G.R. No.

163744

METROPOLITAN BANK AND TRUST CO., vs. NICHOLSON PASCUAL a.k.a. NELSON PASCUAL

Facts:
During the marriage of respondent Nicholson Pascual and Florencia Nevalga, Florencia bought a lot
and a title was then issued in the name of Florencia, “married to Nelson Pascual” a.k.a. Nicholson
Pascual. Eventually, their marriage was nullified under Article 36 of the Family Code. The RTC ordered
the dissolution and liquidation of their conjugal partnership of gains but they were not able to do so.

Two years later, Florencia obtained a loan from Metrobank which was secured through a mortgage of
the aforementioned lot. To secure the loan, she submitted a copy of her title, the decision nullifying
her marriage, and a document denominated as “Waiver” purportedly executed by Nicholson which
covered the conjugal properties but did not include the lot in question.

Due to her failure to pay their loan obligation, Metrobank initiated foreclosure proceedings. Nicholson
sought to nullify the mortgage of the lot, alleging that it is still conjugal property which was mortgaged
without his consent. For its part, Metrobank alleged that the lot was paraphernal since it was registered
in Florencia’s name and that they approved the mortgage in good faith.

Issue:

a) WON the lot is conjugal property

b) WON the declaration of nullity of marriage ipso facto dissolved the regime of absolute
community of property

Held:

a) The disputed property is conjugal. Only proof of acquisition during the marriage is needed to
raise the presumption that the property is conjugal. If proof obtains on the acquisition of the
property during the existence of the marriage, then the presumption of conjugal ownership
applies. Moreover, Metrobank is in virtual estoppel to question the conjugal ownership of the
disputed lot, the bank having named the Nicholson in the foreclosure proceedings below as
either the spouse of Florencia or her co-mortgagor.

b) Termination of conjugal property regime does not ipso facto end the nature of conjugal
ownership. 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. In the case at bar, Florencia constituted the
mortgage on the disputed lot before the liquidation of the partnership. Florencia has the right
to mortgage or even sell her one-half (1/2) undivided interest in the disputed property even
without the consent of Nicholson. However, the rights of Metrobank, as mortgagee, are limited
only to the 1/2 undivided portion that Florencia owned. Accordingly, the mortgage contract
insofar as it covered the remaining 1/2 undivided portion of the lot is null and void, Nicholson
not having consented to the mortgage of his undivided half.