an involuntary improvement, like the conversion into a
residential area or the establishment of roads and other
facilities, the one establishing the family home should
not be punished by making his home liable to creditors.
He   suggested   that   the   matter   be   clarified   in   the
provision.  If   the   increase   in   actual   value   exceeds   that
x x x x 
Prof. Bautista objected to the phrase “is worth” since if
they will specify that the family home is worth more
than   the   maximum   amount   at   the   time   it   was
constituted, they will avoid the suit because the creditor
will be given proper warning. Justice Puno opined that
this is a question of fact. Justice Caguioa added that,
under the second sentence, there will be a preliminary
determination as to whether the family home exceeds
the maximum amount allowed by law. 
x x x x
Justice   Caguia   accordingly   modified   the   last
sentence as follows:  present   value   of   the   peso   because   of   currency   fluctuations,   the
If the excess in actual value over that allowed in
Article   157   is   due   to   subsequent   voluntary
improvements   by   the   person   or   persons
constituting the family home or  by the owner or
202
owners   of   the   property,   the   same   rules   and
procedure shall apply.
Prof. Bautista objected to the above provision, because
it will in effect penalize the owner for improving the
family home. On the other hand, Justice Puno opined
over   that   allowed   by   law.   Judge   Diy   added   that   the
owner  may improve  the  family home  up to  300,000.
Justice Caguioa stated that without the above provision,
one can borrow money, put it all on improvement of the
family   home   even   beyond   the   maximum   value   of   a
family home and, thereby, exempt it from levy on the
part   of   the   creditor.   He   added   that   anyway,   if   one
voluntarily improves his family home out of his money,
nobody can complain because there are no creditors. 
Justice Puno posed the question: What is “due to the
subsequent improvement?” Is it the “excess” or is it the
“increase”, or is it the “increase”, which constitutes the
“excess”? In reply, Justice Reyes opined that it is the
“increase” which constituted the “excess”. Justice Puno,
Justice   Reyes   and   Justice   Caguioa   modified   the   last
maximum allowed in Article 157 and results from
subsequent voluntary improvements introduced by
the person or persons constituting the family home
or   by   the   owner   or   owners   of   the   property,   the
same rule and procedure shall apply.
Prof. Bautista commented that the phrase “increase in
actual   value”   does   not   include   the   original   value.
Justice   Puno   suggested   that   they   just   say   “increased
actual   value”,   which   the   Committee   approved.44
[Underscoring supplied]
To summarize, the exemption of the family home from execution,
200,000 in rural areas, unless those maximum values are adjusted
by law. If it is shown, though, that those amounts do not match the
amount   of   exemption   shall   be   based   on   the   value   that   is   most
favorable  to   the  constitution  of   a  family  home.  Any  amount  in
excess of those limits can be applied to the payment of any of the
obligations specified in Articles 155 and 160. 
Any subsequent improvement or enlargement of the family home
by the persons constituting it, its owners, or any of its beneficiaries
will   still   be   exempt   from   execution,   forced   sale   or   attachment
provided the following conditions obtain: (a) the actual value of
the property at the time of its constitution has been determined to
fall   below   the   statutory   limit;   and   (b)   the   improvement   or
enlargement does not result in an increase in its value exceeding
the   statutory   limit.45   Otherwise,   the   family   home   can   be   the
subject of a forced sale, and any amount above the statutory limit
is applicable to the obligations under Articles 155 and 160. 
Certainly, the humane considerations for which the law surrounds
the   family  home  with  immunities  from  levy  do not  include  the
intent to enable debtors to thwart the just claims of their creditors.  respondents.   Yet,   it   ordered   the   execution   sale   of   the   property.
Petitioners maintain that this case falls under the exceptions to the
exemption of the family home from execution or forced sale. They
claim that the actual value of respondents’ family home exceeds
the 300,000 limit in urban areas. This fact is supposedly shown by
the Deed of Sale whereby private respondents agreed to sell the
property for 1 million way back in 1995. Therefore, the RTC only
properly ordered the execution sale of the property under Article
160 to satisfy the money judgment awarded to them in Civil Case
No. 4581.
As earlier discussed, it has been judicially determined with finality
that the property in dispute is a family home, and that its value at
the   time   of   its   constitution   was   within   the   statutory   limit.
Moreover, respondents have timely claimed the exemption of the
property from execution. On the other hand, there is no question
that  the  money  judgment  awarded  to  petitioners  falls   under   the
ambit of Article 160.
Notwithstanding   petitioners’   right   to   enforce   the   trial   court’s
money judgment, however, they cannot obtain its satisfaction at
the expense of respondents’ rights over their family home. It is
axiomatic that those asserting the protection of an exception from
an exemption must bring themselves clearly within the terms of the
exception   and   satisfy   any   statutory   requirement   for   its
enforcement. 
To warrant the execution sale of respondents’ family home under
Article 160, petitioners needed to establish these facts: (1) there
was an increase in its actual value; (2) the increase resulted from
voluntary improvements on the property introduced by the persons
constituting the family home, its owners or any of its beneficiaries;
and (3) the increased actual value exceeded the maximum allowed
under Article 157.  Acero, Jr., et al."
During the execution proceedings, none of those facts was alleged
– much less proven – by petitioners. The sole evidence presented
was the Deed of Sale, but the trial court had already determined
with   finality   that   the   contract   was   null,   and   that   the   actual
transaction was an equitable mortgage. Evidently, when petitioners
and Spouses Bell executed the  Deed of Sale in 1990, the  price
stated therein was not the actual value of the property in dispute. 
The Court thus agrees with the CA’s conclusion that the trial court
committed   grave   abuse   of   discretion   in   ordering   the   sale   on
execution of the property in dispute under Article 160. The trial
court had already determined with finality that the property was a
family home, and there was no proof that its value had increased
beyond   the   statutory   limit   due   to   voluntary   improvements   by
There is grave abuse of discretion when one acts in a capricious,
whimsical, arbitrary or despotic manner in the exercise of one’s
Republic of the Philippines
judgment, as in this case in which the assailed order is bereft of
SUPREME COURT
any factual or legal justification. 
Manila
WHEREFORE, the Petition for Review on Certiorari is hereby
DENIED for lack of merit. Accordingly, the Decision of the Court SECOND DIVISION
of  Appeals in CA­G.R. SP No. 87531, enjoining the  trial court
from proceeding with the sale of the family home of respondents,
G.R. No. 185064               January 16, 2012
is AFFIRMED.
SO ORDERED. SPOUSES ARACELI OLIVA­DE MESA and ERNESTO S. 
DE MESA, Petitioner,
vs.
MARIA LOURDES P. A. SERENO SPOUSES CLAUDIO D. ACERO, JR. and MA. RUFINA D. 
Chief Justice, Chairperson ACERO, SHERIFF FELIXBERTO L. SAMONTE and 
REGISTRAR ALFREDO SANTOS, Respondents.
D E C I S I O N
REYES, J.:
Nature of the Petition
This  is  a  petition  for   review   on certiorari under  Rule  45  of   the
Rules   of   Court   filed   by   the   Spouses   Araceli   Oliva­De   Mesa
(Araceli) and Ernesto S. De Mesa (Ernesto), assailing the Court of
Appeals’ (CA) Decision1 dated June 6, 2008 and Resolution2 dated
October   23,   2008  in   CA­G.R.   CV   No.  79391   entitled "Spouses
Araceli Oliva­De Mesa and Ernesto De Mesa v. Spouses Claudio
The Antecedent Facts
203
This   involves   a   parcel   of   land   situated   at   No.   3   Forbes   Street,
Mount   Carmel   Homes   Subdivision,   Iba,   Meycauayan,   Bulacan,
which was formerly covered by Transfer Certificate of Title (TCT)
No. T­76.725 (M) issued by the Register of Deeds of Meycauayan,
Bulacan   and   registered   under   Araceli’s   name.   The   petitioners
jointly purchased the subject property on April 17, 1984 while they
were still merely cohabiting before their marriage. A house was
later   constructed   on   the   subject   property,   which   the   petitioners
thereafter  occupied  as  their   family  home  after   they  got  married
sometime in January 1987.
Sometime   in   September   1988,   Araceli   obtained   a   loan   from
Claudio   D.  Acero,  Jr.   (Claudio)   in  the   amount   of  ₱100,000.00,
which was secured by a mortgage over the subject property. As
payment,   Araceli   issued   a   check   drawn   against   China   Banking
Corporation payable to Claudio.
When the check was presented for payment, it was dishonored as
the account from which it was drawn had already been closed. The
petitioners   failed   to   heed   Claudio’s   subsequent   demand   for
payment.
Thus, on April 26, 1990, Claudio filed with the Prosecutor's Office
of Malolos, Bulacan a complaint for violation of Batas Pambansa
Blg.   22   (B.P.   22)   against   the   petitioners.   After   preliminary
investigation,   an  information   for   violation   of   B.P.   22  was  filed
against   the   petitioners   with   the   Regional   Trial   Court   (RTC)   of
Malolos, Bulacan.
On October 21, 1992, the RTC rendered a Decision 3 acquitting the
petitioners   but   ordering   them   to   pay   Claudio   the   amount   of
₱100,000.00 with legal interest from date of demand until fully
paid.
On March 15, 1993, a writ of execution was issued and Sheriff
Felixberto L. Samonte (Sheriff Samonte) levied upon the subject
property.   On   March   9,   1994,   the   subject   property   was   sold   on
public   auction;   Claudio   was   the   highest   bidder   and   the
corresponding certificate of sale was issued to him.
Sometime in February 1995, Claudio leased the subject property to
the petitioners and a certain Juanito Oliva (Juanito) for a monthly
rent of  ₱5,500.00. However, the petitioners and Juanito defaulted
in the payment of the rent and as of October 3, 1998, their total
accountabilities to Claudio amounted to ₱170,500.00.
Meanwhile, on March 24, 1995, a Final Deed of  Sale 4 over  the
subject property was issued to Claudio and on April 4, 1995, the
Register of Deeds of Meycauayan, Bulacan cancelled TCT No. T­
76.725 (M) and issued TCT No. T­221755 (M)5 in his favor.
Unable to collect the aforementioned rentals due, Claudio and his
wife   Ma.   Rufina   Acero   (Rufina)   (collectively   referred   to   as
Spouses Acero) filed a complaint for ejectment with the Municipal
Trial Court (MTC) of Meycauayan, Bulacan against the petitioners
and Juanito. In their defense, the petitioners claimed that Spouses
Acero have no right over the subject property. The petitioners deny
that  they are  mere   lessors;  on  the   contrary,  they are  the   lawful
owners   of   the   subject   property   and,   thus   cannot   be   evicted
therefrom.
On   July   22,   1999,   the   MTC   rendered   a   Decision, 6 giving   due
course to Spouses Acero’s complaint and ordering the petitioners
and   Juanito   to   vacate   the   subject   property.   Finding   merit   in
Spouses Acero’s claims, the MTC dismissed the petitioners' claim
of ownership over the subject property. According to the MTC,
title to the subject property belongs to Claudio as shown by TCT
No. T­221755 (M).
The MTC also stated that from the time a Torrens title over the
subject property was issued in Claudio’s name up to the time the
complaint for ejectment was filed, the petitioners never assailed the
validity of the levy made by Sheriff Samonte, the regularity of the
public   sale   that   was   conducted  thereafter   and  the   legitimacy   of
Claudio’s Torrens title that was resultantly issued.
The petitioners appealed the MTC’s July 22, 1999 Decision to the
RTC. This appeal was, however, dismissed in a Decision dated
November 22, 1999 due to the petitioners’ failure to submit their
Memorandum. The petitioners sought reconsideration of the said
decision but the same was denied in an Order dated January 31,
2000.
Consequently, the petitioners filed a petition for review7 with the
CA assailing the RTC’s November 22, 1999 Decision and January
31, 2000 Order. In a December 21, 2006 Decision, 8 the CA denied
the petitioner’s petition for review. This became final on July 25,
2007.9
In   the   interregnum,   on   October   29,   1999,   the   petitioners   filed
against the respondents a complaint10 to nullify TCT No. T­221755
204
(M) and other documents with damages with the RTC of Malolos,
Bulacan. Therein, the petitioners asserted that the subject property
is   a   family   home,   which   is   exempt   from   execution   under   the
Family Code and, thus, could not have been validly levied upon for
purposes of satisfying the March 15, 1993 writ of execution.
On   September   3,   2002,   the   RTC   rendered   a   Decision, 11 which
dismissed the petitioners’ complaint. Citing Article 155(3) of the
Family Code, the RTC ruled that even assuming that the subject
property is a family home, the exemption from execution does not
apply. A  mortgage  was constituted over  the  subject property to
secure the loan Araceli obtained from Claudio and it was levied
upon as payment therefor.
The petitioners sought reconsideration of the RTC’s September 3,
2002 Decision but this was denied in a Resolution 12 dated January
14, 2003.
On   appeal,   the   CA   affirmed   the   RTC’s   disposition   in   its
Decision13 dated   June   6,   2008.   The   CA   ratiocinated   that   the
exemption of a family home from execution, attachment or forced
sale under Article 153 of the Family Code is not automatic and
should accordingly be raised and proved to the Sheriff prior to the
execution, forced sale or attachment. The appellate court noted that
at no time did the petitioners raise the supposed exemption of the
subject property from execution on account of the same being a
family home.
The   petitioners   then   sought   reconsideration   of   the   said   June   6,
2008   Decision   but   the   same   was   denied   by   the   CA   in   its
Resolution14 dated October 23, 2008.
Aggrieved,   the   petitioners   filed   the   instant   petition   for   review,
praying for the cancellation of TCT No. T­221755 (M). They insist
that the execution sale that was conducted is a nullity considering
that the subject property is a family home. The petitioners assert
that, contrary to the disposition of the CA, a prior demonstration
that the subject property is a family home is not required before it
can be exempted from execution.
In their Comment,15 Spouses Acero claimed that this petition ought
to be denied on the ground of forum­shopping as the issues raised
had  already  been   determined  by   the   MTC   in  its   July  22,   1999
Decision on the complaint for ejectment filed by them, which had
already   become   final   and   executory   following   the   petitioner’s
failure to appeal the CA’s December 21, 2006 Decision affirming
it.
Issues
The threshold issues for resolution are the following: (a) whether
the petitioners are guilty of forum­shopping; and (b) whether the
lower   courts   erred   in   refusing   to   cancel   Claudio’s   Torrens   title
TCT No. T­221755 (M) over the subject property.
The Court’s Ruling
First Issue: Forum­Shopping
On the first issue, we find that the petitioners are not guilty of
forum­shopping.
There is forum­shopping when as a result of an adverse decision in
one  forum, or   in anticipation  thereof,  a  party  seeks a  favorable
opinion   in   another   forum   through   means   other   than   an   appeal
or certiorari.   Forum­shopping   exists   when   two   or   more   actions
involve the same transactions, essential facts, and circumstances;
and raise identical causes of action, subject matter, and issues.16
Forum­shopping   exists   where   the   elements   of litis   pendentia are
present, and where a final judgment in one case will amount to res
judicata in   the   other.   The   elements   of   forum­shopping   are:   (a)
identity of parties, or at least such parties as would represent the
same interest in both actions; (b) identity of rights asserted and
relief prayed for, the relief being founded on the same facts; and
(c) identity of the two preceding particulars such that any judgment
rendered   in   the   other   action   will,   regardless   of   which   party   is
successful,   amount   to res   judicata in   the   action   under
consideration.17
There is no identity of issues and reliefs prayed for in the ejectment
case and in the action to cancel TCT No. T­221755 (M). Verily,
the   primordial   issue   in   the   ejectment   case   is   who   among   the
contending parties has a better right of possession over the subject
property while ownership is the core issue in an action to cancel a
Torrens title.
It is true that the petitioners raised the issue of ownership over the
subject  property   in   the   ejectment  case.   However,  the   resolution
thereof is only provisional as the same is solely for the purpose of
determining who among the parties therein has a better right of
possession over the subject property.
Accordingly, a judgment rendered in an ejectment case is not a bar
to action between the same parties respecting title to the land or
building. Neither shall it be conclusive as to the facts therein. This
issue is far from being novel and there is no reason to depart from
this   Court’s   previous   pronouncements.   In Malabanan   v.   Rural
Bank of Cabuyao, Inc.,18 this Court had previously clarified that a
decision in an ejectment case is not res judicata in an annulment of
title   case  and  vice­versa   given  the  provisional  and  inconclusive
nature of the determination of the issue of ownership in the former.
Forum­shopping   exists   where   the   elements   of litis   pendentia are
present,   namely:   (a)   identity   of   parties   or   at   least   such   as
representing   the   same   interests   in   both   actions;   (b)   identity   of
rights asserted and reliefs prayed for, the relief being founded on
the same facts; and (c) the identity in the two cases should be such
that the judgment that may be rendered in one would, regardless of
which party is successful, amounts to res judicata in the other.
Petitioner and respondent are the same parties in the annulment
and ejectment cases. The issue of ownership was likewise being
contended,   with   same   set   of   evidence   being   presented   in   both
cases.   However,   it   cannot   be   inferred   that   a   judgment   in   the
ejectment   case   would   amount   to res   judicata in   the   annulment
case, and vice­versa.
This issue is hardly a novel one. It has been laid to rest by heaps of
cases   iterating   the   principle   that   a   judgment   rendered   in   an
ejectment case shall not bar an action between the same parties
respecting title to the land or building nor shall it be conclusive as
to the facts therein found in a case between the same parties upon a
different cause of action involving possession.
It   bears   emphasizing   that   in   ejectment   suits,   the   only   issue   for
resolution is the  physical or material possession of the  property
involved, independent of any claim of ownership by any of the
party   litigants.   However,   the   issue   of   ownership   may   be
provisionally ruled upon for the sole purpose of determining who
is   entitled   to   possession de   facto.   Therefore,   the   provisional
determination of ownership in the ejectment case cannot be clothed
with finality.
205
Corollarily, the incidental issue of whether a pending action for
annulment would abate an ejectment suit must be resolved in the
negative.
A pending action involving ownership of the same property does
not bar the filing or consideration of an ejectment suit, nor suspend
the proceedings. This is so because an ejectment case is simply
designed to summarily restore physical possession of a piece of
land or building to one who has been illegally or forcibly deprived
thereof, without prejudice to the settlement of the parties' opposing
claims   of   juridical   possession   in   appropriate
proceedings.19 (citations omitted)
Second Issue: Nullification of TCT No. T­221755 (M)
Anent the second issue, this Court finds that the CA did not err in
dismissing the petitioners’ complaint for nullification of TCT No.
T­221755 (M).
The subject property is a family home.
The petitioners maintain that the subject property is a family home
and,   accordingly,   the   sale   thereof   on   execution   was   a   nullity.
In Ramos v. Pangilinan,20 this Court laid down the rules relative to
exemption of family homes from execution:
For the family home to be exempt from execution, distinction must
be made as to what law applies based on when it was constituted
and what requirements must be  complied with by the judgment
debtor or his successors claiming such privilege. Hence, two sets
of rules are applicable.
If  the  family  home  was  constructed before the   effectivity  of  the
Family Code or before August 3, 1988, then it must have been
constituted either   judicially   or   extra­judicially   as   provided
under Articles 225, 229­231 and 233 of the Civil Code. Judicial
constitution of the family home  requires the filing of a verified
petition before the courts and the registration of the court’s order
with   the   Registry   of   Deeds   of   the   area   where   the   property   is
located.   Meanwhile,   extrajudicial   constitution   is   governed   by
Articles 240 to 242 of the Civil Code and involves the execution of
a public instrument which must also be registered with the Registry
of Property. Failure to comply with either one of these two modes
of  constitution  will  bar  a  judgment  debtor  from  availing  of   the
privilege.
On   the   other   hand,   for   family   homes   constructed after the
effectivity of the Family Code on August 3, 1988, there is no need
to constitute extrajudicially or judicially, and the exemption is
effective from the time it was constituted and lasts as long as any
of   its   beneficiaries   under   Art.   154   actually   resides   therein.
Moreover,   the   family   home   should   belong   to   the   absolute
community   or   conjugal   partnership,   or   if   exclusively   by   one
spouse, its constitution must have been with consent of the other,
and its value must not exceed certain amounts depending upon the
area where it is located. Further, the debts incurred for which the
exemption does not apply as provided under Art. 155 for which the
family home is made answerable  must have been incurred after
August 3, 1988.21 (citations omitted)
In the  earlier  case  of Kelley, Jr. v. Planters Products, Inc., 22 we
stressed that:
Under the Family Code, there is no need to constitute the family
home judicially or extrajudicially. All family homes constructed
after   the   effectivity   of   the   Family   Code   (August   3,   1988)   are
constituted   as   such   by   operation   of   law. All   existing   family
residences as of August 3, 1988 are considered family homes
and   are   prospectively   entitled   to   the   benefits   accorded   to   a
family home under the Family Code.23 (emphasis supplied and
citation omitted)
The foregoing rules on constitution of family homes, for purposes
of exemption from execution, could be summarized as follows:
First,   family   residences   constructed   before   the
effectivity of the Family Code or before August 3, 1988
must be constituted as a family home either judicially
or extrajudicially in accordance with the provisions of
the Civil Code in order to be exempt from execution;
Second,   family   residences   constructed   after   the
effectivity of the Family Code on August 3, 1988 are
automatically   deemed   to   be   family   homes   and   thus
exempt from execution from the time it was constituted
and   lasts   as   long   as   any   of   its   beneficiaries   actually
resides therein;
Third, family residences which were not judicially or
extrajudicially constituted as a family home prior to the
effectivity   of   the   Family   Code,   but   were   existing
thereafter, are considered as family homes by operation
of   law   and   are   prospectively   entitled   to   the   benefits
accorded to a family home under the Family Code.
Here, the subject property became a family residence sometime in
January 1987. There was no showing, however, that the same was
judicially   or   extrajudicially   constituted   as   a   family   home   in
accordance with the provisions of the Civil Code. Still, when the
Family Code took effect on August 3, 1988, the subject property
became   a   family   home   by   operation   of   law   and   was   thus
prospectively  exempt  from  execution.  The  petitioners  were  thus
correct in asserting that the subject property was a family home.
The family home’s exemption from execution must be set up
and proved to the Sheriff  before the sale  of  the property at
public auction.
Despite the fact that the subject property is a family home and,
thus, should have been exempt from execution, we nevertheless
rule that the CA did not err in dismissing the petitioners’ complaint
for nullification of TCT No. T­221755 (M). We agree with the CA
that the petitioners should have asserted the subject property being
a family home and its being exempted from execution at the time it
was levied or within a reasonable time thereafter. As the CA aptly
pointed out:
In   the   light   of   the   facts   above   summarized,   it   is   evident   that
appellants   did   not   assert   their   claim   of   exemption   within   a
reasonable   time.  Certainly,  reasonable  time, for   purposes  of   the
law on exemption, does not mean a time after the expiration of the
one­year period provided for in Section 30 of Rule 39 of the Rules
of   Court   for   judgment   debtors   to   redeem   the   property   sold   on
execution, otherwise it would render nugatory final bills of sale on
execution and defeat the very purpose of execution – to put an end
to litigation. x x x.24
The foregoing disposition is in accord with the Court’s November
25, 2005 Decision in Honrado v. Court of Appeals, 25 where it was
categorically   stated   that   at   no   other   time   can   the   status   of   a
residential house as a family home can be set up and proved and its
exemption from execution be claimed but before the sale thereof at
public auction:
While it is true that the family home is constituted on a house and
lot from the time it is occupied as a family residence and is exempt
206
from   execution   or   forced   sale   under   Article   153   of   the   Family
Code, such claim for exemption should be set up and proved to the
Sheriff before the sale of the property at public auction. Failure to
do so would estop the party from later claiming the exemption. As
this Court ruled in Gomez v. Gealone:
Although the Rules of Court does not prescribe the period within
which to claim the exemption, the rule is, nevertheless, well­settled
that the right of exemption is a personal privilege granted to the
judgment debtor and as such, it must be claimed not by the sheriff,
but   by   the   debtor   himself   at   the   time   of   the   levy   or   within   a
reasonable period thereafter;
"In   the   absence   of   express   provision   it   has   variously   held   that
claim (for exemption) must be made at the time of the levy if the
debtor is present, that it must be made within a reasonable time, or
promptly,   or   before   the   creditor   has   taken   any   step   involving
further costs, or before advertisement of sale, or at any time before
sale, or within a reasonable time before the sale, or before the sale
has commenced, but as to the last there is contrary authority."
In the light of the facts above summarized, it is self­evident that
appellants   did   not   assert   their   claim   of   exemption   within   a
reasonable   time.  Certainly,  reasonable  time, for   purposes  of   the
law on exemption, does not mean a time after the expiration of the
one­year period provided for in Section 30 of Rule 39 of the Rules
of   Court   for   judgment   debtors   to   redeem   the   property   sold   on
execution, otherwise it would render nugatory final bills of sale on
execution and defeat the very purpose of execution—to put an end
to litigation.1awphil We said before, and We repeat it now, that
litigation must end and terminate sometime and somewhere, and it
is essential to an effective administration of justice  that, once  a
judgment has become final, the winning party be not, through a
mere subterfuge, deprived of the fruits of the verdict. We now rule
that claims   for   exemption   from   execution   of   properties   under
Section 12 of Rule 39 of the Rules of Court must be presented
before its sale on execution by the sheriff.26 (citations omitted)
Reiterating   the   foregoing   in Spouses   Versola   v.   Court   of
Appeals,27 this Court stated that:
Under the cited provision, a family home is deemed constituted on
a house and lot from the time it is occupied as a family residence;
there is no need to constitute the same judicially or extrajudicially.
The settled rule is that the right to exemption or forced sale
under Article 153 of the Family Code is a personal privilege
granted to the judgment debtor and as such, it must be claimed
not by the sheriff, but by the debtor himself before the sale of
the property at public auction. It is not sufficient that the person
claiming exemption merely alleges that such property is a family
home. This claim for exemption must be set up and proved to
the Sheriff. x x x.28 (emphasis supplied and citations omitted)
Having   failed   to   set   up   and   prove   to   the   sheriff   the   supposed
exemption of the subject property before the sale thereof at public
auction,   the   petitioners   now   are   barred   from   raising   the   same.
Failure to do so estop them from later claiming the said exemption.
assert   it.   Since   the   exemption   under   Article   153   of   the   Family
Code is a personal right, it is incumbent upon the petitioners to
invoke and prove the same within the prescribed period and it is
not the sheriff’s duty to presume or raise the status of the subject
property as a family home.
The   petitioners’   negligence   or   omission   renders   their   present
assertion   doubtful;  it   appears  that  it  is   a  mere  afterthought  and
artifice that cannot be countenanced without doing the respondents
injustice and depriving the fruits of the judgment award in their
favor.   Simple   justice   and   fairness   and   equitable   considerations
demand that Claudio’s title to the property be respected. Equity
dictates that the petitioners are made to suffer the consequences of
their unexplained negligence.

Indeed, the family home is a sacred symbol of family love and is
WHEREFORE, in  consideration  of  the  foregoing disquisitions,
the   repository   of   cherished   memories   that   last   during   one’s
the petition is DENIED. The assailed Decision dated June 6, 2008
lifetime.29 It is likewise without dispute that the family home, from
of   the   Court   of   Appeals   in   CA­G.R.   CV   No.   79391,   which
the time of its constitution and so long as any of its beneficiaries
affirmed   the   Decision   of   the   Regional   Trial   Court   of   Malolos,
actually resides therein, is generally exempt from execution, forced
Bulacan, Branch 22, in Civil Case No. 1058­M­99 and dismissed
sale or attachment.30
the complaint for declaration of nullity of TCT No. 221755 (M)
and   other   documents,   and   the   October   23,   2008   Resolution
The family home is a real right, which is gratuitous, inalienable denying reconsideration, are AFFIRMED.
and free from attachment. It cannot be seized by creditors except in
certain  special  cases.31 However,  this  right  can  be   waived  or  be
SO ORDERED.
barred by laches by the failure to set up and prove the status of the
property as a family home at the time of the levy or a reasonable
time thereafter. BIENVENIDO L. REYES
Associate Justice
In   this   case,   it   is   undisputed   that   the   petitioners   allowed   a
considerable time to lapse before claiming that the subject property
is a family home and its exemption from execution and forced sale
under   the   Family   Code.   The   petitioners   allowed   the   subject
property to be levied upon and the public sale to proceed. One (1)
year lapsed from the time the subject property was sold until a
Final   Deed   of   Sale   was   issued   to   Claudio   and,   later,   Araceli’s
Torrens title was cancelled and a new one issued under Claudio’s
name, still, the petitioner remained silent. In fact, it was only after
the   respondents   filed   a   complaint   for   unlawful   detainer,   or
approximately four (4) years from the time of the auction sale, that
the petitioners claimed that the subject property is a family home,
thus, exempt from execution.

For   all   intents   and   purposes,   the   petitioners’   negligence   or

omission to assert their right within a reasonable time gives rise to
the presumption that they have abandoned, waived or declined to

207
208
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 213972 February 5, 2018
FELICITAS L. SALAZAR, Petitioner
vs.
REMEDIOS FELIAS, on her own behalf and representation of
the other HEIRS OF CATALINO NIVERA, Respondents
D E C I S I O N
REYES, J.:
The movant's claim that his/her property is exempt from execution
for being the family home is not a magic wand that will freeze the
court's hand and forestall the execution of a final and executory
ruling. It is imperative that the claim for exemption must be set up
and proven.
This treats of the petition for review on certiorari1 under Rule 45
of   the   Revised   Rules   of   Court   seeking   the   reversal   of   the
Decision2 dated December 6, 2013, and Resolution 3 dated August
7, 2014, rendered by the Court of Appeals (CA) in CA­G.R. CV
No. 97309, which affirmed the execution of the final and executory
judgment   issued   by   the   Regional   Trial   Court,   Branch   55,
Alaminos, Pangasinan (RTC Branch 55).
The Antecedent Facts
On   February   28,   1990,   private   respondent   Remedios   Felias,
representing the heirs of Catalino Nivera (Heirs of Nivera) filed a
Complaint for Recovery of Ownership, Possession and Damages
against the Spouses Romualdo Lastimosa (Romualdo) and Felisa
Lastimosa (Felisa). The former sought to recover from the latter
four parcels of land located in Baruan, Agno, Pangasinan (subject
property).
On March 3, 1997, during the trial of the case, Romualdo died.
Consequently, on July 6, 1998, a Motion for Substitution 4 was filed
by the decedent's wife, Felisa, and their children Flordeliza Sagun,
Reynaldo Lastimosa, Recto Lastimosa (Recto), Rizalina Ramirez
(Rizalina),   Lily   Lastimosa,   and   Avelino   Lastimosa   (Heirs
ofLastimosa).
On   March   16,   2004,   the   RTC   Branch   55   rendered   a
Decision,5 declaring the Heirs ofNivera as the absolute owners of
the parcels ofland in question, and thereby ordering the Heirs of
Lastimosa to vacate the lands and to surrender possession thereof.
The   dispositive   portion   of   the   decision   of   the   RTC   Branch   55,
reads:
WHEREFORE, this Honorable Court renders judgment:
a. Declaring the [Heirs of Nivera] absolute owners of the parcels of
land   in   question   as   described   in   the   Amended   Complaint,   and
ordering the [Heirs of Lastimosa] to surrender possession thereof
and vacate the same;
b. Ordering the [Heirs of Lastimosa], jointly and severally, to pay
the   [Heirs   of   Nivera]   actual   damages   in   the   amount   of   Php
270,000.00 for 1975 to 1995, and Php 10,000.00 annually from
1996 and through all the subsequent years until actual possession
shall have been restored to the [Heirs of Nivera]; attorney's fees
and litigation expenses in the amount of Php 21,000.00; and costs.
SO ORDERED.6
The   Heirs   of   Lastimosa   did   not   file   an   appeal   against   the   trial
court's ruling.
Meanwhile,   Felicitas   Salazar   (Felicitas),   daughter   of   Romualdo,
along with Recto and Rizalina filed a Petition for Annulment of
Judgment dated June 22, 2006 with the CA. Felicitas sought the
nullification of  the  RTC Branch 55's  Decision dated March 16,
2004, and the corresponding Writs of Execution and Demolition
issued   pursuant   thereto.7 In   her   Petition   for   Annulment   of
Judgment, Felicitas claimed that she was deprived of due process
when   she   was   not   impleaded   in   the   case   for   Recovery   of
Ownership, before the RTC Branch 55.8
On June 5, 2008, the Former Tenth Division of the CA rendered a
Decision,9 in CA­G.R. SP No. 95592, dismissing the Petition for
209
Annulment of Judgment. The CA refused to give credence to the
contention   that   the   Heirs   of   Nivera   are   at   fault   for   failing   to
implead Felicitas as a party defendant in the action for recovery of
ownership.   Rather,   the   failure   to   include   Felicitas   in   the
proceedings was due to the fault of the Heirs of Lastimosa, who
neglected to include her (Felicitas) in their Motion to Substitute.
The   CA   further   ratiocinated   that   since   the   RTC   acquired
jurisdiction over the person of the original defendants Romualdo
and Felisa, the outcome of the case is binding on all their heirs or
any such persons claiming rights under them.10
On   June   3,   2009,   this   Court   affirmed   the   CA   decision   in   the
Petition for Annulment of Judgment.11 The Court's ruling became
final, as per Entry of Judgment, on October 5, 2009.
Meanwhile, the Heirs of Lastimosa filed with the R TC Branch 55
an   Urgent   Motion   to   Order   the   Sheriff   to   Desist   from   Making
Demolition   dated   April   24,   2010.   The   Motion   to   Desist   was
premised   on   the   fact   that   the   Sheriff   cannot   execute   the   lower
court's decision considering that Felicitas had an aliquot share over
the property, which had not yet been partitioned.12
At about the same time, the Heirs of Nivera filed a Motion for
Execution and Demolition dated May 28, 2010. The Motion for
Execution was anchored on the fact that the Decision dated March
16, 2004, in the case for recovery of ownership, possession and
damages had long attained finality.13
On July 9, 2010, the RTC Branch 55 issued an Order granting the
Motion for Execution and Demolition, and denying the Motion to
Desist.14 The dispositive portion of the order reads:
After   going   over   the   allegations   in   both   motions,   the   Court
resolves to deny the motion, to order the  Sheriff to desist from
making   demolition   filed   by   the   defendants   through   counsel,   it
appearing that the grounds raised in the said motion are already
mooted by the subsequent filing of the motion for execution and
demolition filed by plaintiff through counsel.
The motion for execution and demolition is hereby granted.
Accordingly,  let  [a]   Writ  of   Execution  and  Demolition  issue  to
satisfy judgement rendered in this case.
SO ORDERED.15
Dissatisfied   with   the   ruling,   the   Heirs   of   Lastimosa16 filed   an
appeal   before   the   CA,   questioning   the   Writ   of   Execution   and
Demolition issued by the lower court.
On December 6, 2013, the Fifteenth Division of the CA rendered
the   assailed   Decision17 dismissing   the   appeal   on   the   following
grounds, to wit: (i) the Heirs of Lastimosa availed of the wrong
remedy   by   filing   an   appeal,   instead   of   a   petition
for certiorari under Rule 65; (ii) the matter pertaining to the non­
inclusion of  Felicitas is already barred by res judicata, as it has
been settled with finality in CA­G.R. SP No. 95592, and affirmed
by the Supreme Court in G.R. No. 185056; and (iii) the execution
of   the   decision   rendered   by   the   RTC   Branch   55   is   proper
considering   that   case   has   long   attained   finality.   The   dispositive
portion of the assailed CA decision reads:
ACCORDINGLY,   the   appeal   is   DENIED.   The   assailed   Order
dated April 6, 2011 is AFFIRMED.18
Felicitas   filed   a   Motion   for   Reconsideration   against   the   same
Decision, which was denied by the CA  in its Resolution 19 dated
August 7, 2014.
Undeterred,   Felicitas   filed   the   instant   petition   for   review
on certiorari20 under   Rule   45   of   the   Revised   Rules   of   Court
seeking the reversal of the assailed CA decision and resolution.
The Issue
The main issue for this Court's resolution rests on whether the CA
erred in ordering the execution of the Decision dated March 16,
2004.
In seeking the reversal of the assailed decision, Felicitas claims
that   the   Writ   of   Execution   and   Demolition   issued   by   the   RTC
Branch 55 was executed against the wrong party.21 She points out
that she was not impleaded in the case for recovery of ownership
and possession, and thus the decision cannot bind her. 22 Felicitas
argues that she was deprived of her property as an heir without due
process, as she was left out of the proceedings, "completely unable
to   protect   her   rights."23 In   addition,   Felicitas   contends   that   the
execution   cannot   continue   as   the   Writ   of   Execution   is   being
enforced against property that is exempt from execution, as what is
sought to be demolished is her family home. In this regard, Article
155   of   the   Family   Code   ordains   that  the   family   home   shall   be
exempt from execution.24
On the other hand, the Heirs of Nivera counter that the petition for
review on certiorari is nothing but a dilatory tactic employed by
Felicitas  to   overthrow  and  delay  the   execution   of   the  judgment
rendered   in   as   early   as   March   16,   2004. 25 The   Heirs   of   Nivera
maintain that Felicitas' claim that she was deprived of her property
as an heir without due process of law has already been settled with
finality in the Petition for Annulment of Judgement, which was
dismissed by the CA, and this Court.26 Likewise, anent the claim
that the subject property is exempt from execution, the Heirs of
Nivera aver that Felicitas failed to present an iota of evidence to
prove her claim. On the contrary, Felicitas herself admitted in her
pleadings   that   she   does   not   reside   in   the   subject   property   in
Alaminos, but actually lives in Muñoz, Nueva Ecija. 27 Moreover,
the subject property belonged to the Heirs of Nivera in as early as
the 1950s, thereby negating Felicitas' claim that it is her family
home.28
Ruling of the Court
The petition is bereft of merit.
Nothing is more settled than the rule that a judgment that is final
and executory is immutable and unalterable. It may no longer be
modified in any respect, except when the judgment is void, or to
correct clerical errors or to make nunc pro tune entries. In the same
vein, the decision that has attained finality becomes the law of the
case, regardless of any claim that it is erroneous. Any amendment
or   alteration   which   substantially   affects   a   final   and   executory
judgment is null and void for lack of jurisdiction, including the
entire proceedings held for that purpose. 29 Accordingly, the court
cannot   refuse   to   issue   a   writ   of   execution   upon   a   final   and
executory judgment, or quash it, or stay its implementation.30
Concomitantly, neither may the parties object to the execution by
raising new issues of fact or law. The only exceptions thereto are
when: "(i) the writ of execution varies the judgment; (ii) there has
been   a   change   in   the   situation   of   the   parties   making   execution
inequitable   or   unjust;   (iii)   execution   is   sought   to   be   enforced
against property exempt from execution; (iv) it appears that the
controversy has been submitted to the judgment of the court; (v)
the terms of the judgment are not clear enough and there remains
room for interpretation thereof; or (vi) it appears that the writ of
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execution has been improvidently issued, or that it is defective in
substance, or issued against the wrong party, or that the judgment
debt has been paid or otherwise satisfied, or the writ was issued
without authority."31
In the case at bar, there is no dispute that in as early as March 16,
2004,   the   RTC   Branch   55  of   Alaminos,   Pangasinan   rendered  a
Decision in the case for Recovery of Ownership, Possession and
Damages, ordering the Heirs of Lastimosa to vacate the subject
properties and surrender them to the Heirs of Nivera. There is no
dispute that this ruling of the RTC had become final and executory.
Pursuant thereto, the lower court issued a Writ of Execution and
Demolition.
This notwithstanding, Felicitas seeks to prevent the execution of
the same order, arguing that the writ was issued against the wrong
party; and that the property sought to be executed is exempt from
execution.
The Court is not persuaded.
It must be noted at the outset that the matter of whether Felicitas
was deprived of due process of law for not having been impleaded
in the case for recovery of ownership and possession has long been
settled with finality.
In the decision of the CA in the case for Petition for Annulment of
Judgment (CA­G.R. SP No. 95592),32 the Former Tenth Division
of   the   CA   squarely   and   judiciously   passed   upon   the   issue   of
whether the. judgment of the lower court in the action for recovery
of   ownership   and   possession   was   void   for   failure   to   implead
Felicitas. The CA held that:
Finally, the intimation of the petitioners that private respondent is
at fault for failing to implead [Felicitas] as party defendant in this
case is patently without basis. It must be recalled that the lower
court   acquired   jurisdiction   over   the   person   of   the   original
defendants Romualdo and Feliza Lastimosa. Hence, the outcome
of this case is binding on all the heirs or persons claiming rights
under  the said defendants. When [Romualdo] died on March 3,
1997, the defendants filed an Urgent Motion to Substitute Other
Heirs of the said defendant listing the names of the heirs to be
substituted. It is therefore crystal clear that if [Felicitas] was not
impleaded in this case as party defendant being the daughter of
[Romualdo], that omission could not be attributed to the private
respondent but the defendants themselves.33 (Underscoring in the
original)
This ruling of the CA was affirmed by this Court in the Resolution
dated June 3, 2009, and attained finality as per Entry of Judgment.
Markedly, it is crystal clear that the issues pertaining to Felicitas'
non­inclusion in the proceedings, and the consequent validity of
the   lower   court's   judgment   have   long   attained   finality.   It   bears
reiterating that a judgment that is final and executory cannot be
altered, even by the highest court of the land. This final judgment
has become the law of the case, which is now immutable.
Additionally, as an heir of the original defendants in the action for
recovery of ownership, Felicitas is bound by the decision rendered
against   her   predecessors­in­interest.   Thus,   there   is   nothing   that
exempts her from the enforcement of the Writ of Execution.
In another attempt to thwart the execution of the RTC's final and
executory   judgment,   Felicitas   claims   that   the   execution   cannot
proceed, as the subject property is her family home and is therefore
exempt from execution.
Indeed,   the   family   home   is   a   real   right   which   is   gratuitous,
inalienable and free from attachment, constituted over the dwelling
place   and   the   land   on   which   it   is   situated.   It   confers   upon   a
particular family the right to enjoy such properties.34 It cannot be
seized by creditors except in certain special cases.35
However, the claim that the property is exempt from execution for
being  the   movant's  family  home   is  not   a  magic   wand  that  will
freeze the court's hand and forestall the execution of a final and
executory ruling. It must be noted that it is not sufficient for the
claimant  to   merely   allege   that   such   property  is   a   family   home.
Whether the claim is premised under the Old Civil Code or the
Family Code, the claim for exemption must be set up and proved.36
In   fact,   in Ramos,   et   al.   v.   Pangilinan,   et   al.,37 the   Court,
citmg Spouses Kelley, Jr. v. Planters Products, Inc., et al.,38 laid
down   the   rules   relative   to   the   levy   on   execution   of   the   family
home, viz.:
No   doubt,   a   family   home   is   generally   exempt   from   execution
provided it was duly constituted as such. There must be proof that
the alleged family home was constituted jointly by the husband and
wife or by an unmarried head of a family. It must be the house
where they and their family actually reside and the lot on which it Undoubtedly, Felicitas' argument that the property subject of the
is situated. The family home must be part of the properties of the writ of execution is a family home, is an unsubstantiated allegation
absolute   community   or   the   conjugal   partnership,   or   of   the that   cannot   defeat   the   binding   nature   of   a   final   and   executory
exclusive properties of either spouse with the latter's consent, or on judgment. Thus, the Writ of Execution and Demolition issued by
the property of the unmarried head of the family. The actual value the RTC Branch 55 must perforce be given effect.
of the family home shall not exceed, at the time of its constitution,
the   amount   of  ₱300,000   in   urban   areas   and  ₱200,000   in   rural In fine, an effective and efficient administration of justice requires
areas.39 that once a judgment has become final, the winning party should
not be deprived of the fruits of the verdict. The case at bar reveals
In addition, residence in the family home must be actual. The law the attempt of the losing party to thwart the execution of a final
explicitly mandates that the occupancy of the family home, either and executory judgment, rendered by the court thirteen (13) long
by the owner thereof, or by any of its beneficiaries must be actual. years   ago.   The   Court   cannot   sanction   such   vain   and   obstinate
This occupancy must be real, or actually existing, as opposed to attempts to forestall the execution of a final ruling. It is high time
something merely possible, or that which is merely presumptive or that the  case be  settled with finality and the ruling of  the  RTC
constructive.40 Branch 55 be given full force and effect.
Guided by the foregoing jurisprudential tenets, it becomes all too
apparent that Felicitas cannot conveniently claim that the subject
property is her family home, sans sufficient evidence proving her
allegation.1âшphi1 It bears emphasis that it is imperative that her
claim must be backed with evidence showing that the home was WHEREFORE, premises   considered,   the   instant   petition
indeed (i) duly constituted as a family home, (ii) constituted jointly is DENIED   for   lack   of   merit. Accordingly,   the   Decision   dated
by the husband and wife or by an unmarried head of a family, (iii) December 6, 2013 and Resolution dated August 7, 2014, rendered
resided   in   by   the   family   (or   any   of   the   family   home's by   the   Court   of   Appeals   in   CA­G.R.   CV   No.   97309
beneficiaries),   (iv)   forms   part   of   the   properties   of   the   absolute are AFFIRMED in toto.
community   or   the   conjugal   partnership,   or   of   the   exclusive
properties of either spouse with the latter's consent, or property of SO ORDERED.
the unmarried head of the family, and (v) has an actual value of
Php 300,000.00 in urban areas, and Php 200,000.00 in rural areas.
ANDRES B. REYES, JR.
Associate Justice
A perusal of the petition, however, shows that aside from her bare
allegation, Felicitas adduced no proof to substantiate her claim that
the property sought to be executed is indeed her family home.
Interestingly, Felicitas admitted in her Motion for Reconsideration
dated   December   23,   2013,   and   her   Petition   for   Annulment   of
Judgment dated June 22, 2006, that she is, and has always been a
resident of Muñoz, Nueva Ecija.41 Similarly, the address indicated
in   Felicitas'   petition   for   review   on certiorari is   Muñoz,   Nueva
Ecija.42
Equally   important,   the   Court   takes   judicial   notice   of   the   final
ruling of the RTC Branch 55 in the case for recovery of ownership,
that the subject property has belonged to the Heirs of Nivera since
the   l950s.43 This   automatically   negates   Felicitas'   claim   that   the
property is her family home.
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