IX. Rights and Obligations between Husband and Wife (under IV.

Marriages)
A. Domicile

1) Romualdez v RTC, GR No. 104960, 14 Sept 1993

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 104960 September 14, 1993

PHILIP G. ROMUALDEZ, petitioner,
vs.
REGIONAL TRIAL COURT, BRANCH 7, TACLOBAN CITY, DONATO ADVINCULA, BOARD
OF ELECTION INSPECTORS, PRECINCT No. 9, MALBOG, TOLOSA, LEYTE, and the
MUNICIPAL REGISTRAR COMELEC, TOLOSA, LEYTE, respondents.

Otilia Dimayuga-Molo for petitioner.

The Solicitor General for respondents.

VITUG, J.:

An event in this decade, which future generations would likely come to know simply as the
"EDSA People's Power Revolution of 1986," has dramatically changed the course of our nation's
history. So, too, not a few of our countrymen have by it been left alone in their own personal
lives. One such case is that of the petitioner in this special civil action for certiorari.

The petitioner is Philip Romualdez, a natural born citizen of the Philippines, the son of the former
Governor of Leyte, Benjamin "Kokoy" Romualdez, and nephew of the then First Lady Imelda
Marcos. Sometime in the early part of 1980, the petitioner, in consonance with his decision to
establish his legal residence at Barangay Malbog, Tolosa, Leyte,  caused the construction of his
1

residential house therein. He soon thereafter also served as Barangay Captain of the place. In
the 1984 Batasan Election and 1986 "snap" Presidential Election, Romualdez acted as the
Campaign Manager of the Kilusang Bagong Lipunan (KBL) in Leyte where he voted. 2

When the eventful days from the 21st to the 24th of February, 1986, came or were about to come
to a close, some relatives and associates of the deposed President, fearing for their personal
safety, whether founded or not, "fled" the country. Petitioner Romualdez, for one, together with
his immediate family, left the Philippines and sought "asylum" in the United States which the
United States (U.S.) government granted.  While abroad, he took special studies on the
3

development of Leyte-Samar and international business finance. 4

In the early part of 1987, Romualdez attempted to come back to the Philippines to run for a
congressional seat in Leyte. On 23 March 1987, he finally decided to book a flight back to the
Philippines but the flight was somehow aborted. 5
On 25 September 1991, Romualdez received a letter from Mr. Charles Cobb, District Director of
the U.S. Immigration and Naturalization Service, informing him that he should depart from the
U.S. at his expense on or before 23 August 1992, thus:

. . . Failure to depart on or before the specified date may result in the withdrawal
of voluntary departure and action being taken to effect your deportation. In
accordance with a decision made to your case, you are required to depart from
the United States at your expense on or before 23 August 1992. 6

Upon receipt of the letter, Romualdez departed from the U.S. for the Philippines, arriving on
December 1991 apparently without any government document. 7

When Romualdez arrived in the Philippines, he did not delay his return to his residence at
Malbog, Tolosa, Leyte. During the registration of voters conducted by the Commission on
Election ("COMELEC") on 01 February 1992 for the Synchronized National and Local Election
scheduled for 11 May 1992, petitioner registered himself anew as a voter at Precinct No. 9 of
Malbog, Tolosa, Leyte. The chairman of the Board of Election Inspectors, who had known
Romualdez to be a resident of the place and, in fact, an elected Barangay Chairman of Malbog in
1982, allowed him to be registered.

Romualdez's registration, however, was not to be unquestioned. On 21 February 1992, herein

private respondent Donato Advincula ("Advincula") filed a petition with the Municipal Trial Court
of Tolosa, Leyte, praying that Romualdez be excluded from the list of voters in Precinct No. 9 of
Malbog, Tolosa, Leyte, under BP 881 and RA 7166.  Advincula alleged that Romualdez was a
8

resident of Massachusetts, U.S.A.; that his profession and occupation was in the U.S.A.; that he
had just recently arrived in the Philippines; and that he did not have the required one-year
residence in the Philippines and the six-month residence in Tolosa to qualify him to register as a
voter in Barangay Malbog, Tolosa, Leyte. 9

On 25 February 1992, Romualdez filed an answer, contending that he has been a resident of
Tolosa, Leyte, since the early 1980's, and that he has not abandoned his said residence by his
physical absence therefrom during the period from 1986 up to the third week of December
1991. 10

After due hearing, the Municipal Court of Tolosa, Leyte rendered a decision   on 28 February
11

1992, the dispositive portion of which reads:

WHEREFORE PREMISES CONSIDERED, the court finds the respondent to be a

resident of Brgy. Malbog, Tolosa, Leyte and qualified to register as a voter
thereat. Hence, the instant petition for exclusion of Philip G. Romualdez from the
list of voter of Precinct No. 9, Malbog, Tolosa, Leyte is hereby ordered DENIED
and petition DISMISSED.

SO ORDERED.

Upon receipt of the adverse decision, Advincula appealed the case to the respondent court.

On 03 April 1992, the respondent court rendered the assailed decision,   thus:
12

WHEREFORE, this Court finds respondent Philip Romualdez disqualified to

register as a voter for the 1992 elections and hereby reverses the decision of the
lower court in toto.

The Municipal Registrar of the Commission on Elections of Tolosa, Leyte, is

hereby ordered to delete and cancel the name of respondent Philip G.
 Romualdez from the list of qualified voters registered February 1, 1992, at
Precinct 9, barangay Malbog, Tolosa, Leyte.

SO ORDERED.

Hence, this recourse.

On 7 May 1992, this Court issued a temporary restraining order directing respondent Regional
Trial Court Judge Pedro Espino to cease and desist from enforcing questioned decision. 13

The petitioner has raised several issues which have been well synthesized by the Solicitor
General into —

(1) Whether or not the MTC and RTC acquired jurisdiction over, respectively, Case No. 01-S.
1992 and Case No. 92-03-42, the petition having been filed by one who did not allege to be
himself a registered voter of the municipality concerned; and

(2) Whether or not the respondent court erred in finding the petitioner to have voluntarily left the
country and abandoned his residence in Malbog, Tolosa, Leyte.

The petition is impressed with merit.

Anent the first issue, the petitioner assails for the first time the jurisdiction of the respondent
Court and the MTC of Tolosa, Leyte, in taking cognizance of the case, despite an absence of any
allegation in the petition filed with the MTC that Advincula was himself a registered voter in
Precinct No. 9 of Barangay Malbog, Tolosa, Leyte conformably with Section 142 of the Omnibus
Election Code.  14

When respondent Advincula filed the petition with the MTC for the exclusion of herein petitioner
Romualdez, the latter countered by filing his answer   and praying for the denial of the petition,
15

without raising the issue of jurisdiction. But what can be telling is that when the MTC decision,
denying the petition for disqualification, went on appeal to the RTC, Romualdez, in his own
appeal-memorandum, explicitly prayed that the MTC decision be affirmed. This unassailable
incident leads us to reiterate that "while lack of jurisdiction may be assailed at any stage, a
party's active participation in the proceedings before a court without jurisdiction will estop such
party from assailing such lack of jurisdiction."   Undoubtedly, the petitioner is now estopped from
16

questioning the jurisdiction of the respondent not only by his active participation in the
proceedings thereat but, more importantly, in having sought an affirmative relief himself when the
appeal was made to the latter court whose jurisdiction he, in effect, invoked. Furthermore, the
question is not really as much the jurisdiction of the courts below as merely the locus standi of
the complainant in the proceedings, a matter that, at this stage, should be considered foreclosed.

In any case, we consider primordial the second issue of whether or not Romualdez voluntarily left
the country and abandoned his residence in Malbog, Tolosa, Leyte. Here, this time, we find for
the petitioner.

The Solicitor General himself sustains the view of petitioner Romualdez. Expressing surprise at
this stance given by the Solicitor General, respondent Advincula posits non
sequitur argument   in his comment assailing instead the person of Solicitor Edgar Chua. If it
17

would have any value, at all, in disabusing the minds of those concerned, it may well be to recall
what this Court said in Rubio vs. Sto. Tomas:  18

It is also incumbent upon the Office of the Solicitor General to present to the
Court the position that will legally uphold the best interest of the government,
although it may run counter to a client's position.
 In election cases, the Court treats domicile and residence as synonymous terms, thus: "(t)he
term "residence" as used in the election law is synonymous with "domicile", which imports not
only an intention to reside in a fixed place but also personal presence in that place, coupled with
conduct indicative of such intention."   "Domicile" denotes a fixed permanent residence to which
19

when absent for business or pleasure, or for like reasons, one intends to return.   That
20

residence, in the case of the petitioner, was established during the early 1980's to be at
Barangay Malbog, Tolosa, Leyte. Residence thus acquired, however, may be lost by adopting
another choice of domicile. In order, in turn, to acquire a new domicile by choice, there must
concur (1) residence or bodily presence in the new locality, (2) an intention to remain there, and
(3) an intention to abandon the old domicile.   In other words, there must basically be animus
21

manendi coupled with animus non revertendi. The purpose to remain in or at the domicile of

choice must be for an indefinite period of time; the change of residence must be voluntary; and
the residence at the place chosen for the new domicile must be actual.  22

The political situation brought about by the "People's Power Revolution" must have truly caused
great apprehension to the Romualdezes, as well as a serious concern over the safety and
welfare of the members of their families. Their going into self-exile until conditions favorable to
them would have somehow stabilized is understandable. Certainly, their sudden departure from
the country cannot be described as "voluntary," or as "abandonment of residence" at least in the
context that these terms are used in applying the concept of "domicile by choice."

We have closely examined the records, and we find not that much to convince us that the
petitioner had, in fact, abandoned his residence in the Philippines and established his domicile
elsewhere.

It must be emphasized that the right to vote is a most precious political right, as well as a
bounden duty of every citizen, enabling and requiring him to participate in the process of
government so as to ensure that the government can truly be said to derive its power solely from
the consent of the governed.   We, therefore, must commend respondent Advincula for spending
23

time and effort even all the way up to this Court, for as the right of suffrage is not to be abridged,
so also must we safeguard and preserve it but only on behalf of those entitled and bound to
exercise it.

WHEREFORE, finding merit on the petition the same is hereby GRANTED DUE COURSE; of the
Decision of the respondent Regional Trial Court dated 03 April 1992 is hereby REVERSED and
SET ASIDE, and the Decision of the Municipal Trial Court dated 28 February 1992 is hereby
REINSTATED and the Temporary Restraining Order issued by the Court in this case is
correspondingly made PERMANENT. No pronouncement as to costs.

SO ORDERED.

2) Romualdez-Marcos vs COMELEC, main opinion; concurring opinion of J. Romero,

GR No. 119976, 18 Sept 1995

EN BANC

G.R. No. 119976 September 18, 1995

IMELDA ROMUALDEZ-MARCOS, petitioner,
vs.
COMMISSION ON ELECTIONS and CIRILO ROY MONTEJO, respondents.
KAPUNAN, J.:

A constitutional provision should be construed as to give it effective operation and suppress the
mischief at which it is aimed.  The 1987 Constitution mandates that an aspirant for election to the
1

House of Representatives be "a registered voter in the district in which he shall be elected, and a
resident thereof for a period of not less than one year immediately preceding the election."  The
2

mischief which this provision — reproduced verbatim from the 1973 Constitution — seeks to
prevent is the possibility of a "stranger or newcomer unacquainted with the conditions and needs
of a community and not identified with the latter, from an elective office to serve that community." 3

Petitioner Imelda Romualdez-Marcos filed her Certificate of Candidacy for the position of
Representative of the First District of Leyte with the Provincial Election Supervisor on March 8,
1995, providing the following information in item no. 8: 4

RESIDENCE IN THE CONSTITUENCY WHERE I SEEK TO BE ELECTED

IMMEDIATELY PRECEDING THE ELECTION: __________ Years
and seven Months.

On March 23, 1995, private respondent Cirilo Roy Montejo, the incumbent Representative of the
First District of Leyte and a candidate for the same position, filed a "Petition for Cancellation and
Disqualification"  with the Commission on Elections alleging that petitioner did not meet the
5

constitutional requirement for residency. In his petition, private respondent contended that Mrs.
Marcos lacked the Constitution's one year residency requirement for candidates for the House of
Representatives on the evidence of declarations made by her in Voter Registration Record 94-
No. 3349772  and in her Certificate of Candidacy. He prayed that "an order be issued declaring
6

(petitioner) disqualified and canceling the certificate of candidacy."7

On March 29, 1995, petitioner filed an Amended/Corrected Certificate of Candidacy, changing

the entry "seven" months to "since childhood" in item no. 8 of the amended certificate.  On the
8

same day, the Provincial Election Supervisor of Leyte informed petitioner that:

[T]his office cannot receive or accept the aforementioned Certificate of Candidacy

on the ground that it is filed out of time, the deadline for the filing of the same
having already lapsed on March 20, 1995. The Corrected/Amended Certificate of
Candidacy should have been filed on or before the March 20, 1995 deadline. 9

Consequently, petitioner filed the Amended/Corrected Certificate of Candidacy with the

COMELEC's Head Office in Intramuros, Manila on
March 31, 1995. Her Answer to private respondent's petition in SPA No. 95-009 was likewise
filed with the head office on the same day. In said Answer, petitioner averred that the entry of the
word "seven" in her original Certificate of Candidacy was the result of an "honest
misinterpretation"   which she sought to rectify by adding the words "since childhood" in her
10

Amended/Corrected Certificate of Candidacy and that "she has always maintained Tacloban City
as her domicile or residence.   Impugning respondent's motive in filing the petition seeking her
11

disqualification, she noted that:

When respondent (petitioner herein) announced that she was intending to

register as a voter in Tacloban City and run for Congress in the First District of
Leyte, petitioner immediately opposed her intended registration by writing a letter
stating that "she is not a resident of said city but of Barangay Olot, Tolosa, Leyte.
After respondent had registered as a voter in Tolosa following completion of her
six month actual residence therein, petitioner filed a petition with the COMELEC
to transfer the town of Tolosa from the First District to the Second District and
pursued such a move up to the Supreme Court, his purpose being to remove
respondent as petitioner's opponent in the congressional election in the First
District. He also filed a bill, along with other Leyte Congressmen, seeking the
 creation of another legislative district to remove the town of Tolosa out of the First
District, to achieve his purpose. However, such bill did not pass the Senate.
Having failed on such moves, petitioner now filed the instant petition for the same
objective, as it is obvious that he is afraid to submit along with respondent for the
judgment and verdict of the electorate of the First District of Leyte in an honest,
orderly, peaceful, free and clean elections on May 8, 1995.  12

On April 24, 1995, the Second Division of the Commission on Elections (COMELEC), by a vote
of 2 to 1,   came up with a Resolution 1) finding private respondent's Petition for Disqualification
13

in SPA 95-009 meritorious; 2) striking off petitioner's Corrected/Amended Certificate of

Candidacy of March 31, 1995; and 3) canceling her original Certificate of Candidacy.   Dealing
14

with two primary issues, namely, the validity of amending the original Certificate of Candidacy
after the lapse of the deadline for filing certificates of candidacy, and petitioner's compliance with
the one year residency requirement, the Second Division held:

Respondent raised the affirmative defense in her Answer that the printed word
"Seven" (months) was a result of an "honest misinterpretation or honest mistake"
on her part and, therefore, an amendment should subsequently be allowed. She
averred that she thought that what was asked was her "actual and physical"
presence in Tolosa and not residence of origin or domicile in the First Legislative
District, to which she could have responded "since childhood." In an
accompanying affidavit, she stated that her domicile is Tacloban City, a
component of the First District, to which she always intended to return whenever
absent and which she has never abandoned. Furthermore, in her memorandum,
she tried to discredit petitioner's theory of disqualification by alleging that she has
been a resident of the First Legislative District of Leyte since childhood, although
she only became a resident of the Municipality of Tolosa for seven months. She
asserts that she has always been a resident of Tacloban City, a component of the
First District, before coming to the Municipality of Tolosa.

Along this point, it is interesting to note that prior to her registration in Tolosa,
respondent announced that she would be registering in Tacloban City so that she
can be a candidate for the District. However, this intention was rebuffed when
petitioner wrote the Election Officer of Tacloban not to allow respondent since
she is a resident of Tolosa and not Tacloban. She never disputed this claim and
instead implicitly acceded to it by registering in Tolosa.

This incident belies respondent's claim of "honest misinterpretation or honest

mistake." Besides, the Certificate of Candidacy only asks for RESIDENCE. Since
on the basis of her Answer, she was quite aware of "residence of origin" which
she interprets to be Tacloban City, it is curious why she did not cite Tacloban City
in her Certificate of Candidacy. Her explanation that she thought what was asked
was her actual and physical presence in Tolosa is not easy to believe because
there is none in the question that insinuates about Tolosa. In fact, item no. 8 in
the Certificate of Candidacy speaks clearly of "Residency in the
CONSTITUENCY where I seek to be elected immediately preceding the
election." Thus, the explanation of respondent fails to be persuasive.

From the foregoing, respondent's defense of an honest mistake or

misinterpretation, therefore, is devoid of merit.

To further buttress respondent's contention that an amendment may be made,

she cited the case of Alialy v. COMELEC (2 SCRA 957). The reliance of
respondent on the case of Alialy is misplaced. The case only applies to the
"inconsequential deviations which cannot affect the result of the election, or
deviations from provisions intended primarily to secure timely and orderly conduct
of elections." The Supreme Court in that case considered the amendment only as
a matter of form. But in the instant case, the amendment cannot be considered
as a matter of form or an inconsequential deviation. The change in the number of
years of residence in the place where respondent seeks to be elected is a
substantial matter which determines her qualification as a candidacy, specially
those intended to suppress, accurate material representation in the original
certificate which adversely affects the filer. To admit the amended certificate is to
condone the evils brought by the shifting minds of manipulating candidate, of the
detriment of the integrity of the election.

Moreover, to allow respondent to change the seven (7) month period of her
residency in order to prolong it by claiming it was "since childhood" is to allow an
untruthfulness to be committed before this Commission. The arithmetical
accuracy of the 7 months residency the respondent indicated in her certificate of
candidacy can be gleaned from her entry in her Voter's Registration Record
accomplished on January 28, 1995 which reflects that she is a resident of Brgy.
Olot, Tolosa, Leyte for 6 months at the time of the said registration (Annex A,
Petition). Said accuracy is further buttressed by her letter to the election officer of
San Juan, Metro Manila, dated August 24, 1994, requesting for the cancellation
of her registration in the Permanent List of Voters thereat so that she can be re-
registered or transferred to Brgy. Olot, Tolosa, Leyte. The dates of these three (3)
different documents show the respondent's consistent conviction that she has
transferred her residence to Olot, Tolosa, Leyte from Metro Manila only for such
limited period of time, starting in the last week of August 1994 which on March 8,
1995 will only sum up to 7 months. The Commission, therefore, cannot be
persuaded to believe in the respondent's contention that it was an error.

xxx xxx xxx

Based on these reasons the Amended/Corrected Certificate of Candidacy cannot

be admitted by this Commission.

xxx xxx xxx

Anent the second issue, and based on the foregoing discussion, it is clear that
respondent has not complied with the one year residency requirement of the
Constitution.

In election cases, the term "residence" has always been considered as

synonymous with "domicile" which imports not only the intention to reside in a
fixed place but also personal presence in-that place, coupled with conduct
indicative of such intention. Domicile denotes a fixed permanent residence to
which when absent for business or pleasure, or for like reasons, one intends to
return. (Perfecto Faypon vs. Eliseo Quirino, 96 Phil 294; Romualdez vs. RTC-
Tacloban, 226 SCRA 408). In respondent's case, when she returned to the
Philippines in 1991, the residence she chose was not Tacloban but San Juan,
Metro Manila. Thus, her animus revertendi is pointed to Metro Manila and not
Tacloban.

This Division is aware that her claim that she has been a resident of the First
District since childhood is nothing more than to give her a color of qualification
where she is otherwise constitutionally disqualified. It cannot hold ground in the
face of the facts admitted by the respondent in her affidavit. Except for the time
that she studied and worked for some years after graduation in Tacloban City,
she continuously lived in Manila. In 1959, after her husband was elected Senator,
she lived and resided in San Juan, Metro Manila where she was a registered
 voter. In 1965, she lived in San Miguel, Manila where she was again a registered
voter. In 1978, she served as member of the Batasang Pambansa as the
representative of the City of Manila and later on served as the Governor of Metro
Manila. She could not have served these positions if she had not been a resident
of the City of Manila. Furthermore, when she filed her certificate of candidacy for
the office of the President in 1992, she claimed to be a resident of San Juan,
Metro Manila. As a matter of fact on August 24, 1994, respondent wrote a letter
with the election officer of San Juan, Metro Manila requesting for the cancellation
of her registration in the permanent list of voters that she may be re-registered or
transferred to Barangay Olot, Tolosa, Leyte. These facts manifest that she could
not have been a resident of Tacloban City since childhood up to the time she filed
her certificate of candidacy because she became a resident of many places,
including Metro Manila. This debunks her claim that prior to her residence in
Tolosa, Leyte, she was a resident of the First Legislative District of Leyte since
childhood.

In this case, respondent's conduct reveals her lack of intention to make Tacloban
her domicile. She registered as a voter in different places and on several
occasions declared that she was a resident of Manila. Although she spent her
school days in Tacloban, she is considered to have abandoned such place when
she chose to stay and reside in other different places. In the case of Romualdez
vs. RTC (226 SCRA 408) the Court explained how one acquires a new domicile
by choice. There must concur: (1) residence or bodily presence in the new
locality; (2) intention to remain there; and (3) intention to abandon the old
domicile. In other words there must basically be animus manendi with animus
non revertendi. When respondent chose to stay in Ilocos and later on in Manila,
coupled with her intention to stay there by registering as a voter there and
expressly declaring that she is a resident of that place, she is deemed to have
abandoned Tacloban City, where she spent her childhood and school days, as
her place of domicile.

Pure intention to reside in that place is not sufficient, there must likewise be
conduct indicative of such intention. Respondent's statements to the effect that
she has always intended to return to Tacloban, without the accompanying
conduct to prove that intention, is not conclusive of her choice of residence.
Respondent has not presented any evidence to show that her conduct, one year
prior the election, showed intention to reside in Tacloban. Worse, what was
evident was that prior to her residence in Tolosa, she had been a resident of
Manila.

It is evident from these circumstances that she was not a resident of the First
District of Leyte "since childhood."

To further support the assertion that she could have not been a resident of the
First District of Leyte for more than one year, petitioner correctly pointed out that
on January 28, 1995 respondent registered as a voter at precinct No. 18-A of
Olot, Tolosa, Leyte. In doing so, she placed in her Voter Registration Record that
she resided in the municipality of Tolosa for a period of six months. This may be
inconsequential as argued by the respondent since it refers only to her residence
in Tolosa, Leyte. But her failure to prove that she was a resident of the First
District of Leyte prior to her residence in Tolosa leaves nothing but a convincing
proof that she had been a resident of the district for six months only.  
15

In a Resolution promulgated a day before the May 8, 1995 elections, the COMELEC en
banc denied petitioner's Motion for Reconsideration   of the April 24, 1995 Resolution declaring
16
her not qualified to run for the position of Member of the House of Representatives for the First
Legislative District of Leyte.   The Resolution tersely stated:
17

After deliberating on the Motion for Reconsideration, the Commission

RESOLVED to DENY it, no new substantial matters having been raised therein to
warrant re-examination of the resolution granting the petition for disqualification.  18

On May 11, 1995, the COMELEC issued a Resolution allowing petitioner's proclamation should
the results of the canvass show that she obtained the highest number of votes in the
congressional elections in the First District of Leyte. On the same day, however, the COMELEC
reversed itself and issued a second Resolution directing that the proclamation of petitioner be
suspended in the event that she obtains the highest number of votes.  19

In a Supplemental Petition dated 25 May 1995, petitioner averred that she was the overwhelming
winner of the elections for the congressional seat in the First District of Leyte held May 8, 1995
based on the canvass completed by the Provincial Board of Canvassers on May 14, 1995.
Petitioner alleged that the canvass showed that she obtained a total of 70,471 votes compared to
the 36,833 votes received by Respondent Montejo. A copy of said Certificate of Canvass was
annexed to the Supplemental Petition.

On account of the Resolutions disqualifying petitioner from running for the congressional seat of
the First District of Leyte and the public respondent's Resolution suspending her proclamation,
petitioner comes to this court for relief.

Petitioner raises several issues in her Original and Supplemental Petitions. The principal issues
may be classified into two general areas:

I. The issue of Petitioner's qualifications

Whether or not petitioner was a resident, for election purposes, of the First
District of Leyte for a period of one year at the time of the May 9, 1995 elections.

II. The Jurisdictional Issue

a) Prior to the elections

Whether or not the COMELEC properly exercised its jurisdiction in disqualifying

petitioner outside the period mandated by the Omnibus Election Code for
disqualification cases under Article 78 of the said Code.

b) After the Elections

Whether or not the House of Representatives Electoral Tribunal assumed

exclusive jurisdiction over the question of petitioner's qualifications after the May
8, 1995 elections.

I. Petitioner's qualification

A perusal of the Resolution of the COMELEC's Second Division reveals a startling confusion in
the application of settled concepts of "Domicile" and "Residence" in election law. While the
COMELEC seems to be in agreement with the general proposition that for the purposes of
election law, residence is synonymous with domicile, the Resolution reveals a tendency to
substitute or mistake the concept of domicile for actual residence, a conception not intended for
the purpose of determining a candidate's qualifications for election to the House of
Representatives as required by the 1987 Constitution. As it were, residence, for the purpose of
meeting the qualification for an elective position, has a settled meaning in our jurisdiction.

Article 50 of the Civil Code decrees that "[f]or the exercise of civil rights and the fulfillment of civil
obligations, the domicile of natural persons is their place of habitual residence." In Ong
vs. Republic   this court took the concept of domicile to mean an individual's "permanent home",
20

"a place to which, whenever absent for business or for pleasure, one intends to return, and
depends on facts and circumstances in the sense that they disclose intent."   Based on the
21

foregoing, domicile includes the twin elements of "the fact of residing or physical presence in a
fixed place" and animus manendi, or the intention of returning there permanently.

Residence, in its ordinary conception, implies the factual relationship of an individual to a certain
place. It is the physical presence of a person in a given area, community or country. The
essential distinction between residence and domicile in law is that residence involves the intent
to leave when the purpose for which the resident has taken up his abode ends. One may seek a
place for purposes such as pleasure, business, or health. If a person's intent be to remain, it
becomes his domicile; if his intent is to leave as soon as his purpose is established it is
residence.   It is thus, quite perfectly normal for an individual to have different residences in
22

various places. However, a person can only have a single domicile, unless, for various reasons,
he successfully abandons his domicile in favor of another domicile of choice. In Uytengsu
vs. Republic,   we laid this distinction quite clearly:
23

There is a difference between domicile and residence. "Residence" is used to

indicate a place of abode, whether permanent or temporary; "domicile" denotes a
fixed permanent residence to which, when absent, one has the intention of
returning. A man may have a residence in one place and a domicile in another.
Residence is not domicile, but domicile is residence coupled with the intention to
remain for an unlimited time. A man can have but one domicile for the same
purpose at any time, but he may have numerous places of residence. His place
of residence is generally his place of domicile, but it is not by any means
necessarily so since no length of residence without intention of remaining will
constitute domicile.

For political purposes the concepts of residence and domicile are dictated by the peculiar criteria
of political laws. As these concepts have evolved in our election law, what has clearly and
unequivocally emerged is the fact that residence for election purposes is used synonymously
with domicile.

In Nuval vs. Guray,   the Court held that "the term residence. . . is synonymous with domicile
24

which imports not only intention to reside in a fixed place, but also personal presence in that
place, coupled with conduct indicative of such intention."   Larena vs. Teves   reiterated the
25 26

same doctrine in a case involving the qualifications of the respondent therein to the post of
Municipal President of Dumaguete, Negros Oriental. Faypon vs. Quirino,   held that the absence
27

from residence to pursue studies or practice a profession or registration as a voter other than in
the place where one is elected does not constitute loss of residence.   So settled is the concept
28

(of domicile) in our election law that in these and other election law cases, this Court has stated
that the mere absence of an individual from his permanent residence without the intention to
abandon it does not result in a loss or change of domicile.

The deliberations of the 1987 Constitution on the residence qualification for certain elective
positions have placed beyond doubt the principle that when the Constitution speaks of
"residence" in election law, it actually means only "domicile" to wit:

Mr. Nolledo: With respect to Section 5, I remember that in the 1971 Constitutional
Convention, there was an attempt to require residence in the place not less than
one year immediately preceding the day of the elections. So my question is: What
 is the Committee's concept of residence of a candidate for the legislature? Is it
actual residence or is it the concept of domicile or constructive residence?

Mr. Davide: Madame President, insofar as the regular members of the National
Assembly are concerned, the proposed section merely provides, among others,
"and a resident thereof", that is, in the district for a period of not less than one
year preceding the day of the election. This was in effect lifted from the 1973
Constitution, the interpretation given to it was domicile.  29

xxx xxx xxx

Mrs. Rosario Braid: The next question is on Section 7, page 2. I think

Commissioner Nolledo has raised the same point that "resident" has been
interpreted at times as a matter of intention rather than actual residence.

Mr. De los Reyes: Domicile.

Ms. Rosario Braid: Yes, So, would the gentleman consider at the proper time to
go back to actual residence rather than mere intention to reside?

Mr. De los Reyes: But we might encounter some difficulty especially considering
that a provision in the Constitution in the Article on Suffrage says that Filipinos
living abroad may vote as enacted by law. So, we have to stick to the original
concept that it should be by domicile and not physical residence.  30

In Co vs. Electoral Tribunal of the House of Representatives,   this Court concluded that the
31

framers of the 1987 Constitution obviously adhered to the definition given to the term residence
in election law, regarding it as having the same meaning as domicile.  32

In the light of the principles just discussed, has petitioner Imelda Romualdez Marcos satisfied the
residency requirement mandated by Article VI, Sec. 6 of the 1987 Constitution? Of what
significance is the questioned entry in petitioner's Certificate of Candidacy stating her residence
in the First Legislative District of Leyte as seven (7) months?

It is the fact of residence, not a statement in a certificate of candidacy which ought to be decisive
in determining whether or not and individual has satisfied the constitution's residency
qualification requirement. The said statement becomes material only when there is or appears to
be a deliberate attempt to mislead, misinform, or hide a fact which would otherwise render a
candidate ineligible. It would be plainly ridiculous for a candidate to deliberately and knowingly
make a statement in a certificate of candidacy which would lead to his or her disqualification.

It stands to reason therefore, that petitioner merely committed an honest mistake in jotting the
word "seven" in the space provided for the residency qualification requirement. The
circumstances leading to her filing the questioned entry obviously resulted in the subsequent
confusion which prompted petitioner to write down the period of her actual stay in Tolosa, Leyte
instead of her period of residence in the First district, which was "since childhood" in the space
provided. These circumstances and events are amply detailed in the COMELEC's Second
Division's questioned resolution, albeit with a different interpretation. For instance, when herein
petitioner announced that she would be registering in Tacloban City to make her eligible to run in
the First District, private respondent Montejo opposed the same, claiming that petitioner was a
resident of Tolosa, not Tacloban City. Petitioner then registered in her place of actual residence
in the First District, which is Tolosa, Leyte, a fact which she subsequently noted down in her
Certificate of Candidacy. A close look at said certificate would reveal the possible source of the
confusion: the entry for residence (Item No. 7) is followed immediately by the entry for residence
in the constituency where a candidate seeks election thus:
 7. RESIDENCE (complete Address): Brgy. Olot, Tolosa, Leyte

POST OFFICE ADDRESS FOR ELECTION PURPOSES: Brgy. Olot, Tolosa,

Leyte

8. RESIDENCE IN THE CONSTITUENCY WHERE I SEEK TO

BE ELECTED IMMEDIATELY PRECEDING THE ELECTION:_________ Years
and Seven Months.

Having been forced by private respondent to register in her place of actual residence in Leyte
instead of petitioner's claimed domicile, it appears that petitioner had jotted down her period of
stay in her legal residence or domicile. The juxtaposition of entries in Item 7 and Item 8 — the
first requiring actual residence and the second requiring domicile — coupled with the
circumstances surrounding petitioner's registration as a voter in Tolosa obviously led to her
writing down an unintended entry for which she could be disqualified. This honest mistake should
not, however, be allowed to negate the fact of residence in the First District if such fact were
established by means more convincing than a mere entry on a piece of paper.

We now proceed to the matter of petitioner's domicile.

In support of its asseveration that petitioner's domicile could not possibly be in the First District of
Leyte, the Second Division of the COMELEC, in its assailed Resolution of April 24,1995
maintains that "except for the time when (petitioner) studied and worked for some years after
graduation in Tacloban City, she continuously lived in Manila." The Resolution additionally cites
certain facts as indicative of the fact that petitioner's domicile ought to be any place where she
lived in the last few decades except Tacloban, Leyte. First, according to the Resolution,
petitioner, in 1959, resided in San Juan, Metro Manila where she was also registered voter.
Then, in 1965, following the election of her husband to the Philippine presidency, she lived in
San Miguel, Manila where she as a voter. In 1978 and thereafter, she served as a member of the
Batasang Pambansa and Governor of Metro Manila. "She could not, have served these positions
if she had not been a resident of Metro Manila," the COMELEC stressed. Here is where the
confusion lies.

We have stated, many times in the past, that an individual does not lose his domicile even if he
has lived and maintained residences in different places. Residence, it bears repeating, implies a
factual relationship to a given place for various purposes. The absence from legal residence or
domicile to pursue a profession, to study or to do other things of a temporary or semi-permanent
nature does not constitute loss of residence. Thus, the assertion by the COMELEC that "she
could not have been a resident of Tacloban City since childhood up to the time she filed her
certificate of candidacy because she became a resident of many places" flies in the face of
settled jurisprudence in which this Court carefully made distinctions between (actual) residence
and domicile for election law purposes. In Larena vs. Teves,   supra, we stressed:
33

[T]his court is of the opinion and so holds that a person who has his own house
wherein he lives with his family in a municipality without having ever had the
intention of abandoning it, and without having lived either alone or with his family
in another municipality, has his residence in the former municipality,
notwithstanding his having registered as an elector in the other municipality in
question and having been a candidate for various insular and provincial positions,
stating every time that he is a resident of the latter municipality.

More significantly, in Faypon vs. Quirino,   We explained that:

34

A citizen may leave the place of his birth to look for "greener pastures," as the
saying goes, to improve his lot, and that, of course includes study in other places,
practice of his avocation, or engaging in business. When an election is to be held,
 the citizen who left his birthplace to improve his lot may desire to return to his
native town to cast his ballot but for professional or business reasons, or for any
other reason, he may not absent himself from his professional or business
activities; so there he registers himself as voter as he has the qualifications to be
one and is not willing to give up or lose the opportunity to choose the officials who
are to run the government especially in national elections. Despite such
registration, the animus revertendi to his home, to his domicile or residence of
origin has not forsaken him. This may be the explanation why the registration of a
voter in a place other than his residence of origin has not been deemed sufficient
to constitute abandonment or loss of such residence. It finds justification in the
natural desire and longing of every person to return to his place of birth. This
strong feeling of attachment to the place of one's birth must be overcome by
positive proof of abandonment for another.

From the foregoing, it can be concluded that in its above-cited statements supporting its
proposition that petitioner was ineligible to run for the position of Representative of the First
District of Leyte, the COMELEC was obviously referring to petitioner's various places of (actual)
residence, not her domicile. In doing so, it not only ignored settled jurisprudence on residence in
election law and the deliberations of the constitutional commission but also the provisions of the
Omnibus Election Code (B.P. 881).  35

What is undeniable, however, are the following set of facts which establish the fact of petitioner's
domicile, which we lift verbatim from the COMELEC's Second Division's assailed Resolution:  36

In or about 1938 when respondent was a little over 8 years old, she established
her domicile in Tacloban, Leyte (Tacloban City). She studied in the Holy Infant
Academy in Tacloban from 1938 to 1949 when she graduated from high school.
She pursued her college studies in St. Paul's College, now Divine Word
University in Tacloban, where she earned her degree in Education. Thereafter,
she taught in the Leyte Chinese School, still in Tacloban City. In 1952 she went
to Manila to work with her cousin, the late speaker Daniel Z. Romualdez in his
office in the House of Representatives. In 1954, she married ex-President
Ferdinand E. Marcos when he was still a congressman of Ilocos Norte and
registered there as a voter. When her husband was elected Senator of the
Republic in 1959, she and her husband lived together in San Juan, Rizal where
she registered as a voter. In 1965, when her husband was elected President of
the Republic of the Philippines, she lived with him in Malacanang Palace and
registered as a voter in San Miguel, Manila.

[I]n February 1986 (she claimed that) she and her family were abducted and
kidnapped to Honolulu, Hawaii. In November 1991, she came home to Manila. In
1992, respondent ran for election as President of the Philippines and filed her
Certificate of Candidacy wherein she indicated that she is a resident and
registered voter of San Juan, Metro Manila.

Applying the principles discussed to the facts found by COMELEC, what is inescapable is that
petitioner held various residences for different purposes during the last four decades. None of
these purposes unequivocally point to an intention to abandon her domicile of origin in Tacloban,
Leyte. Moreover, while petitioner was born in Manila, as a minor she naturally followed the
domicile of her parents. She grew up in Tacloban, reached her adulthood there and eventually
established residence in different parts of the country for various reasons. Even during her
husband's presidency, at the height of the Marcos Regime's powers, petitioner kept her close ties
to her domicile of origin by establishing residences in Tacloban, celebrating her birthdays and
other important personal milestones in her home province, instituting well-publicized projects for
the benefit of her province and hometown, and establishing a political power base where her
siblings and close relatives held positions of power either through the ballot or by appointment,
always with either her influence or consent. These well-publicized ties to her domicile of origin
are part of the history and lore of the quarter century of Marcos power in our country. Either they
were entirely ignored in the COMELEC'S Resolutions, or the majority of the COMELEC did not
know what the rest of the country always knew: the fact of petitioner's domicile in Tacloban,
Leyte.

Private respondent in his Comment, contends that Tacloban was not petitioner's domicile of
origin because she did not live there until she was eight years old. He avers that after leaving the
place in 1952, she "abandoned her residency (sic) therein for many years and . . . (could not) re-
establish her domicile in said place by merely expressing her intention to live there again." We do
not agree.

First, minor follows the domicile of his parents. As domicile, once acquired is retained until a new
one is gained, it follows that in spite of the fact of petitioner's being born in Manila, Tacloban,
Leyte was her domicile of origin by operation of law. This domicile was not established only when
her father brought his family back to Leyte contrary to private respondent's averments.

Second, domicile of origin is not easily lost. To successfully effect a change of domicile, one
must demonstrate:  37

1. An actual removal or an actual change of domicile;

2. A bona fide intention of abandoning the former place of residence and

establishing a new one; and

3. Acts which correspond with the purpose.

In the absence of clear and positive proof based on these criteria, the residence of origin should
be deemed to continue. Only with evidence showing concurrence of all three requirements can
the presumption of continuity or residence be rebutted, for a change of residence requires an
actual and deliberate abandonment, and one cannot have two legal residences at the same
time.   In the case at bench, the evidence adduced by private respondent plainly lacks the
38

degree of persuasiveness required to convince this court that an abandonment of domicile of

origin in favor of a domicile of choice indeed occurred. To effect an abandonment requires the
voluntary act of relinquishing petitioner's former domicile with an intent to supplant the former
domicile with one of her own choosing (domicilium voluntarium).

In this connection, it cannot be correctly argued that petitioner lost her domicile of origin by
operation of law as a result of her marriage to the late President Ferdinand E. Marcos in 1952.
For there is a clearly established distinction between the Civil Code concepts of "domicile" and
"residence."   The presumption that the wife automatically gains the husband's domicile by
39

operation of law upon marriage cannot be inferred from the use of the term "residence" in Article
110 of the Civil Code because the Civil Code is one area where the two concepts are well
delineated. Dr. Arturo Tolentino, writing on this specific area explains:

In the Civil Code, there is an obvious difference between domicile and residence.
Both terms imply relations between a person and a place; but in residence, the
relation is one of fact while in domicile it is legal or juridical, independent of the
necessity of physical presence.  40

Article 110 of the Civil Code provides:

Art. 110. — The husband shall fix the residence of the family. But the court may
exempt the wife from living with the husband if he should live abroad unless in
the service of the Republic.
A survey of jurisprudence relating to Article 110 or to the concepts of domicile or residence as
they affect the female spouse upon marriage yields nothing which would suggest that the female
spouse automatically loses her domicile of origin in favor of the husband's choice of residence
upon marriage.

Article 110 is a virtual restatement of Article 58 of the Spanish Civil Code of 1889 which states:

La mujer esta obligada a seguir a su marido donde quiera que fije su residencia.
Los Tribunales, sin embargo, podran con justa causa eximirla de esta obligacion
cuando el marido transende su residencia a ultramar o' a pais extranjero .

Note the use of the phrase "donde quiera su fije de residencia" in the aforequoted article, which
means wherever (the husband) wishes to establish residence. This part of the article clearly
contemplates only actual residence because it refers to a positive act of fixing a family home or
residence. Moreover, this interpretation is further strengthened by the phrase "cuando el marido
translade su residencia" in the same provision which means, "when the husband shall
transfer his residence," referring to another positive act of relocating the family to another home
or place of actual residence. The article obviously cannot be understood to refer to domicile
which is a fixed, fairly-permanent concept when it plainly connotes the possibility of transferring
from one place to another not only once, but as often as the husband may deem fit to move his
family, a circumstance more consistent with the concept of actual residence.

The right of the husband to fix the actual residence is in harmony with the intention of the law to
strengthen and unify the family, recognizing the fact that the husband and the wife bring into the
marriage different domiciles (of origin). This difference could, for the sake of family unity, be
reconciled only by allowing the husband to fix a single place of actual residence.

Very significantly, Article 110 of the Civil Code is found under Title V under the heading: RIGHTS
AND OBLIGATIONS BETWEEN HUSBAND AND WIFE. Immediately preceding Article 110 is
Article 109 which obliges the husband and wife to live together, thus:

Art. 109. — The husband and wife are obligated to live together, observe mutual
respect and fidelity and render mutual help and support.

The duty to live together can only be fulfilled if the husband and wife are physically together. This
takes into account the situations where the couple has many residences (as in the case of the
petitioner). If the husband has to stay in or transfer to any one of their residences, the wife should
necessarily be with him in order that they may "live together." Hence, it is illogical to conclude
that Art. 110 refers to "domicile" and not to "residence." Otherwise, we shall be faced with a
situation where the wife is left in the domicile while the husband, for professional or other
reasons, stays in one of their (various) residences. As Dr. Tolentino further explains:

Residence and Domicile — Whether the word "residence" as used with reference
to particular matters is synonymous with "domicile" is a question of some
difficulty, and the ultimate decision must be made from a consideration of the
purpose and intent with which the word is used. Sometimes they are used
synonymously, at other times they are distinguished from one another.

xxx xxx xxx

Residence in the civil law is a material fact, referring to the physical presence of a
person in a place. A person can have two or more residences, such as a country
residence and a city residence. Residence is acquired by living in place; on the
other hand, domicile can exist without actually living in the place. The important
thing for domicile is that, once residence has been established in one place, there
 be an intention to stay there permanently, even if residence is also established in
some other place.  41

In fact, even the matter of a common residence between the husband and the wife during the
marriage is not an iron-clad principle; In cases applying the Civil Code on the question of a
common matrimonial residence, our jurisprudence has recognized certain situations   where the
42

spouses could not be compelled to live with each other such that the wife is either allowed to
maintain a residence different from that of her husband or, for obviously practical reasons, revert
to her original domicile (apart from being allowed to opt for a new one). In De la Vina
vs. Villareal   this Court held that "[a] married woman may acquire a residence or domicile
43

separate from that of her husband during the existence of the marriage where the husband has
given cause for divorce."   Note that the Court allowed the wife either to obtain new residence or
44

to choose a new domicile in such an event. In instances where the wife actually opts, .under the
Civil Code, to live separately from her husband either by taking new residence or reverting to her
domicile of origin, the Court has held that the wife could not be compelled to live with her
husband on pain of contempt. In Arroyo vs. Vasques de Arroyo   the Court held that:
45

Upon examination of the authorities, we are convinced that it is not within the
province of the courts of this country to attempt to compel one of the spouses to
cohabit with, and render conjugal rights to, the other. Of course where the
property rights of one of the pair are invaded, an action for restitution of such
rights can be maintained. But we are disinclined to sanction the doctrine that an
order, enforcible (sic) by process of contempt, may be entered to compel the
restitution of the purely personal right of consortium. At best such an order can be
effective for no other purpose than to compel the spouses to live under the same
roof; and he experience of those countries where the courts of justice have
assumed to compel the cohabitation of married people shows that the policy of
the practice is extremely questionable. Thus in England, formerly the
Ecclesiastical Court entertained suits for the restitution of conjugal rights at the
instance of either husband or wife; and if the facts were found to warrant it, that
court would make a mandatory decree, enforceable by process of contempt in
case of disobedience, requiring the delinquent party to live with the other and
render conjugal rights. Yet this practice was sometimes criticized even by the
judges who felt bound to enforce such orders, and in Weldon v. Weldon (9 P.D.
52), decided in 1883, Sir James Hannen, President in the Probate, Divorce and
Admiralty Division of the High Court of Justice, expressed his regret that the
English law on the subject was not the same as that which prevailed in Scotland,
where a decree of adherence, equivalent to the decree for the restitution of
conjugal rights in England, could be obtained by the injured spouse, but could not
be enforced by imprisonment. Accordingly, in obedience to the growing sentiment
against the practice, the Matrimonial Causes Act (1884) abolished the remedy of
imprisonment; though a decree for the restitution of conjugal rights can still be
procured, and in case of disobedience may serve in appropriate cases as the
basis of an order for the periodical payment of a stipend in the character of
alimony.

In the voluminous jurisprudence of the United States, only one court, so far as we
can discover, has ever attempted to make a preemptory order requiring one of
the spouses to live with the other; and that was in a case where a wife was
ordered to follow and live with her husband, who had changed his domicile to the
City of New Orleans. The decision referred to (Bahn v. Darby, 36 La. Ann., 70)
was based on a provision of the Civil Code of Louisiana similar to article 56 of the
Spanish Civil Code. It was decided many years ago, and the doctrine evidently
has not been fruitful even in the State of Louisiana. In other states of the
American Union the idea of enforcing cohabitation by process of contempt is
rejected. (21 Cyc., 1148).
 In a decision of January 2, 1909, the Supreme Court of Spain appears to have
affirmed an order of the Audiencia Territorial de Valladolid requiring a wife to
return to the marital domicile, and in the alternative, upon her failure to do so, to
make a particular disposition of certain money and effects then in her possession
and to deliver to her husband, as administrator of the ganancial property, all
income, rents, and interest which might accrue to her from the property which she
had brought to the marriage. (113 Jur. Civ., pp. 1, 11) But it does not appear that
this order for the return of the wife to the marital domicile was sanctioned by any
other penalty than the consequences that would be visited upon her in respect to
the use and control of her property; and it does not appear that her disobedience
to that order would necessarily have been followed by imprisonment for
contempt.

Parenthetically when Petitioner was married to then Congressman Marcos, in 1954, petitioner
was obliged — by virtue of Article 110 of the Civil Code — to follow her husband's actual place of
residence fixed by him. The problem here is that at that time, Mr. Marcos had several places of
residence, among which were San Juan, Rizal and Batac, Ilocos Norte. There is no showing
which of these places Mr. Marcos did fix as his family's residence. But assuming that Mr. Marcos
had fixed any of these places as the conjugal residence, what petitioner gained upon marriage
was actual residence. She did not lose her domicile of origin.

On the other hand, the common law concept of "matrimonial domicile" appears to have been
incorporated, as a result of our jurisprudential experiences after the drafting of the Civil Code of
1950, into the New Family Code. To underscore the difference between the intentions of the Civil
Code and the Family Code drafters, the term residence has been supplanted by the term
domicile in an entirely new provision (Art. 69) distinctly different in meaning and spirit from that
found in Article 110. The provision recognizes revolutionary changes in the concept of women's
rights in the intervening years by making the choice of domicile a product of mutual agreement
between the spouses.  46

Without as much belaboring the point, the term residence may mean one thing in civil law (or
under the Civil Code) and quite another thing in political law. What stands clear is that insofar as
the Civil Code is concerned-affecting the rights and obligations of husband and wife — the term
residence should only be interpreted to mean "actual residence." The inescapable conclusion
derived from this unambiguous civil law delineation therefore, is that when petitioner married the
former President in 1954, she kept her domicile of origin and merely gained a new home, not
a domicilium necessarium.

Even assuming for the sake of argument that petitioner gained a new "domicile" after her
marriage and only acquired a right to choose a new one after her husband died, petitioner's acts
following her return to the country clearly indicate that she not only impliedly but expressly chose
her domicile of origin (assuming this was lost by operation of law) as her domicile. This "choice"
was unequivocally expressed in her letters to the Chairman of the PCGG when petitioner sought
the PCGG's permission to "rehabilitate (our) ancestral house in Tacloban and Farm in Olot,
Leyte. . . to make them livable for the Marcos family to have a home in our
homeland."   Furthermore, petitioner obtained her residence certificate in 1992 in Tacloban,
47

Leyte, while living in her brother's house, an act which supports the domiciliary intention clearly
manifested in her letters to the PCGG Chairman. She could not have gone straight to her home
in San Juan, as it was in a state of disrepair, having been previously looted by vandals. Her
"homes" and "residences" following her arrival in various parts of Metro Manila merely qualified
as temporary or "actual residences," not domicile. Moreover, and proceeding from our discussion
pointing out specific situations where the female spouse either reverts to her domicile of origin or
chooses a new one during the subsistence of the marriage, it would be highly illogical for us to
assume that she cannot regain her original domicile upon the death of her husband absent a
positive act of selecting a new one where situations exist within the subsistence of the marriage
itself where the wife gains a domicile different from her husband.
In the light of all the principles relating to residence and domicile enunciated by this court up to
this point, we are persuaded that the facts established by the parties weigh heavily in favor of a
conclusion supporting petitioner's claim of legal residence or domicile in the First District of
Leyte.

II. The jurisdictional issue

Petitioner alleges that the jurisdiction of the COMELEC had already lapsed considering that the
assailed resolutions were rendered on April 24, 1995, fourteen (14) days before the election in
violation of Section 78 of the Omnibus Election Code.   Moreover, petitioner contends that it is
48

the House of Representatives Electoral Tribunal and not the COMELEC which has jurisdiction
over the election of members of the House of Representatives in accordance with Article VI Sec.
17 of the Constitution. This is untenable.

It is a settled doctrine that a statute requiring rendition of judgment within a specified time is
generally construed to be merely directory,   "so that non-compliance with them does not
49

invalidate the judgment on the theory that if the statute had intended such result it would have
clearly indicated it."   The difference between a mandatory and a directory provision is often
50

made on grounds of necessity. Adopting the same view held by several American authorities,
this court in Marcelino vs. Cruz held that: 51

The difference between a mandatory and directory provision is often determined

on grounds of expediency, the reason being that less injury results to the general
public by disregarding than enforcing the letter of the law.

In Trapp v. Mc Cormick, a case calling for the interpretation of a statute

containing a limitation of thirty (30) days within which a decree may be entered
without the consent of counsel, it was held that "the statutory provisions which
may be thus departed from with impunity, without affecting the validity of statutory
proceedings, are usually those which relate to the mode or time of doing that
which is essential to effect the aim and purpose of the Legislature or some
incident of the essential act." Thus, in said case, the statute under examination
was construed merely to be directory.

The mischief in petitioner's contending that the COMELEC should have abstained from rendering
a decision after the period stated in the Omnibus Election Code because it lacked jurisdiction,
lies in the fact that our courts and other quasi-judicial bodies would then refuse to render
judgments merely on the ground of having failed to reach a decision within a given or prescribed
period.

In any event, with the enactment of Sections 6 and 7 of R.A. 6646 in relation to Section 78 of
B.P. 881,   it is evident that the respondent Commission does not lose jurisdiction to hear and
52

decide a pending disqualification case under Section 78 of B.P. 881 even after the elections.

As to the House of Representatives Electoral Tribunal's supposed assumption of jurisdiction over

the issue of petitioner's qualifications after the May 8, 1995 elections, suffice it to say that
HRET's jurisdiction as the sole judge of all contests relating to the elections, returns and
qualifications of members of Congress begins only after a candidate has become a member of
the House of Representatives.   Petitioner not being a member of the House of Representatives,
53

it is obvious that the HRET at this point has no jurisdiction over the question.

It would be an abdication of many of the ideals enshrined in the 1987 Constitution for us to either
to ignore or deliberately make distinctions in law solely on the basis of the personality of a
petitioner in a case. Obviously a distinction was made on such a ground here. Surely, many
established principles of law, even of election laws were flouted for the sake perpetuating power
during the pre-EDSA regime. We renege on these sacred ideals, including the meaning and spirit
of EDSA ourselves bending established principles of principles of law to deny an individual what
he or she justly deserves in law. Moreover, in doing so, we condemn ourselves to repeat the
mistakes of the past.

WHEREFORE, having determined that petitioner possesses the necessary residence

qualifications to run for a seat in the House of Representatives in the First District of Leyte, the
COMELEC's questioned Resolutions dated April 24, May 7, May 11, and May 25, 1995 are
hereby SET ASIDE. Respondent COMELEC is hereby directed to order the Provincial Board of
Canvassers to proclaim petitioner as the duly elected Representative of the First District of Leyte.

SO ORDERED.

ROMERO, J., separate opinion:

Petitioner has appealed to this Court for relief after the COMELEC ruled that she was disqualified
from running for Representative of her District and that, in the event that she should,
nevertheless, muster a majority vote, her proclamation should be suspended. Not by a
straightforward ruling did the COMELEC pronounce its decision as has been its unvarying
practice in the past, but by a startling succession of "reverse somersaults." Indicative of its
shifting stance vis-a-vis petitioner's certificate of candidacy were first, the action of its Second
Division disqualifying her and canceling her original Certificate of Candidacy by a vote of 2-1 on
April 24, 1995; then the denial by the COMELEC en banc of her Motion for Reconsideration on
May 7, 1995, a day before the election; then because she persisted in running, its decision on
May 11, 1995 or three days after the election, allowing her proclamation in the event that the
results of the canvass should show that she obtained the highest number of votes (obviously
noting that petitioner had won overwhelmingly over her opponent), but almost simultaneously
reversing itself by directing that even if she wins, her proclamation should nonetheless be
suspended.

Crucial to the resolution of the disqualification issue presented by the case at bench is the
interpretation to be given to the one-year residency requirement imposed by the Constitution on
aspirants for a Congressional seat. 1

Bearing in mind that the term "resident" has been held to be synonymous with "domicile" for
election purposes, it is important to determine whether petitioner's domicile was in the First
District of Leyte and if so, whether she had resided there for at least a period of one year.
Undisputed is her domicile of origin, Tacloban, where her parents lived at the time of her birth.
Depending on what theory one adopts, the same may have been changed when she married
Ferdinand E. Marcos, then domiciled in Batac, by operation of law. Assuming it did, his death
certainly released her from the obligation to live with him at the residence fixed by him during his
lifetime. What may confuse the layman at this point is the fact that the term "domicile" may refer
to "domicile of origin," "domicile of choice," or "domicile by operation of law," which subject we
shall not belabor since it has been amply discussed by the ponente and in the other separate
opinions.

In any case, what assumes relevance is the divergence of legal opinion as to the effect of the
husband's death on the domicile of the widow. Some scholars opine that the widow's domicile
remains unchanged; that the deceased husband's wishes perforce still bind the wife he has left
behind. Given this interpretation, the widow cannot possibly go far enough to sever the
domiciliary tie imposed by her husband.

It is bad enough to interpret the law as empowering the husband unilaterally to fix the residence
or domicile of the family, as laid down in the Civil Code,  but to continue giving obeisance to his
2

wishes even after the rationale underlying the mutual duty of the spouses to live together has
ceased, is to close one's eyes to the stark realities of the present.
At the other extreme is the position that the widow automatically reverts to her domicile of origin
upon the demise of her husband. Does the law so abhor a vacuum that the widow has to be
endowed somehow with a domicile? To answer this question which is far from rhetorical, one will
have to keep in mind the basic principles of domicile. Everyone must have a domicile. Then one
must have only a single domicile for the same purpose at any given time. Once established, a
domicile remains until a new one is acquired, for no person lives who has no domicile, as defined
by the law be is subject to.

At this juncture, we are confronted with an unexplored legal terrain in this jurisdiction, rendered
more murky by the conflicting opinions of foreign legal authorities. This being the state of things,
it is imperative as it is opportune to illumine the darkness with the beacon light of truth, as
dictated by experience and the necessity of according petitioner her right to choose her domicile
in keeping with the enlightened global trend to recognize and protect the human rights of women,
no less than men.

Admittedly, the notion of placing women at par with men, insofar as civil, political and social
rights are concerned, is a relatively recent phenomenon that took seed only in the middle of this
century. It is a historical fact that for over three centuries, the Philippines had been colonized by
Spain, a conservative, Catholic country which transplanted to our shores the Old World cultures,
mores and attitudes and values. Through the imposition on our government of the Spanish Civil
Code in 1889, the people, both men and women, had no choice but to accept such concepts as
the husband's being the head of the family and the wife's subordination to his authority. In such
role, his was the right to make vital decisions for the family. Many instances come to mind,
foremost being what is related to the issue before us, namely, that "the husband shall fix the
residence of the family."   Because he is made responsible for the support of the wife and the
3

rest of the family,   he is also empowered to be the administrator of the conjugal property, with a
4

few exceptions   and may, therefore, dispose of the conjugal partnership property for the
5

purposes specified under the law;  whereas, as a general rule, the wife cannot bind the
6

conjugal partnership without the husband's consent.  As regards the property pertaining
7

to the children under parental authority, the father is the legal administrator and only in
his absence may the mother assume his powers.  Demeaning to the wife's dignity are
8

certain strictures on her personal freedoms, practically relegating her to the position of
minors and disabled persons. To illustrate a few: The wife cannot, without the husband's
consent, acquire any gratuitous title, except from her ascendants, descendants, parents-
in-law, and collateral relatives within the fourth degree.  With respect to her employment,
9

the husband wields a veto power in the case the wife exercises her profession or
occupation or engages in business, provided his income is sufficient for the family,
according to its social standing and his opposition is founded on serious and valid
grounds.   Most offensive, if not repulsive, to the liberal-minded is the effective
10

prohibition upon a widow to get married till after three hundred days following the death
of her husband, unless in the meantime, she has given birth to a child.   The mother who
11

contracts a subsequent marriage loses the parental authority over her children, unless the
deceased husband, father of the latter, has expressly provided in his will that his widow
might marry again, and has ordered that in such case she should keep and exercise
parental authority over their children.   Again, an instance of a husband's overarching
12

influence from beyond the grave.

All these indignities and disabilities suffered by Filipino wives for hundreds of years
evoked no protest from them until the concept of human rights and equality between and
among nations and individuals found hospitable lodgment in the United Nations Charter
of which the Philippines was one of the original signatories. By then, the Spanish
"conquistadores" had been overthrown by the American forces at the turn of the century.
The bedrock of the U.N. Charter was firmly anchored on this credo: "to reaffirm faith in the
fundamental human rights, in the dignity and worth of the human person, in the equal
rights of men and women." (Emphasis supplied)
 It took over thirty years before these egalitarian doctrines bore fruit, owing largely
to the burgeoning of the feminist movement. What may be regarded as the
international bill of rights for women was implanted in the Convention on the
Elimination of All Forms of Discrimination Against Women (CEDAW) adopted by
the U.N. General Assembly which entered into force as an international treaty on
September 3, 1981. In ratifying the instrument, the Philippines bound itself to
implement its liberating spirit and letter, for its Constitution, no less, declared that
"The Philippines. . . adopts the generally accepted principles of international law
as part of the law of the land and adheres to the policy of peace, equality, justice,
freedom, cooperation, and amity with all nations."   One such principle embodied
13

in the CEDAW is granting to men and women "the same rights with regard to the
law relating to the movement of persons and the freedom to choose their
residence and domicile."   (Emphasis supplied).
14

CEDAW's pro-women orientation which was not lost on Filipino women was reflected in
the 1987 Constitution of the Philippines and later, in the Family Code,   both of which
15

were speedily approved by the first lady President of the country, Corazon C. Aquino.
Notable for its emphasis on the human rights of all individuals and its bias for equality
between the sexes are the following provisions: "The State values the dignity of every
human person and guarantees full respect for human rights"  and "The State recognizes
16

the role of women in nation-building, and shall ensure the fundamental equality before the
law of women and men." 17

A major accomplishment of women in their quest for equality with men and the elimination of
discriminatory provisions of law was the deletion in the Family Code of almost all of the
unreasonable strictures on wives and the grant to them of personal rights equal to that of their
husbands. Specifically, the husband and wife are now given the right jointly to fix the family
domicile;  concomitant to the spouses' being jointly responsible for the support of the family is
18

the right and duty of both spouses to manage the household;  the administration and the
19

enjoyment of the community property shall belong to both spouses jointly;  the father and mother
20

shall now jointly exercise legal guardianship over the property of their unemancipated common
child  and several others.
21

Aware of the hiatus and continuing gaps in the law, insofar as women's rights are concerned,
Congress passed a law popularly known as "Women in Development and Nation Building
Act"  Among the rights given to married women evidencing their capacity to act in contracts
22

equal to that of men are:

(1) Women shall have the capacity to borrow and obtain loans and execute security and credit
arrangements under the same conditions as men;

(2) Women shall have equal access to all government and private sector programs granting
agricultural credit, loans and non material resources and shall enjoy equal treatment in agrarian
reform and land resettlement programs;

(3) Women shall have equal rights to act as incorporators and enter into insurance contracts; and

(4) Married women shall have rights equal to those of married men in applying for passports,
secure visas and other travel documents, without need to secure the consent of their spouses.

As the world draws the curtain on the Fourth World Conference of Women in Beijing, let this
Court now be the first to respond to its clarion call that "Women's Rights are Human Rights" and
that "All obstacles to women's full participation in decision-making at all levels, including the
family" should be removed. Having been herself a Member of the Philippine Delegation to the
International Women's Year Conference in Mexico in 1975, this writer is only too keenly aware of
the unremitting struggle being waged by women the world over, Filipino women not excluded, to
 be accepted as equals of men and to tear down the walls of discrimination that hold them back
from their proper places under the sun.

In light of the inexorable sweep of events, local and global, legislative, executive and judicial,
according more rights to women hitherto denied them and eliminating whatever pockets of
discrimination still exist in their civil, political and social life, can it still be insisted that widows are
not at liberty to choose their domicile upon the death of their husbands but must retain the same,
regardless?

I submit that a widow, like the petitioner and others similarly situated, can no longer be bound by
the domicile of the departed husband, if at all she was before. Neither does she automatically
revert to her domicile of origin, but exercising free will, she may opt to reestablish her domicile of
origin. In returning to Tacloban and subsequently, to Barangay Olot, Tolosa, both of which are
located in the First District of Leyte, petitioner amply demonstrated by overt acts, her election of a
domicile of choice, in this case, a reversion to her domicile of origin. Added together, the time
when she set up her domicile in the two places sufficed to meet the one-year requirement to run
as Representative of the First District of Leyte.

In view of the foregoing expatiation, I vote to GRANT the petition.

B. Live together
Arroyo vs Vasquez de Arroyo, GR No. 17014, 11 Aug 1921

EN BANC

G.R. No. L-17014             August 11, 1921

MARIANO B. ARROYO, plaintiff-appellant,
vs.
DOLORES C. VASQUEZ DE ARROYO, defendant-appellee.

Fisher & DeWitt for appellant.

Powell & Hill for appellee.

STREET, J.:

Mariano B. Arroyo and Dolores C. Vasquez de Arroyo were united in the bonds of wedlock by
marriage in the year 1910, and since that date, with a few short intervals of separation, they have
lived together as man and wife in the city of Iloilo until July 4, 1920, when the wife went away
from their common home with the intention of living thenceforth separate from her husband. After
efforts had been made by the husband without avail to induce her to resume marital relations,
this action was initiated by him to compel her to return to the matrimonial home and live with him
as a dutiful wife. The defendant answered, admitting the fact of marriage, and that she had left
her husband's home without his consent; but she averred by way of defense and cross-complaint
that she had been compelled to leave by cruel treatment on the part of her husband. Accordingly
she in turn prayed for affirmative relief, to consist of (1) a decree of separation; (2) a liquidation of
the conjugal partnership; (3) and an allowance for counsel fees and permanent separate
maintenance. Upon hearing the cause the lower court gave judgment in favor of the defendant,
authorizing her to live apart from her husband, granting her alimony at the rate of P400 per
month, and directing that the plaintiff should pay to the defendant's attorney the sum of P1,000
for his services to defendant in the trial of the case. The plaintiff thereupon removed the case
with the usual formalities by appeal to this court.
The trial judge, upon consideration of the evidence before him, reached the conclusion that the
husband was more to blame than his wife and that his continued ill-treatment of her furnished
sufficient justification for her abandonment of the conjugal home and the permanent breaking off
of marital relations with him. We have carefully examined and weighed every line of the proof,
and are of the opinion that the conclusion stated is wholly untenable. The evidence shows that
the wife is afflicted with a disposition of jealousy towards her husband in an aggravated degree;
and to his cause are chiefly traceable without a doubt the many miseries that have attended their
married life. In view of the decision which we are to pronounce nothing will be said in this opinion
which will make the resumption of married relations more difficult to them or serve as a reminder
to either of the mistakes of the past; and we prefer to record the fact that so far as the proof in
this record shows neither of the spouses has at any time been guilty of conjugal infidelity, or has
given just cause to the other to suspect illicit relations with any person. The tales of cruelty on the
part of the husband towards the wife, which are the basis of the cross-action, are in our opinion
no more than highly colored versions of personal wrangles in which the spouses have allowed
themselves from time to time to become involved and would have little significance apart from
the morbid condition exhibited by the wife. The judgment must therefore be recorded that the
abandonment by her of the marital home was without sufficient justification in fact.

In examining the legal questions involved, it will be found convenient to dispose first of the
defendant's cross-complaint. To begin with, the obligation which the law imposes on the husband
to maintain the wife is a duty universally recognized in civil society and is clearly expressed in
articles 142 and 143 of the Civil code. The enforcement of this obligation by the wife against the
husband is not conditioned upon the procurance of a divorce by her, nor even upon the
existence of a cause for divorce. Accordingly it had been determined that where the wife is
forced to leave the matrimonial abode and to live apart from her husband, she can, in this
jurisdiction, compel him to make provision for her separate maintenance (Goitia vs. Campos
Rueda, 35 Phil., 252); and he may be required to pay the expenses, including attorney's fees,
necessarily incurred in enforcing such obligation, (Mercado vs. Ostrand and Ruiz, 37 Phil., 179.)
Nevertheless, the interests of both parties as well as of society at large require that the courts
should move with caution in enforcing the duty to provide for the separate maintenance of the
wife, for this step involves a recognition of the de facto separation of the spouses — a state
which is abnormal and fraught with grave danger to all concerned. From this consideration it
follows that provision should not be made for separate maintenance in favor of the wife unless it
appears that the continued cohabitation of the pair has become impossible and separation
necessary from the fault of the husband.

In Davidson vs Davidson, the Supreme Court of Michigan, speaking through the eminent jurist,
Judge Thomas M. Cooley, held that an action for the support of the wife separate from the
husband will only be sustained when the reasons for it are imperative (47 Mich., 151). That
imperative necessity is the only ground on which such a proceeding can be maintained also
appears from the decision in Schindel vs. Schindel (12 Md., 294). In the State of South Carolina,
where judicial divorces have never been procurable on any ground, the Supreme court fully
recognizes the right of the wife to have provision for separate maintenance, where it is
impossible for her to continue safely to cohabit with her husband; but the same court has more
than once rejected the petition of the wife for separate maintenance where it appeared that the
husband's alleged cruelty or ill-treatment was provoked by the wife's own improper conduct.
(Rhame vs. Rhame, 1 McCord's Chan. [S. Car.], 197; 16 Am. Dec., 597; Boyd vs. Boyd, Har. Eq.
[S. Car.], 144.)

Upon one occasion Sir William Scott, pronouncing the judgment of the English Ecclesiastical
Court in a case where cruelty on the part of the husband was relied upon to secure a divorce for
the wife, made use of the following eloquent words, — which are perhaps even more applicable
in a proceeding for separate maintenance in a jurisdiction where, as here, a divorce cannot be
obtained except on the single ground of adultery and this, too, after the conviction of the guilty
spouse in a criminal prosecution for that crime. Said he:
 That the duty of cohabitation is released by the cruelty of one of the parties is admitted,
but the question occurs, What is cruelty? . . .

What merely wounds the mental feelings is in few cases to be admitted where they are
not accompanied with bodily injury, either actual or menaced. Mere austerity of temper,
petulance of manners, rudeness of language, a want of civil attention and
accommodation, even occasional sallies of passion, if they do not threaten bodily harm,
do not amount to legal cruelty: they are high moral offenses in the marriage-state
undoubtedly, not innocent surely in any state of life, but still they are not that cruelty
against which the law can relieve. Under such misconduct of either of the parties, for it
may exist on the one side as well as on the other, the suffering party must bear in some
degree the consequences of an injudicious connection; must subdue by decent
resistance or by prudent conciliation; and if this cannot be done, both must suffer in
silence. . . .

The humanity of the court has been loudly and repeatedly invoked. Humanity is the
second virtue of courts, but undoubtedly the first is justice. If it were a question of
humanity simply, and of humanity which confined its views merely to the happiness of the
present parties, it would be a question easily decided upon first impressions. Every body
must feel a wish to sever those who wish to live separate from each other, who cannot
live together with any degree of harmony, and consequently with any degree of
happiness; but my situation does not allow me to indulge the feelings, much less the first
feelings of an individual. The law has said that married persons shall not be legally
separated upon the mere disinclination of one or both to cohabit together. . . .

To vindicate the policy of the law is no necessary part of the office of a judge; but if it
were, it would not be difficult to show that the law in this respect has acted with its usual
wisdom and humanity with that true wisdom, and that real humanity, that regards the
general interests of mankind. For though in particular cases the repugnance of the law to
dissolve the obligations of matrimonial cohabitation may operate with great severity upon
individual, yet it must be carefully remembered that the general happiness of the married
life is secured by its indissolubility. When people understand that they must live together,
except for a very few reasons known to the law, they learn to soften by mutual
accommodation that yoke which they know cannot shake off; they become good
husbands and good wives form the necessity of remaining husbands and wives; for
necessity is a powerful master in teaching the duties which it imposes. . . . In this case,
as in many others, the happiness of some individuals must be sacrificed to the greater
and more general good. (Evans vs. Evans, 1 Hag. Con., 35; 161 Eng. Reprint, 466, 467.)

In the light of the considerations stated, it is obvious that the cross-complaint is not well founded
and none of the relief sought therein can be granted.

The same considerations that require the dismissal of the cross-complaint conclusively prove
that the plaintiff, Mariano B. Arroyo, has done nothing to forfeit his right to the marital society of
his wife and that she is under an obligation, both moral and legal, to return to the common home
and cohabit with him. The only question which here arises is as to the character and extent of the
relief which may be properly conceded to him by judicial decree.

The action is one by which the plaintiff seeks the restitution of conjugal rights; and it is supposed
in the petitory part of the complaint that he is entitled to a permanent mandatory injunction
requiring the defendant to return to the conjugal home and live with him as a wife according to
the precepts of law and morality. Of course if such a decree were entered, in unqualified terms,
the defendant would be liable to attachment for contempt, in case she should refuse to obey it;
and, so far as the present writer is aware, the question is raised for the first time in this
jurisdiction whether it is competent for the court to make such an order.
Upon examination of the authorities we are convinced that it is not within the province of the
courts of this country to attempt to compel one of the spouses to cohabit with, and render
conjugal rights to, the other. Of course where the property rights of one of the pair are invaled, an
action for restitution of such rights can be maintained. But we are disinclined to sanction the
doctrine that an order, enforcible by process of contempt, may be entered to compel the
restitution of the purely personal rights of consortium. At best such an order can be effective for
no other purpose than to compel the spouses to live under the same roof; and the experience of
these countries where the court of justice have assumed to compel the cohabitation of married
people shows that the policy of the practice is extremely questionable. Thus in England, formerly
the Ecclesiastical Court entertained suits for the restitution of conjugal rights at the instance of
either husband or wife; and if the facts were found to warrant it that court would make a
mandatory decree, enforcible by process of contempt in case of disobedience, requiring the
delinquent party to live with the other and render conjugal rights. Yet this practice was sometimes
criticized even by the judges who felt bound to enforce such orders, and in Weldon vs. Weldon (9
P. D., 52), decided in 1883, Sir James Hannen, President in the Probate, Divorce and Admiralty
Division of the High Court of Justice, expressed his regret that the English law on the subject was
not the same as that which prevailed in Scotland, where a decree of adherence, equivalent to the
decree for the restitution of conjugal rights in England, could be obtained by the injured spouse,
but could not be enforced by imprisonment. Accordingly, in obedience to the growing sentiment
against the practice, the Matrimonial Causes Act (1884) abolished the remedy of imprisonment;
though a decree for the restitution of conjugal rights can still be procured, and in case of
disobedience may serve in appropriate cases as the basis of an order for the periodical payment
of a stipend in the character of alimony.

In the voluminous jurisprudence of the United States, only one court, so far as we can discover,
has ever attempted to make a peremptory order requiring one of the spouses to live with the
other; and that was in a case where a wife was ordered to follow and live with her husband, who
had changed his domicile to the City of New Orleans. The decision referred to (Gahn vs. Darby,
36 La. Ann., 70) was based on a provision of the Civil Code of Louisiana similar to article 56 of
the Spanish Civil Code. It was decided many years ago, and the doctrine evidently has not been
fruitful even in the State of Louisiana. In other states of the American Union the idea of enforcing
cohabitation by process of contempt is rejected. (21 Cyc., 1148.)

In a decision of January 2, 1909, the supreme court of Spain appears to have affirmed an order
of the Audencia Territorial de Valladolid requiring a wife to return to the marital domicile, and in
the alternative, upon her failure to do so, to make a particular disposition of certain money and
effects then in her possession and to deliver to her husband, as administrator of the ganancial
property, all income, rents, and interest which might accrue to her from the property which she
had brought to the marriage. (113 Jur. Civ., pp. 1, 11.) but it does not appear that this order for
the return of the wife to the marital domicile was sanctioned by any other penalty than the
consequences that would be visited upon her in respect to the use and control of her property;
and it does not appear that her disobedience to that order would necessarily have been followed
by imprisonment for contempt.

We are therefore unable to hold that Mariano B. Arroyo in this case is entitled to the
unconditional and absolute order for the return of the wife to the marital domicile, which is sought
in the petitory part of the complaint; though he is, without doubt, entitled to a judicial declaration
that his wife has presented herself without sufficient cause and that it is her duty to return.

Therefore, reversing the judgment appealed from, in respect both to the original complaint and
the cross-bill, it is declared that Dolores Vasquez de Arroyo has absented herself from the
marital home without sufficient cause; and she is admonished that it is her duty to return. The
plaintiff is absolved from the cross-complaint, without special pronouncement as to costs of either
instance. So ordered.

Mapa, C.J., Johnson, Araullo, Avanceña and Villamor, JJ., concur.

Ilusorio v Builder, GR No. 139789, 12 May 2000

FIRST DIVISION

G.R. No. 139789. May 12, 2000

ERLINDA K. ILUSORIO, petitioner, vs. ERLINDA I. BILDNER and SYLVIA K. ILUSORIO, JOHN
DOE and JANE DOE, respondents. Mesm

G.R. No. 139808. May 12, 2000

POTENCIANO ILUSORIO, MA. ERLINDA I. BILDNER, and SYLVIA ILUSORIO, petitioners, vs.
COURT OF APPEALS and ERLINDA K. ILUSORIO, respondents.

DECISION

PARDO, J.:

May a wife secure a writ of habeas corpus to compel her husband to live with her in conjugal
bliss? The answer is no. Marital rights including coverture and living in conjugal dwelling may not
be enforced by the extra-ordinary writ of habeas corpus.

A writ of habeas corpus extends to all cases of illegal confinement or detention, or by which the
1 

rightful custody of a person is withheld from the one entitled thereto. Slx2 

"Habeas corpus is a writ directed to the person detaining another, commanding him to produce
the body of the prisoner at a designated time and place, with the day and cause of his capture
and detention, to do, submit to, and receive whatsoever the court or judge awarding the writ shall
consider in that behalf."
3

It is a high prerogative, common-law writ, of ancient origin, the great object of which is the
liberation of those who may be imprisoned without sufficient cause. It is issued when one is
4 

deprived of liberty or is wrongfully prevented from exercising legal custody over another person. 5

The petition of Erlinda K. Ilusorio is to reverse the decision of the Court of Appeals and its
6  7 

resolution dismissing the application for habeas corpus to have the custody of her husband,
8 

lawyer Potenciano Ilusorio and enforce consortium as the wife.

On the other hand, the petition of Potenciano Ilusorio is to annul that portion of the decision of
9 

the Court of Appeals giving Erlinda K. Ilusorio visitation rights to her husband and to enjoin
Erlinda and the Court of Appeals from enforcing the visitation rights.

The undisputed facts are as follows: Scslx

Erlinda Kalaw Ilusorio is the wife of lawyer Potenciano Ilusorio.

Potenciano Ilusorio is about 86 years of age possessed of extensive property valued at millions
of pesos. For many years, lawyer Potenciano Ilusorio was Chairman of the Board and President
of Baguio Country Club.

On July 11, 1942, Erlinda Kalaw and Potenciano Ilusorio contracted matrimony and lived
together for a period of thirty (30) years. In 1972, they separated from bed and board for
undisclosed reasons. Potenciano lived at Urdaneta Condominium, Ayala Ave., Makati City when
he was in Manila and at Ilusorio Penthouse, Baguio Country Club when he was in Baguio City.
On the other hand, Erlinda lived in Antipolo City.

Out of their marriage, the spouses had six (6) children, namely: Ramon Ilusorio (age 55); Erlinda
Ilusorio Bildner (age 52); Maximo (age 50); Sylvia (age 49); Marietta (age 48); and Shereen (age
39).

On December 30, 1997, upon Potenciano’s arrival from the United States, he stayed with Erlinda
for about five (5) months in Antipolo City. The children, Sylvia and Erlinda (Lin), alleged that
during this time, their mother gave Potenciano an overdose of 200 mg instead of 100 mg Zoloft,
an antidepressant drug prescribed by his doctor in New York, U.S.A. As a consequence,
Potenciano’s health deteriorated.

On February 25, 1998, Erlinda filed with the Regional Trial Court, Antipolo City a petition for
10 

guardianship over the person and property of Potenciano Ilusorio due to the latter’s advanced
age, frail health, poor eyesight and impaired judgment.

On May 31, 1998, after attending a corporate meeting in Baguio City, Potenciano Ilusorio did not
return to Antipolo City and instead lived at Cleveland Condominium, Makati. Slxsc

On March 11, 1999, Erlinda filed with the Court of Appeals a petition for habeas corpus to have
the custody of lawyer Potenciano Ilusorio. She alleged that respondents refused petitioner’s
11 

demands to see and visit her husband and prohibited Potenciano from returning to Antipolo City.

After due hearing, on April 5, 1999, the Court of Appeals rendered decision the dispositive
portion of which reads:

"WHEREFORE, in the light of the foregoing disquisitions, judgment is hereby rendered:

"(1) Ordering, for humanitarian consideration and upon petitioner’s manifestation, respondents
Erlinda K. Ilusorio Bildner and Sylvia Ilusorio-Yap, the administrator of Cleveland Condominium
or anywhere in its place, his guards and Potenciano Ilusorio’s staff especially Ms. Aurora
Montemayor to allow visitation rights to Potenciano Ilusorio’s wife, Erlinda Ilusorio and all her
children, notwithstanding any list limiting visitors thereof, under penalty of contempt in case of
violation of refusal thereof; xxx

"(2) ORDERING that the writ of habeas corpus previously issued be recalled and the herein
petition for habeas corpus be DENIED DUE COURSE, as it is hereby DISMISSED for lack of
unlawful restraint or detention of the subject of the petition.

"SO ORDERED." 12

Hence, the two petitions, which were consolidated and are herein jointly decided.

As heretofore stated, a writ of habeas corpus extends to all cases of illegal confinement or
detention, or by which the rightful custody of a person is withheld from the one entitled thereto. It
13 

is available where a person continues to be unlawfully denied of one or more of his constitutional
freedoms, where there is denial of due process, where the restraints are not merely involuntary
but are unnecessary, and where a deprivation of freedom originally valid has later become
arbitrary. It is devised as a speedy and effectual remedy to relieve persons from unlawful
14 

restraint, as the best and only sufficient defense of personal freedom. Jksmä â Ó
15 

The essential object and purpose of the writ of habeas corpus is to inquire into all manner of
involuntary restraint, and to relieve a person therefrom if such restraint is illegal.
16
To justify the grant of the petition, the restraint of liberty must be an illegal and involuntary
deprivation of freedom of action. The illegal restraint of liberty must be actual and effective, not
17 

merely nominal or moral. 18

The evidence shows that there was no actual and effective detention or deprivation of lawyer
Potenciano Ilusorio’s liberty that would justify the issuance of the writ. The fact that lawyer
Potenciano Ilusorio is about 86 years of age, or under medication does not necessarily render
him mentally incapacitated. Soundness of mind does not hinge on age or medical condition but
on the capacity of the individual to discern his actions.

After due hearing, the Court of Appeals concluded that there was no unlawful restraint on his
liberty.

The Court of Appeals also observed that lawyer Potenciano Ilusorio did not request the
administrator of the Cleveland Condominium not to allow his wife and other children from seeing
or visiting him. He made it clear that he did not object to seeing them.

As to lawyer Potenciano Ilusorio’s mental state, the Court of Appeals observed that he was of
sound and alert mind, having answered all the relevant questions to the satisfaction of the court.

Being of sound mind, he is thus possessed with the capacity to make choices. In this case, the
crucial choices revolve on his residence and the people he opts to see or live with. The choices
he made may not appeal to some of his family members but these are choices which exclusively
belong to Potenciano. He made it clear before the Court of Appeals that he was not prevented
from leaving his house or seeing people. With that declaration, and absent any true restraint on
his liberty, we have no reason to reverse the findings of the Court of Appeals.

With his full mental capacity coupled with the right of choice, Potenciano Ilusorio may not be the
subject of visitation rights against his free choice. Otherwise, we will deprive him of his right to
privacy. Needless to say, this will run against his fundamental constitutional right. Esä m

The Court of Appeals exceeded its authority when it awarded visitation rights in a petition for
habeas corpus where Erlinda never even prayed for such right. The ruling is not consistent with
the finding of subject’s sanity.

When the court ordered the grant of visitation rights, it also emphasized that the same shall be
enforced under penalty of contempt in case of violation or refusal to comply. Such assertion of
raw, naked power is unnecessary.

The Court of Appeals missed the fact that the case did not involve the right of a parent to visit a
minor child but the right of a wife to visit a husband. In case the husband refuses to see his wife
for private reasons, he is at liberty to do so without threat of any penalty attached to the exercise
of his right.

No court is empowered as a judicial authority to compel a husband to live with his wife. Coverture
cannot be enforced by compulsion of a writ of habeas corpus carried out by sheriffs or by any
other mesne process. That is a matter beyond judicial authority and is best left to the man and
woman’s free choice.

WHEREFORE, in G. R. No. 139789, the Court DISMISSES the petition for lack of merit. No
costs.

In G. R. No. 139808, the Court GRANTS the petition and nullifies the decision of the Court of
Appeals insofar as it gives visitation rights to respondent Erlinda K. Ilusorio. No costs.
SO ORDERED.
C. Support
De La Camara v Rueda, GR No. 11263, 2 Nov 1916

EN BANC

G.R. No. 11263             November 2, 1916

ELOISA GOITIA DE LA CAMARA, plaintiff-appellant,

vs.
JOSE CAMPOS RUEDA, defendant-appellee.

Eduardo Gutierrez Repide and Felix Socias for appellant.

Sanz, Opisso and Luzuriaga for appellee.

TRENT, J.:

This is an action by the wife against her husband for support outside of the conjugal domicile.
From a judgment sustaining the defendant's demurrer upon the ground that the facts alleged in
the complaint do not state a cause of action, followed by an order dismissing the case after the
plaintiff declined to amend, the latter appealed.

It was urged in the first instance, and the court so held, that the defendant cannot be compelled
to support the plaintiff, except in his own house, unless it be by virtue of a judicial decree granting
her a divorce or separation from the defendant.

The parties were legally married in the city of Manila on January 7, 1915, and immediately
thereafter established their residence at 115 Calle San Marcelino, where they lived together for
about a month, when the plaintiff returned to the home of her parents. The pertinent allegations
of the complaint are as follows:

That the defendant, one month after he had contracted marriage with the plaintiff,
demanded of her that she perform unchaste and lascivious acts on his genital organs;
that the plaintiff spurned the obscene demands of the defendant and refused to perform
any act other than legal and valid cohabitation; that the defendant, since that date had
continually on other successive dates, made similar lewd and indecorous demands on
his wife, the plaintiff, who always spurned them, which just refusals of the plaintiff
exasperated the defendant and induce him to maltreat her by word and deed and inflict
injuries upon her lips, her face and different parts of her body; and that, as the plaintiff
was unable by any means to induce the defendant to desist from his repugnant desires
and cease from maltreating her, she was obliged to leave the conjugal abode and take
refuge in the home of her parents.

Marriage in this jurisdiction is a contract entered into in the manner and with the solemnities
established by General Orders No. 68, in so far as its civil effects are concerned requiring the
consent of the parties. (Garcia vs. Montague, 12 Phil. Rep., 480, citing article 1261 of Civil
Code.) Upon the termination of the marriage ceremony, a conjugal partnership is formed
between the parties. (Sy Joc Lieng vs. Encarnacion, 16 Phil. Rep., 137.) To this extent a
marriage partakes of the nature of an ordinary contract. But it is something more than a mere
contract. It is a new relation, the rights, duties, and obligations of which rest not upon the
agreement of the parties but upon the general law which defines and prescribes those rights,
duties, and obligations .Marriage is an institution, in the maintenance of which in its purity the
public is deeply interested. It is a relation for life and the parties cannot terminate it at any shorter
period by virtue of any contract they may make .The reciprocal rights arising from this relation, so
long as it continues, are such as the law determines from time to time, and none other. When the
legal existence of the parties is merged into one by marriage, the new relation is regulated and
controlled by the state or government upon principles of public policy for the benefit of society as
well as the parties. And when the object of a marriage is defeated by rendering its continuance
intolerable to one of the parties and productive of no possible good to the community, relief in
some way should be obtainable. With these principles to guide us, we will inquire into the status
of the law touching and governing the question under consideration.

Articles 42 to 107 of the Civil Code are not in force in the Philippine Islands (Benedicto vs. De la
Rama, 3 Phil .Rep., 34). Articles 44 to 78 of the Law of Civil Marriage of 1870, in force in the
Peninsula, were extended to the Philippine Islands by royal decree on April 13, 1883 (Ebreo vs.
Sichon, 4 Phil. Rep., 705). Articles 44, 45, and 48 of this law read:

ART. 44. The spouses are obliged to be faithful to each other and to mutually assist each
other.

ART. 45. The husband must live with and protect his wife. (The second paragraph deals
with the management of the wife's property.)

ART. 48. The wife must obey her husband, live with him, and follow him when he
charges his domicile or residence.

Notwithstanding the provisions of the foregoing paragraph, the court may for just cause
relieve her from this duty when the husband removes his residence to a foreign country.

And articles 143 and 149 of the Civil Code are as follows:

ART. 143. The following are obliged to support each other reciprocally to the whole
extent specified in the preceding article.

1. The consorts.

xxx     xxx     xxx

ART. (149) 49. The person obliged to give support may, at his option, satisfy it, either by
paying the pension that may be fixed or by receiving and maintaining in his own home
the person having the right to the same.

Article 152 of the Civil Code gives the instances when the obligation to give support shall cease.
The failure of the wife to live with her husband is not one of them.

The above quoted provisions of the Law of Civil Marriage and the Civil Code fix the duties and
obligations of the spouses. The spouses must be faithful to, assist, and support each other. The
husband must live with and protect his wife. The wife must obey and live with her husband and
follow him when he changes his domicile or residence, except when he removes to a foreign
country. But the husband who is obliged to support his wife may, at his option, do so by paying
her a fixed pension or by receiving and maintaining her in his own home. May the husband, on
account of his conduct toward his wife, lose this option and be compelled to pay the pension? Is
the rule established by article 149 of the Civil Code absolute? The supreme court of Spain in its
decision of December 5, 1903, held:.

That in accordance with the ruling of the supreme court of Spain in its decisions dated
May 11, 1897, November 25, 1899, and July 5, 1901, the option which article 149 grants
the person, obliged to furnish subsistence, between paying the pension fixed or receiving
and keeping in his own house the party who is entitled to the same, is not so absolute as
to prevent cases being considered wherein, either because this right would be opposed
to the exercise of a preferential right or because of the existence of some justifiable
 cause morally opposed to the removal of the party enjoying the maintenance, the right of
selection must be understood as being thereby restricted.

Whereas the only question discussed in the case which gave rise to this appeal was
whether there was any reason to prevent the exercise of the option granted by article 149
of the Civil Code to the person obliged to furnish subsistence, to receive and maintain in
his own house the one who is entitled to receive it; and inasmuch as nothing has been
alleged or discussed with regard to the parental authority of Pedro Alcantara Calvo,
which he ha not exercised, and it having been set forth that the natural father simply
claims his child for the purpose of thus better attending to her maintenance, no action
having been taken by him toward providing the support until, owing to such negligence,
the mother was obliged to demand it; it is seen that these circumstances, together with
the fact of the marriage of Pedro Alcantara, and that it would be difficult for the mother to
maintain relations with her daughter, all constitute an impediment of such a nature as to
prevent the exercise of the option in the present case, without prejudice to such decision
as may be deemed proper with regard to the other questions previously cited in respect
to which no opinion should be expressed at this time.

The above was quoted with approval in United States and De Jesus vs. Alvir (9 Phil. Rep., 576),
wherein the court held that the rule laid down in article 149 of the Civil Code "is not absolute." but
it is insisted that there existed a preexisting or preferential right in each of these cases which was
opposed to the removal of the one entitled to support. It is true that in the first the person
claiming the option was the natural father of the child and had married a woman other than the
child's mother, and in the second the right to support had already been established by a final
judgment in a criminal case. Notwithstanding these facts the two cases clearly established the
proposition that the option given by article 149 of the Civil Code may not be exercised in any and
all cases.

Counsel for the defendant cite, in support of their contention, the decision of the supreme court of
Spain, dated November 3, 1905. In this case Don Berno Comas, as a result of certain business
reverses and in order no to prejudice his wife, conferred upon her powers to administer and
dispose of her property. When she left him he gave her all the muniments of title, mortgage
credits, notes, P10,000 in accounts receivable, and the key to the safe in which he kept a large
amount of jewels, thus depriving himself of all his possessions and being reduced in
consequence to want. Subsequently he instituted this civil action against his wife, who was then
living in opulence, for support and the revocation of the powers heretofore granted in reference
to the administration and disposal of her property. In her answer the wife claimed that the plaintiff
(her husband) was not legally in a situation to claim support and that the powers voluntarily
conferred and accepted by her were bilateral and could not be canceled by the plaintiff. From a
judgment in favor of the plaintiff the defendant wife appealed to the Audencia Territorial wherein,
after due trial, judgment was rendered in her favor dismissing the action upon the merits. The
plaintiff appealed to the supreme court and that high tribunal, in affirming the judgment of
the Audencia Territorial, said:

Considering that article 143, No. 1, of the Civil Code, providing that the spouses are
mutually obliged to provide each other with support, cannot but be subordinate to the
other provisions of said Code which regulates the family organization and the duties of
spouses not legally separated, among which duties are those of their living together and
mutually helping each other, as provided in article 56 of the aforementioned code; and
taking this for granted, the obligation of the spouse who has property to furnish support to
the one who has no property and is in need of it for subsistence, is to be understood as
limited to the case where, in accordance with law, their separation has been decreed,
either temporarily or finally and this case, with respect to the husband, cannot occur until
a judgment of divorce is rendered, since, until then, if he is culpable, he is not deprived of
the management of his wife's property and of the product of the other property belonging
to the conjugal partnership; and
 Considering that, should the doctrine maintained in the appeal prevail, it would allow
married persons to disregard the marriage bond and separate from each other of their
own free will, thus establishing, contrary to the legal provision contained in said article 56
of the Civil Code, a legal status entirely incompatible with the nature and effects of
marriage in disregard of the duties inherent therein and disturbing the unity of the family,
in opposition to what the law, in conformity with good morals, has established; and.

Considering that, as the spouses D. Ramon Benso and Doña Adela Galindo are not
legally separated, it is their duty to live together and afford each other help and support;
and for this reason, it cannot be held that the former has need of support from his wife so
that he may live apart from her without the conjugal abode where it is his place to be, nor
of her conferring power upon him to dispose even of the fruits of her property in order
therewith to pay the matrimonial expenses and, consequently, those of his own support
without need of going to his wife; wherefore the judgment appealed from, denying the
petition of D. Ramon Benso for support, has not violated the articles of the Civil Code and
the doctrine invoked in the assignments of error 1 and 5 of the appeal.

From a careful reading of the case just cited and quoted from it appears quite clearly that the
spouses separated voluntarily in accordance with an agreement previously made. At least there
are strong indications to this effect, for the court says, "should the doctrine maintained in the
appeal prevail, it would allow married persons to disregard the marriage bond and separate from
each other of their own free will." If this be the true basis upon which the supreme court of Spain
rested its decision, then the doctrine therein enunciated would not be controlling in cases where
one of the spouses was compelled to leave the conjugal abode by the other or where the
husband voluntarily abandons such abode and the wife seeks to force him to furnish support.
That this is true appears from the decision of the same high tribunal, dated October 16, 1903. In
this case the wife brought an action for support against her husband who had willfully and
voluntarily abandoned the conjugal abode without any cause whatever. The supreme court,
reversing the judgment absolving the defendant upon the ground that no action for divorce, etc.,
had been instituted, said:

In the case at bar, it has been proven that it was Don Teodoro Exposito who left the
conjugal abode, although he claims, without however proving his contention, that the
person responsible for this situation was his wife, as she turned him out of the house.
From this state of affairs it results that it is the wife who is party abandoned, the husband
not having prosecuted any action to keep her in his company and he therefore finds
himself, as long as he consents to the situation, under the ineluctable obligation to
support his wife in fulfillment of the natural duty sanctioned in article 56 of the Code in
relation with paragraph 1 of article 143. In not so holding, the trial court, on the mistaken
ground that for the fulfillment of this duty the situation or relation of the spouses should
be regulated in the manner it indicates, has made the errors of law assigned in the first
three grounds alleged, because the nature of the duty of affording mutual support is
compatible and enforcible in all situations, so long as the needy spouse does not create
any illicit situation of the court above described.
lawphil.net

If we are in error as to the doctrine enunciated by the supreme court of Spain in its decision of
November 3, 1905, and if the court did hold, as contended by counsel for the defendant in the
case under consideration, that neither spouse can be compelled to support the other outside of
the conjugal abode, unless it be by virtue of a final judgment granting the injured one a divorce or
separation from the other, still such doctrine or holding would not necessarily control in this
jurisdiction for the reason that the substantive law is not in every particular the same here as it is
in Spain. As we have already stated, articles 42 to 107 of the Civil Code in force in the Peninsula
are not in force in the Philippine Islands. The law governing the duties and obligations of
husband and wife in this country are articles 44 to 78 of the Law of Civil Marriage of 1870 .In
Spain the complaining spouse has, under article 105 of the Civil Code, various causes for
divorce, such as adultery on the part of the wife in every case and on the part of the husband
when public scandal or disgrace of the wife results therefrom; personal violence actually inflicted
 or grave insults: violence exercised by the husband toward the wife in order to force her to
change her religion; the proposal of the husband to prostitute his wife; the attempts of the
husband or wife to corrupt their sons or to prostitute their daughters; the connivance in their
corruption or prostitution; and the condemnation of a spouse to perpetual chains or hard labor,
while in this jurisdiction the only ground for a divorce is adultery. (Benedicto vs. De la Rama, 3
Phil .Rep., 34, 45.) This positive and absolute doctrine was announced by this court in the case
just cited after an exhaustive examination of the entire subject. Although the case was appealed
to the Supreme Court of the United States and the judgment rendered by this court was there
reversed, the reversal did not affect in any way or weaken the doctrine in reference to adultery
being the only ground for a divorce. And since the decision was promulgated by this court in that
case in December, 1903, no change or modification of the rule has been announced. It is,
therefore, the well settled and accepted doctrine in this jurisdiction.

But it is argued that to grant support in an independent suit is equivalent to granting divorce or
separation, as it necessitates a determination of the question whether the wife has a good and
sufficient cause for living separate from her husband; and, consequently, if a court lacks power to
decree a divorce, as in the instant case, power to grant a separate maintenance must also be
lacking. The weakness of this argument lies in the assumption that the power to grant support in
a separate action is dependent upon a power to grant a divorce. That the one is not dependent
upon the other is apparent from the very nature of the marital obligations of the spouses. The
mere act of marriage creates an obligation on the part of the husband to support his wife. This
obligation is founded not so much on the express or implied terms of the contract of marriage as
on the natural and legal duty of the husband; an obligation, the enforcement of which is of such
vital concern to the state itself that the laws will not permit him to terminate it by his own wrongful
acts in driving his wife to seek protection in the parental home. A judgment for separate
maintenance is not due and payable either as damages or as a penalty; nor is it a debt in the
strict legal sense of the term, but rather a judgment calling for the performance of a duty made
specific by the mandate of the sovereign. This is done from necessity and with a view to preserve
the public peace and the purity of the wife; as where the husband makes so base demands upon
his wife and indulges in the habit of assaulting her. The pro tanto separation resulting from a
decree for separate support is not an impeachment of that public policy by which marriage is
regarded as so sacred and inviolable in its nature; it is merely a stronger policy overruling a
weaker one; and except in so far only as such separation is tolerated as a means of preserving
the public peace and morals may be considered, it does not in any respect whatever impair the
marriage contract or for any purpose place the wife in the situation of a feme sole.

The foregoing are the grounds upon which our short opinion and order for judgment, heretofore
filed in this case, rest.

D. Privacy
Zulueta vs CA, GR. No. 107328, 20 Feb 1996

SECOND DIVISION

G.R. No. 107383             February 20, 1996

CECILIA ZULUETA, petitioner,
vs.
COURT OF APPEALS and ALFREDO MARTIN, respondents.

DECISION

MENDOZA, J.:
This is a petition to review the decision of the Court of Appeals, affirming the decision of the
Regional Trial Court of Manila (Branch X) which ordered petitioner to return documents and
papers taken by her from private respondent's clinic without the latter's knowledge and consent.

The facts are as follows:

Petitioner Cecilia Zulueta is the wife of private respondent Alfredo Martin. On March 26, 1982,
petitioner entered the clinic of her husband, a doctor of medicine, and in the presence of her
mother, a driver and private respondent's secretary, forcibly opened the drawers and cabinet in
her husband's clinic and took 157 documents consisting of private correspondence between Dr.
Martin and his alleged paramours, greetings cards, cancelled checks, diaries, Dr. Martin's
passport, and photographs. The documents and papers were seized for use in evidence in a
case for legal separation and for disqualification from the practice of medicine which petitioner
had filed against her husband.

Dr. Martin brought this action below for recovery of the documents and papers and for damages
against petitioner. The case was filed with the Regional Trial Court of Manila, Branch X, which,
after trial, rendered judgment for private respondent, Dr. Alfredo Martin, declaring him "the
capital/exclusive owner of the properties described in paragraph 3 of plaintiff's Complaint or
those further described in the Motion to Return and Suppress" and ordering Cecilia Zulueta and
any person acting in her behalf to a immediately return the properties to Dr. Martin and to pay
him P5,000.00, as nominal damages; P5,000.00, as moral damages and attorney's fees; and to
pay the costs of the suit. The writ of preliminary injunction earlier issued was made final and
petitioner Cecilia Zulueta and her attorneys and representatives were enjoined from "using or
submitting/admitting as evidence" the documents and papers in question. On appeal, the Court
of Appeals affirmed the decision of the Regional Trial Court. Hence this petition.

There is no question that the documents and papers in question belong to private respondent,
Dr. Alfredo Martin, and that they were taken by his wife, the herein petitioner, without his
knowledge and consent. For that reason, the trial court declared the documents and papers to be
properties of private respondent, ordered petitioner to return them to private respondent and
enjoined her from using them in evidence. In appealing from the decision of the Court of Appeals
affirming the trial court's decision, petitioner's only ground is that in Alfredo Martin v. Alfonso
Felix, Jr., this Court ruled that the documents and papers (marked as Annexes A-1 to J-7 of
1 

respondent's comment in that case) were admissible in evidence and, therefore, their use by
petitioner's attorney, Alfonso Felix did not constitute malpractice or gross misconduct, For this
reason it is contended that the Court of Appeals erred in affirming the decision of the trial court
instead of dismissing private respondent's complaint.

Petitioner's contention has no merit. The case against Atty. Felix, Jr. was for disbarment. Among
other things, private respondent, Dr. Alfredo Martin, as complainant in that case, charged that in
using the documents in evidence, Atty. Felix, Jr. committed malpractice or gross misconduct
because of the injunctive order of the trial court. In dismissing the complaint against Atty. Felix,
Jr., this Court took note of the following defense of Atty. Felix; Jr. which it found to be "impressed
with merit:"2

On the alleged malpractice or gross misconduct of respondent [Alfonso Felix, Jr.], he

maintains that:

....

4. When respondent refiled Cecilia's case for legal separation before the Pasig Regional
Trial Court, there was admittedly an order of the Manila Regional Trial Court prohibiting
Cecilia from using the documents Annex "A-1 to J-7." On September 6, 1983, however
 having appealed the said order to this Court on a petition for certiorari, this Court issued
a restraining order on aforesaid date which order temporarily set aside the order of the
trial court. Hence, during the enforceability of this Court's order, respondent's request for
petitioner to admit the genuineness and authenticity of the subject annexes cannot be
looked upon as malpractice. Notably, petitioner Dr. Martin finally admitted the truth and
authenticity of the questioned annexes, At that point in time, would it have been
malpractice for respondent to use petitioner's admission as evidence against him in the
legal separation case pending in the Regional Trial Court of Makati? Respondent submits
it is not malpractice.

Significantly, petitioner's admission was done not thru his counsel but by Dr. Martin
himself under oath, Such verified admission constitutes an affidavit, and, therefore,
receivable in evidence against him. Petitioner became bound by his admission. For
Cecilia to avail herself of her husband's admission and use the same in her action for
legal separation cannot be treated as malpractice.

Thus, the acquittal of Atty. Felix, Jr. in the administrative case amounts to no more than a
declaration that his use of the documents and papers for the purpose of securing Dr. Martin's
admission as to their genuiness and authenticity did not constitute a violation of the injunctive
order of the trial court. By no means does the decision in that case establish the admissibility of
the documents and papers in question.

It cannot be overemphasized that if Atty. Felix, Jr. was acquitted of the charge of violating the writ
of preliminary injunction issued by the trial court, it was only because, at the time he used the
documents and papers, enforcement of the order of the trial court was temporarily restrained by
this Court. The TRO issued by this Court was eventually lifted as the petition for certiorari filed by
petitioner against the trial court's order was dismissed and, therefore, the prohibition against the
further use of the documents and papers became effective again.

Indeed the documents and papers in question are inadmissible in evidence. The constitutional
injunction declaring "the privacy of communication and correspondence [to be] inviolable" is no3 

less applicable simply because it is the wife (who thinks herself aggrieved by her husband's
infidelity) who is the party against whom the constitutional provision is to be enforced. The only
exception to the prohibition in the Constitution is if there is a "lawful order [from a] court or when
public safety or order requires otherwise, as prescribed by law." Any violation of this provision
4 

renders the evidence obtained inadmissible "for any purpose in any proceeding."  5

The intimacies between husband and wife do not justify any one of them in breaking the drawers
and cabinets of the other and in ransacking them for any telltale evidence of marital infidelity. A
person, by contracting marriage, does not shed his/her integrity or his right to privacy as an
individual and the constitutional protection is ever available to him or to her.

The law insures absolute freedom of communication between the spouses by making it
privileged. Neither husband nor wife may testify for or against the other without the consent of
the affected spouse while the marriage subsists. Neither may be examined without the consent
6 

of the other as to any communication received in confidence by one from the other during the
marriage, save for specified exceptions. But one thing is freedom of communication; quite
7 

another is a compulsion for each one to share what one knows with the other. And this has
nothing to do with the duty of fidelity that each owes to the other.

WHEREFORE, the petition for review is DENIED for lack of merit.

SO ORDERED.
V. Property Relations between Husband and Wife
A. General
B. Donations Propter Nuptias
Arcaba vs Batocael, GR No. 146683, 22 Nov 2001

SECOND DIVISION

G.R. No. 146683      November 22, 2001

CIRILA ARCABA, petitioner,
vs.
ERLINDA TABANCURA VDA. DE BATOCAEL, SEIGFREDO C. TABANCURA, DORIS C.
TABANCURA, LUZELLI C. TABANCURA, BELEN C. TABANCURA, RAUL A. COMILLE,
BERNADETTE A. COMILLE, and ABNER A. COMILLE, respondents.

MENDOZA, J.:

Petitioner Cirila Arcaba seeks review on certiorari of the decision 1 of the Court of Appeals, which
affirmed with modification the decision2 of the Regional Trial Court, Branch 10, Dipolog City,
Zamboanga del Norte in Civil Case No. 4593, declaring as void a deed of donation inter
vivos executed by the late Francisco T. Comille in her favor and its subsequent
resolution3 denying reconsideration.

The facts are as follows:

On January 16, 1956, Francisco Comille and his wife Zosima Montallana became the registered
owners of Lot No. 437-A located at the corner of Calle Santa Rosa (now Balintawak Street) and
Calle Rosario (now Rizal Avenue) in Dipolog City, Zamboanga del Norte. The total area of the lot
was 418 square meters.4 After the death of Zosima on October 3, 1980, Francisco and his
mother-in-law, Juliana Bustalino Montallana, executed a deed of extrajudicial partition with
waiver of rights, in which the latter waived her share consisting of one-fourth (1/4) of the property
to Francisco.5 On June 27, 1916, Francisco registered the lot in his name with the Registry of
Deeds.6

Having no children to take care of him after his retirement, Francisco asked his niece Leticia
Bellosillo,7 the latter's cousin, Luzviminda Paghacian,8 and petitioner Cirila Arcaba, then a widow,
to take care of his house, as well as the store inside. 9

Conflicting testimonies were offered as to the nature of the relationship between Cirila and
Francisco. Leticia Bellosillo said Francisco and Cirila were lovers since they slept in the same
room,10 while Erlinda Tabancura,11 another niece of Francisco, claimed that the latter had told her
that Cirila was his mistress.12 On the other hand, Cirila said she was a mere helper who could
enter the master's bedroom only when the old man asked her to and that Francisco in any case
was too old for her. She denied they ever had sexual intercourse. 13

It appears that when Leticia and Luzviminda were married, only Cirila was left to take care of
Francisco.14 Cirila testified that she was a 34-year old widow while Francisco was a 75-year old
widower when she began working for the latter; that he could still walk with her assistance at that
time;15 and that his health eventually deteriorated and he became bedridden. 16 Erlinda Tabancura
testified that Francisco's sole source of income consisted of rentals from his lot near the public
streets.17 He did not pay Cirila a regular cash wage as a househelper , though he provided her
family with food and lodging.18

On January 24, 1991, a few months before his death, Francisco executed an instrument
denominated "Deed of Donation Inter Vivos," in which he ceded a portion of Lot 437-A,
consisting of 150 square meters, together with his house, to Cirila, who accepted the donation in
the same instrument. Francisco left the larger portion of 268 square meters in his name. The
deed stated that the donation was being made in consideration of "the faithful services [Cirila
Arcaba] had rendered over the past ten (10) years." The deed was notarized by Atty. Vic T.
Lacaya, Sr.19 and later registered by Cirila as its absolute owner .20

On October 4, 1991, Francisco died without any children. In 1993, the lot which Cirila received
from Francisco had a market value of P57,105.00 and an assessed value of P28,550.00. 21

On February 18, 1993, respondents filed a complaint against petitioner 'for declaration of nullity
of a deed of donation inter vivos, recovery of possession, and damages. Respondents, who are
the decedent's nephews and nieces and his heirs by intestate succession, alleged that Cirila was
the common-law wife of Francisco and the donation inter vivos made by Francisco in her favor is
void under Article 87 of the Family Code, which provides:

Every donation or grant of gratuitous advantage, direct or indirect, between the spouses
during the marriage shall be void, except moderate gifts which the spouses may give
each other on the occasion of any family rejoicing. The prohibition shall also apply to
persons living together as husband and wife without a valid marriage.

On February 25, 1999, the trial court rendered judgment in favor of respondents, holding the
donation void under this provision of the Family Code. The trial court reached this conclusion
based on the testimony of Erlinda Tabancura and certain documents bearing the signature of
one "Cirila Comille." The documents were (1) an application for a business permit to operate as
real estate lessor, dated January 8, 1991, with a carbon copy of the signature "Cirila
Comille";22 (2) a sanitary permit to operate as real estate lessor with a health certificate showing
the signature "Cirila Comille" in black ink;23 and (3) the death certificate of the decedent with the
signature "Cirila A. Comille" written in black ink.24 The dispositive portion of the trial court's
decision states:

WHEREFORE, in view of the foregoing, judgment is rendered:

1. Declaring the Deed of Donation Inter Vivos executed by the late Francisco Comille
recorded as Doc. No. 7; Page No. 3; Book No. V; Series of 1991 in the Notarial Register
of Notary Public Vic T. Lacaya (Annex " A " to the Complaint) null and void;

2. Ordering the defendant to deliver possession of the house and lot subject of the deed
unto the plaintiffs within thirty (30) days after finality of this decision; and finally

3. Ordering the defendant to pay attorney's fees in the sum of P10,000.00.

SO ORDERED.25

Petitioner appealed to the Court of Appeals, which rendered on June 19, 2000 the decision
subject of this appeal. As already stated, the appeals court denied reconsideration. Its conclusion
was based on (1) the testimonies of Leticia, Erlinda, and Cirila; (2) the copies of documents
purportedly showing Cirila's use of Francisco's surname; (3) a pleading in another civil case
mentioning payment of rentals to Cirila as Francisco's common-law wife; and (4) the fact that
Cirila did not receive a regular cash wage.

Petitioner assigns the following errors as having been committed by the Court of Appeals:

(a) The judgment of the Court of Appeals that petitioner was the common-law wife of the
late Francisco Comille is not correct and is a reversible error because it is based on a
misapprehension of facts, and unduly breaks the chain of circumstances detailed by the
 totality of the evidence, its findings being predicated on totally incompetent or hearsay
evidence, and grounded on mere speculation, conjecture or possibility. (Salazar v.
Gutierrez, 33 SCRA 243 and other cases; cited in Quiason, Philippine Courts and their J
urisdictions, 1993 ed., p. 604)

(b) The Court of Appeals erred in shifting the burden of evidence from the plaintiff to
defendant. (Bunyi v. Reyes, 39 SCRA 504; Quiason, id.)

(c) The Court of Appeals decided the case in away probably not in accord with law or
with the applicable jurisprudence in Rodriguez v. Rodriguez, 20 SCRA 908, and Liguez v.
CA, 102 Phil. 577, 584.26

The issue in this case is whether the Court of Appeals correctly applied Art. 87 of the Family
Code to the circumstances of this case. After a review of the records, we rule in the affirmative.

The general rule is that only questions of law may be raised in a petition for review under Rule 45
of the Rules of Court, subject only to certain exceptions: (a) when the conclusion is a finding
grounded entirely on speculations, surmises, or conjectures; (b) when the inference made is
manifestly mistaken, absurd, or impossible; (c) where there is grave abuse of discretion; (d)
when the judgment is based on a misapprehension of facts; (e) when the findings of fact are
conflicting; (f) when the Court of Appeals, in making its findings, went beyond the issues of the
case and the same are contrary to the admissions of both appellant and appellee; (g) when the
findings of the Court of Appeals are contrary to those of the trial court; (h) when the findings of
fact are conclusions without citation of specific evidence on which they are based; (i) when the
finding of fact of the Court of Appeals is premised on the supposed absence of evidence but is
contradicted by the evidence on record; and G) when the Court of Appeals manifestly overlooked
certain relevant facts not disputed by the parties and which, if properly considered, would justify a
different conclusion.27 It appearing that the Court of Appeals based its findings on evidence
presented by both parties, the general rule should apply.

In Bitangcor v. Tan,28 we held that the term "cohabitation" or "living together as husband and
wife" means not only residing under one roof, but also having repeated sexual intercourse.
Cohabitation, of course, means more than sexual intercourse, especially when one of the parties
is already old and may no longer be interested in sex. At the very least, cohabitation
is public assumption by a man and a woman of the marital relation, and dwelling together as
man and wife, thereby holding themselves out to the public as such. Secret meetings or nights
clandestinely spent together, even if often repeated, do not constitute such kind of cohabitation;
they are merely meretricious.29 In this jurisdiction, this Court has considered as sufficient proof of
common-law relationship the stipulations between the parties, 30 a conviction of concubinage,31 or
the existence of legitimate children. 32

Was Cirila Francisco's employee or his common-law wife? Cirila admitted that she and Francisco
resided under one roof for a long time, It is very possible that the two consummated their
relationship, since Cirila gave Francisco therapeutic massage and Leticia said they slept in the
same bedroom. At the very least, their public conduct indicated that theirs was not just a
relationship of caregiver and patient, but that of exclusive partners akin to husband and wife.

Aside from Erlinda Tabancura's testimony that her uncle told her that Cirila was his mistress,
there are other indications that Cirila and Francisco were common-law spouses. Seigfredo
Tabancura presented documents apparently signed by Cirila using the surname "Comille." As
previously stated, these are an application for a business permit to operate as a real estate
lessor,33 a sanitary permit to operate as real estate lessor with a health certificate, 34 and the death
certificate of Francisco.35 These documents show that Cirila saw herself as Francisco's common-
law wife, otherwise, she would not have used his last name. Similarly, in the answer filed by
Francisco's lessees in "Erlinda Tabancura, et al. vs. Gracia Adriatico Sy and Antonio Sy," RTC
Civil Case No.4719 (for collection of rentals), these lessees referred to Cirila as "the common-law
 spouse of Francisco." Finally, the fact that Cirila did not demand from Francisco a regular cash
wage is an indication that she was not simply a caregiver-employee, but Francisco's common
law spouse. She was, after all, entitled to a regular cash wage under the law. 36 It is difficult to
believe that she stayed with Francisco and served him out of pure beneficence. Human reason
would thus lead to the conclusion that she was Francisco's common-law spouse.

Respondents having proven by a preponderance of evidence that Cirila and Francisco lived
together as husband and wife without a valid marriage, the inescapable conclusion is that the
donation made by Francisco in favor of Cirila is void under Art. 87 of the Family Code. 1âwphi1.nêt

WHEREFORE, the decision of the Court of Appeals affirming the decision of the trial court is
hereby AFFIRMED.

SO ORDERED.

Calimlim-Canullas, GR. No. 57499, 22 Jun 1984

G.R. No. L-57499 June 22, 1984

MERCEDES CALIMLIM- CANULLAS, petitioner,

vs.
HON. WILLELMO FORTUN, Judge, Court of First instance of Pangasinan, Branch I, and
CORAZON DAGUINES, respondents.

Fernandez Law Offices for petitioner.

Francisco Pulido for respondents.

MELENCIO-HERRERA, J.:

Petition for Review on certiorari assailing the Decision, dated October 6, 1980, and the
Resolution on the Motion for Reconsideration, dated November 27, 1980, of the then Court of
First Instance of Pangasinan, Branch I, in Civil Case No. 15620 entitled "Corazon DAGUINES vs.
MERCEDES Calimlim-Canullas," upholding the sale of a parcel of land in favor of DAGUINES
but not of the conjugal house thereon'

The background facts may be summarized as follows: Petitioner MERCEDES Calimlim-Canullas

and FERNANDO Canullas were married on December 19, 1962. They begot five children. They
lived in a small house on the residential land in question with an area of approximately 891
square meters, located at Bacabac, Bugallon, Pangasinan. After FERNANDO's father died in
1965, FERNANDO inherited the land.

In 1978, FERNANDO abandoned his family and was living with private respondent Corazon
DAGUINES. During the pendency of this appeal, they were convicted of concubinage in a
judgment rendered on October 27, 1981 by the then Court of First Instance of Pangasinan,
Branch II, which judgment has become final.

On April 15, 1980, FERNANDO sold the subject property with the house thereon to DAGUINES
for the sum of P2,000.00. In the document of sale, FERNANDO described the house as "also
inherited by me from my deceased parents."

Unable to take possession of the lot and house, DAGUINES initiated a complaint on June 19,
1980 for quieting of title and damages against MERCEDES. The latter resisted and claimed that
the house in dispute where she and her children were residing, including the coconut trees on
the land, were built and planted with conjugal funds and through her industry; that the sale of the
land together with the house and improvements to DAGUINES was null and void because they
are conjugal properties and she had not given her consent to the sale,

In its original judgment, respondent Court principally declared DAGUINES "as the lawful owner of
the land in question as well as the one-half () of the house erected on said land." Upon
reconsideration prayed for by MERCEDES, however, respondent Court resolved:

WHEREFORE, the dispositive portion of the Decision of this Court, promulgated

on October 6, 1980, is hereby amended to read as follows:

(1) Declaring plaintiff as the true and lawful owner of the land in question and the
10 coconut trees;

(2) Declaring as null and void the sale of the conjugal house to plaintiff on April
15, 1980 (Exhibit A) including the 3 coconut trees and other crops planted during
the conjugal relation between Fernando Canullas (vendor) and his legitimate
wife, herein defendant Mercedes Calimlim- Canullas;

xxx xxx xxx

The issues posed for resolution are (1) whether or not the construction of a conjugal house on
the exclusive property of the husband ipso facto gave the land the character of conjugal property;
and (2) whether or not the sale of the lot together with the house and improvements thereon was
valid under the circumstances surrounding the transaction.

The determination of the first issue revolves around the interpretation to be given to the second
paragraph of Article 158 of the Civil Code, which reads:

xxx xxx xxx

Buildings constructed at the expense of the partnership during the marriage on

land belonging to one of the spouses also pertain to the partnership, but the
value of the land shall be reimbursed to the spouse who owns the same.

We hold that pursuant to the foregoing provision both the land and the building belong to the
conjugal partnership but the conjugal partnership is indebted to the husband for the value of the
land. The spouse owning the lot becomes a creditor of the conjugal partnership for the value of
the lot, 1 which value would be reimbursed at the liquidation of the conjugal partnership. 
2

In his commentary on the corresponding provision in the Spanish Civil Code (Art. 1404),
Manresa stated:

El articulo cambia la doctrine; los edificios construidos durante el matrimonio en

suelo propio de uno de los conjuges son gananciales, abonandose el valor del
suelo al conj uge a quien pertenezca.

It is true that in the case of Maramba vs. Lozano,   relied upon by respondent Judge, it was held
3

that the land belonging to one of the spouses, upon which the spouses have built a house,
becomes conjugal property only when the conjugal partnership is liquidated and indemnity paid
to the owner of the land. We believe that the better rule is that enunciated by Mr. Justice J.B.L.
Reyes in Padilla vs. Paterno, 3 SCRA 678, 691 (1961), where the following was explained:
 As to the above properties, their conversion from paraphernal to conjugal assets
should be deemed to retroact to the time the conjugal buildings were first
constructed thereon or at the very latest, to the time immediately before the death
of Narciso A. Padilla that ended the conjugal partnership. They can not be
considered to have become conjugal property only as of the time their values
were paid to the estate of the widow Concepcion Paterno because by that time
the conjugal partnership no longer existed and it could not acquire the ownership
of said properties. The acquisition by the partnership of these properties was,
under the 1943 decision, subject to the suspensive condition that their values
would be reimbursed to the widow at the liquidation of the conjugal partnership;
once paid, the effects of the fulfillment of the condition should be deemed to
retroact to the date the obligation was constituted (Art. 1187, New Civil Code) ...

The foregoing premises considered, it follows that FERNANDO could not have alienated the
house and lot to DAGUINES since MERCEDES had not given her consent to said sale.  4

Anent the second issue, we find that the contract of sale was null and void for being contrary to
morals and public policy. The sale was made by a husband in favor of a concubine after he had
abandoned his family and left the conjugal home where his wife and children lived and from
whence they derived their support. That sale was subversive of the stability of the family, a basic
social institution which public policy cherishes and protects. 5

Article 1409 of the Civil Code states inter alia that: contracts whose cause, object, or purpose is
contrary to law, morals, good customs, public order, or public policy are void and inexistent from
the very beginning.

Article 1352 also provides that: "Contracts without cause, or with unlawful cause, produce no
effect whatsoever. The cause is unlawful if it is contrary to law, morals, good customs, public
order, or public policy."

Additionally, the law emphatically prohibits the spouses from selling property to each other
subject to certain exceptions.  Similarly, donations between spouses during marriage are
6

prohibited.   And this is so because if transfers or con conveyances between spouses were
7

allowed during marriage, that would destroy the system of conjugal partnership, a basic policy in
civil law. It was also designed to prevent the exercise of undue influence by one spouse over the
other,  as well as to protect the institution of marriage, which is the cornerstone of family law. The
8

prohibitions apply to a couple living as husband and wife without benefit of marriage, otherwise,
"the condition of those who incurred guilt would turn out to be better than those in legal union."
Those provisions are dictated by public interest and their criterion must be imposed upon the wig
of the parties. That was the ruling in Buenaventura vs. Bautista, also penned by Justice JBL
Reyes (CA) 50 O.G. 3679, and cited in Matabuena vs. Cervantes.   We quote hereunder the
9

pertinent dissertation on this point:

We reach a different conclusion. While Art. 133 of the Civil Code considers as
void a donation between the spouses during the marriage, policy considerations
of the most exigent character as wen as the dictates of morality require that
the same prohibition should apply to a common-law relationship.

As announced in the outset of this opinion, a 1954 Court of Appeals decision,

Buenaventura vs. Bautista, 50 OG 3679, interpreting a similar provision of the old
Civil Code speaks unequivocally. If the policy of the law is, in the language of the
opinion of the then Justice J.B.L. Reyes of that Court, 'to prohibit donations in
favor of the other consort and his descendants because of fear of undue
influence and improper pressure upon the donor, a prejudice deeply rooted in our
ancient law, ..., then there is every reason to apply the same prohibitive policy to
persons living together as husband and wife without benefit of nuptials. For it is
 not to be doubted that assent to such irregular connection for thirty years
bespeaks greater influence of one party over the other, so that the danger that
the law seeks to avoid is correspondingly increased'. Moreover, as pointed out by
Ulpian (in his lib 32 ad Sabinum, fr. 1), "It would not be just that such donations
— should subsist, lest the conditions of those who incurred guilt should turn out
to be better." So long as marriage remains the cornerstone of our family law,
reason and morality alike demand that the disabilities attached to marriage
should likewise attach to concubinage (Emphasis supplied),

WHEREFORE, the Decision of respondent Judge, dated October 6, 1980, and his Resolution of
November 27, 1980 on petitioner's Motion for Reconsideration, are hereby set aside and the sale
of the lot, house and improvements in question, is hereby declared null and void. No costs.

SO ORDERED.

C. Absolute Community of Property

a. ADMINISTRATION & ENJOYMENT – ART 96
9)Republic v. Sps Domingo, GR No. 197315, 10/10/2012

REPUBLIC OF THE PHILIPPINES, Petitioner,

vs.
ANGEL T. DOMINGO and BENJAMIN T. DOMINGO, Respondents.

RESOLUTION

CARPIO, J.:

The Case

This is a petition  for review on certiorari under Rule 45 of the Rules of Court. The petition
1 

challenges the I7 June 20 II Decision of the Court of Appeals in CA-G.R. CV No. 93594, affirming
2 

the 31 October 2008 Order of the Regional Trial Court (RTC), Judicial Region 3, Branch 31,
3 

Guimba, Nueva Ecija, in Case No. 1179-G.

The Facts

Angel Casimiro M. Tinio (Tinio) inherited from his sister, Trinidad T. Ramoso (Trinidad), an
8,993-square meter parcel of land situated in Guimba, Nueva Ecija. The estate of Trinidad was
settled in Special Proceedings No. 19382 entitled "In the Matter of the Testate Estate of Trinidad
Vda. De Ramoso." The property is covered by Original Certificate of Title (OCT) No.
17472 under the names of spouses Feliciano and Trinidad Ramoso (Spouses Ramoso).
4 

In a deed of sale dated 22 February 1978, Tinio sold the property to respondents Angel and
5 

Benjamin T. Domingo (Domingos). Tinio gave to the Domingos the owners’ duplicate of OCT No.
17472. The Domingos inquired with the Register of Deeds of North Nueva Ecija, Talavera,
Nueva Ecija, about the original copy of OCT No. 17472. The Registry of Deeds could not find the
original copy despite diligent efforts; thus, it was deemed lost or destroyed.

In a petition dated 18 August 2006 and filed with the RTC, the Domingos prayed for the
6 

reconstitution of the original copy of OCT No. 17472. They filed the petition pursuant to Section
10 of Republic Act (RA) No. 26. The RTC included in the notice of hearing the names of the
7  8 

owners of the adjoining lots, the Spouses Ramoso, the Domingos, Tinio, and the concerned
government agencies.
 RTC’s Ruling

In its 31 October 2008 Order, the RTC found sufficient basis for the reconstitution of OCT No.
17472. The RTC ordered the Land Registration Authority to reconstitute the original copy of OCT
No. 17472.

Petitioner Republic of the Philippines, through the Office of the Solicitor General (OSG),
appealed to the Court of Appeals. The OSG raised as issue that the Domingos did not comply
with Sections 12 and 13 of RA No. 26 because they failed to notify the heirs of the Spouses
Ramoso and a certain Senen J. Gabaldon (Gabaldon) of the reconstitution proceedings. The
names of the heirs of the Spouses Ramoso and Gabaldon do not appear in the owners’ duplicate
of OCT No. 17472.

The Court of Appeals’ Ruling

In its 17 June 2011 Decision, the Court of Appeals dismissed the appeal and affirmed the RTC’s
31 October 2008 Order. The Court of Appeals held:

The contention of the OSG is devoid of merit. The OSG’s assertion that Sections 12 and 13 of
R.A. No. 26 was [sic] not complied with is misplaced because the said provisions find no
application in the petition for reconstitution that was filed by the petitioners-appellees.

Section 2 of the said Act explicitly provides from what sources the original certificate of title shall
be reconstituted. x x x

A perusal of the petition x x x reveals that the same was filed pursuant to Section 10 of R.A. No.
26 and not Sections 12 and 13 of the said Act which refer to other sources aside from the
owner’s or co-owner’s duplicate of the certificate of title. It is clear from the averments of the
petition that the source for reconstitution was the owner’s duplicate of OCT No. 17472 which
remained in the petitioners-appellees’ custody. x x x

xxxx

x x x The names of the interested parties are x x x required to be listed in the notice of the
petition. In this case, however, the rule only provides that the interested parties to be named in
the notice are those whose names that [sic] appeared in the certificate of title to be reconstituted.
An examination of the owner’s duplicate of OCT No. 17472 shows that the title does not contain
the names of the heirs of the registered owners and even the name of Senen Gabaldon or his
heirs.
9

Hence, the present petition. The OSG again raises as issue that the Domingos did not comply
with Sections 12 and 13 of RA No. 26 because they failed to notify the heirs of the Spouses
Ramoso and Gabaldon of the reconstitution proceedings.

The Court’s Ruling

The petition is unmeritorious.

Sections 2 and 3 of RA No. 26 enumerate the sources from which certificates of title may be
reconstituted:

Section 2. Original certificates of title shall be reconstituted from such of the sources hereunder
enumerated as may be available, in the following order:

(a) The owner’s duplicate of the certificate of title;

 (b) The co-owner’s, mortgagee’s, or lessee’s duplicate of the certificate of title;

(c) A certified copy of the certificate of title, previously issued by the register of deeds or
by a legal custodian thereof;

(d) An authenticated copy of the decree of registration or patent, as the case may be,
pursuant to which the original certificate of title was issued;

(e) A document, on file in the registry of deeds, by which the property, the description of
which is given in said document, is mortgaged, leased or encumbered, or an
authenticated copy of said document showing that its original had been registered; and

(f) Any other document which, in the judgment of the court, is sufficient and proper basis
for reconstituting the lost or destroyed certificate of title.

Section 3. Transfer certificates of title shall be reconstituted from such of the sources hereunder
enumerated as may be available, in the following order:

(a) The owner’s duplicate of the certificate of title;

(b) The co-owner’s, mortgagee’s, or lessee’s duplicate of the certificate of title;

(c) A certified copy of the certificate of title, previously issued by the register of deeds or
by a legal custodian thereof;

(d) The deed of transfer or other document, on file in the registry of deeds, containing the
description of the property, or an authenticated copy thereof, showing that its original had
been registered, and pursuant to which the lost or destroyed transfer certificate of title
was issued;

(e) A document, on file in the registry of deeds, by which the property, the description of
which is given in said document, is mortgaged, leased or encumbered, or an
authenticated copy of said document showing that its original had been registered; and

(f) Any other document which, in the judgment of the court, is sufficient and proper basis
for reconstituting the lost or destroyed certificate of title.

RA No. 26 provides two procedures and sets of requirements in the reconstitution of lost or
destroyed certificates of title depending on the source of the petition for reconstitution. Section 10
in relation to Section 9 provides the procedure and requirements for sources falling under
Sections 2(a), 2(b), 3(a), 3(b) and 4(a). Sections 12 and 13 provide the procedure and
requirements for sources falling under Sections 2(c), 2(d), 2(e) 2(f), 3(c), 3(d), 3(e), and 3(f).
In Puzon v. Sta. Lucia Realty & Development, Inc., the Court held:
10 

x x x RA 26 separates petitions for reconstitution of lost or destroyed certificates of title into two
main groups with two different requirements and procedures. Sources enumerated in Sections
2(a), 2(b), 3(a), 3(b) and 4(a) of RA 26 are lumped under one group (Group A); and sources
enumerated in Sections 2(c), 2(d), 2(e), 2(f), 3(c), 3(d), 3(e), and 3(f) are placed together under
another group (Group B). For Group A, the requirements for judicial reconstitution are set forth in
Section 10 in relation to Section 9 of RA 26; while for Group B, the requirements are in Sections
12 and 13 of the same law. 11

In the present case, the records show that the source of the petition for reconstitution is the
owners’ duplicate of OCT No. 17472, which falls under Section 2(a). Paragraphs 4, 5, 6 and 13
of the petition state:
 4. That after the execution of the Deed of Absolute Sale, the owner’s copy of OCT No.
17472 was turned over by the [vendor], Angel Tinio, to herein [petitioners] being the
[vendees] of the subject property which remained in the possession and custody of the
petitioners up to the present. A photocopy of the owner’s copy of OCT No. 17472 is
hereto attached and marked as ANNEX B;

5. The Register of Deeds for the Province of Nueva Ecija has custody over the original
copy of OCT No. 17472. However, verification of the records of the said office revealed
that the said original copy of OCT No. 17472 "is not on file and the same could not be
located despite diligent efforts exerted by the records personel", and thus, OCT No.
17472 must be deemed to have been lost or destroyed. A photocopy of the Certification
dated October 3, 2003 issued by Atty. Elias L. Estrella, Acting Register of Deeds, is
hereto attached and made part hereof as ANNEX C;

6. Original Certificate of Title No. 17472 was in full force and effect at the time of the loss
and that its owner’s duplicate copy is in due form, without any apparent intentional
alteration or erasure;

xxxx

13. The instant petition was filed pursuant to Section 10, in relation to Section 2(a),
of Republic Act No. 26, otherwise known as an Act Providing a Special Procedure for
the Reconstitution of Torrens Certificate of Title Lost or Destroyed. (Boldfacing supplied)
12 

Since the source of the petition for reconstitution falls under Section 2(a), the procedure and
requirements that should be observed are those provided under Section 10 in relation to Section
9, not Sections 12 and 13. In Republic of the Philippines v. Spouses
Bondoc, citing Puzon and Republic of the Philippines v. Planes, the Court held:
13  14 

Upon close scrutiny of the records, as well as the evidence adduced in this case, this Court finds
that the petition for reconstitution filed with the RTC is governed by Section 10 in relation to
Section 9 of Republic Act No. 26 and not by Sections 12 and 13 of the same Act, as argued by
the parties.

Paragraph 8 of the petition for reconstitution states:

8. Petitioners desire that the burned originals of the aforecited certificates of title on file in the
Office of the Register of Deeds of Lucena City be judicially reconstituted and for this purpose, it is
respectfully requested that the 3rd owner’s duplicate certificate copy of Original Certificate of Title
No. 1733 (394) and 2nd owner’s duplicate certificate copy of Original Certificate of Title No. 1767
(406), respectively, which are under the possession and custody of herein petitioners, be made
sources thereof, photo copies of the aforementioned owner’s duplicate copies of said titles are
attached hereto as Annexes "D" and "E", respectively.

Pursuant to Puzon v. Sta. Lucia Realty and Development, Inc., and Republic v. Planes, since
the source of the petition for reconstitution is the owner’s duplicate copy of OCT No. 1733
(394) and OCT No. 1767 (406), the procedure and requirements for the trial court to validly
acquire jurisdiction over the case, are governed by Section 10 in relation to Section 9 of
Republic Act No. 26. (Boldfacing supplied)
15 

In Republic of the Philippines v. Planes, citing Puzon, the Court held that, "In the case at bar, the
source of the petition for reconstitution was the owner’s duplicate copy of OCT No. 219. Thus,
pursuant to Puzon vs. Sta. Lucia Realty and Development, Inc., the petition is governed by
Section 10 of R.A. No. 26." 16
Section 10 of RA No. 26 states that the notice shall "be published in the manner stated in section
nine." Section 10 states:

Section 10. Nothing hereinbefore provided shall prevent any registered owner or person in
interest from filing the petition mentioned in section five of this Act directly with the proper Court
of First Instance, based on sources enumerated in Sections 2(a), 2(b), 3(a), 3(b), and/or 4(a) of
this Act: Provided, however, That the Court shall cause a notice of the petition, before
hearing and granting the same, to be published in the manner stated in section
nine hereof: and, provided, further, That certificates of title reconstituted pursuant to this section
shall not be subject to the encumbrance referred to in section seven of this Act. (Boldfacing
supplied)

Section 9 of RA No. 26 specifies what should be included in the notice. Section 9 states:

Section 9. A registered owner desiring to have his reconstituted certificate of title freed from the
encumbrance mentioned in section seven of this Act, may file a petition to that end with the
proper Court of First Instance, giving his reason or reasons therefor. A similar petition may,
likewise, be filed by a mortgagee, lessee or other lien holder whose interest is annotated in the
reconstituted certificate of title. Thereupon, the court shall cause a notice of the petition to be
published, at the expense of the petitioner, twice in successive issues of the Official Gazette, and
to be posted on the main entrance of the provincial building and of the municipal building of the
municipality or city in which the land lies, at least thirty days prior to the date of hearing, and after
hearing shall determine the petition and render such judgment as justice and equity may
require. The notice shall specify, among other things, the number of the certificate of title,
the name of the registered owner, the names of the interested parties appearing in the
reconstituted certificate of title, the location of the property, and the date on which all
persons having an interest in the property must appear and file such claim as they may
have. (Boldfacing supplied)

In Republic of the Philippines v. Spouses Bondoc, the Court held:

x x x For the trial court to validly acquire jurisdiction to hear and decide a petition for
reconstitution filed under Section 10, in relation to Section 9 of Republic Act No. 26, it is required
that thirty days before the date of hearing, (1) a notice be published in two successive issues of
the Official Gazette at the expense of the petitioner, and that (2) such notice be posted at the
main entrances of the provincial building and of the municipal hall where the property is
located. The notice shall state the following: (1) the number of the certificate of title, (2) the
name of the registered owner, (3) the names of the interested parties appearing in the
reconstituted certificate of title, (4) the location of the property, and (5) the date on which
all persons having an interest in the property must appear and file such claim as they may
have. (Boldfacing supplied)
17 

In the present case, the notice stated the number of the certificate of title, the name of the
registered owner, the names of the interested parties appearing in the reconstituted certificate of
title, the location of the property, and the date on which all persons having an interest in the
property must appear and file such claim as they may have. Thus, the RTC validly acquired
jurisdiction to hear and decide the petition for reconstitution.

The requirements under Sections 12 and 13 do not apply to petitions for reconstitution based on
Section 2(a). In Puzon, the Comi held that, "the requirements under Sections 12 and 13 do not
apply to all petitions for judicial reconstitution, but only to those based on any of the sources
specified in Section 12; that is, 'sources enumerated in Section 2( c), 2( d), 2(e), 2(t), 3(c), 3(d),
3(e), and/or 3(t) of this Act."'  In Angat v. Republic, the Court held that, "Sections 12 and 13 of
18  19 

Republic Act No. 26 x x x are actually irrelevant to the Petition for Reconstitution considering that
these provisions apply particularly to petitions for reconstitution from sources enumerated under
Sections 2(c), 2(d), 2(e), 2(t), 3(c), 3(d), 3(e), and/or 3(t) of Republic Act No. 26."20
 WHEREFORE, the petition is DENIED. The Court AFFIRMS the 17 June 2011 Decision of the
Court of Appeals in CA-G.R. CV No. 93594.

SO ORDERED.

a1. DISSOLUTION – Art 99

10Heirs of Dr. Intac v. CA, GR No. 173211, 11 October 2012

HEIRS OF DR. MARIO S. INTAC and ANGELINA MENDOZA-INTAC, Petitioners,

vs.
COURT OF APPEALS and SPOUSES MARCELO ROY, JR. and JOSEFINA MENDOZA-ROY
and SPOUSES DOMINADOR LOZADA and MARTINA MENDOZA-LOZADA, Respondents.

DECISION

MENDOZA, J.:

This is a Petition for Review on Certiorari under Rule 45 assailing the February 16, 2006
Decision of the Court of Appeals (CA), in CA G.R. CV No. 75982, which modified the April 30,
1 

2002 Decision of the Regional Trial Court, Branch 220, Quezon City ( RTC), in Civil Case No. Q-
2 

94-19452, an action for cancellation of transfer certificate of title and reconveyance of property.

The Facts

From the records, it appears that Ireneo Mendoza (Ireneo), married to Salvacion Fermin
(Salvacion), was the owner of the subject property, presently covered by TCT No. 242655 of the
Registry of Deeds of Quezon City and situated at No. 36, Road 8, Bagong Pag-asa, Quezon
City, which he purchased in 1954. Ireneo had two children: respondents Josefina and Martina
(respondents), Salvacion being their stepmother. When he was still alive, Ireneo, also took care
of his niece, Angelina, since she was three years old until she got married. The property was
then covered by TCT No. 106530 of the Registry of Deeds of Quezon City. On October 25, 1977,
Ireneo, with the consent of Salvacion, executed a deed of absolute sale of the property in favor of
Angelina and her husband, Mario (Spouses Intac). Despite the sale, Ireneo and his family,
including the respondents, continued staying in the premises and paying the realty taxes. After
Ireneo died intestate in 1982, his widow and the respondents remained in the premises. After
3 

Salvacion died, respondents still maintained their residence there. Up to the present, they are in
the premises, paying the real estate taxes thereon, leasing out portions of the property, and
collecting the rentals.
4

The Dispute

The controversy arose when respondents sought the cancellation of TCT No. 242655, claiming
that the sale was only simulated and, therefore, void. Spouses Intac resisted, claiming that it was
a valid sale for a consideration.

On February 22, 1994, respondents filed the Complaint for Cancellation of Transfer Certificate of
Title (TCT) No. 242655 against Spouses Intac before the RTC. The complaint prayed not only for
5 

the cancellation of the title, but also for its reconveyance to them. Pending litigation, Mario died
on May 20, 1995 and was substituted by his heirs, his surviving spouse, Angelina, and their
children, namely, Rafael, Kristina, Ma. Tricia Margarita, Mario, and Pocholo, all surnamed Intac
(petitioners).

Averments of the Parties

In their Complaint, respondents alleged, among others, that when Ireneo was still alive, Spouses
Intac borrowed the title of the property (TCT No. 106530) from him to be used as collateral for a
loan from a financing institution; that when Ireneo informed respondents about the request of
Spouses Intac, they objected because the title would be placed in the names of said spouses
and it would then appear that the couple owned the property; that Ireneo, however, tried to
appease them, telling them not to worry because Angelina would not take advantage of the
situation considering that he took care of her for a very long time; that during his lifetime, he
informed them that the subject property would be equally divided among them after his death;
and that respondents were the ones paying the real estate taxes over said property.

It was further alleged that after the death of Ireneo in 1982, a conference among relatives was
held wherein both parties were present including the widow of Ireneo, Salvacion; his nephew,
Marietto Mendoza (Marietto); and his brother, Aurelio Mendoza (Aurelio). In the said conference,
it was said that Aurelio informed all of them that it was Ireneo’s wish to have the property divided
among his heirs; that Spouses Intac never raised any objection; and that neither did they inform
all those present on that occasion that the property was already sold to them in 1977. 6

Respondents further alleged that sometime in 1993, after the death of Salvacion, rumors spread
in the neighborhood that the subject property had been registered in the names of Spouses
Intac; that upon verification with the Office of the Register of Deeds of Quezon City, respondents
were surprised to find out that TCT No. 106530 had indeed been cancelled by virtue of the deed
of absolute sale executed by Ireneo in favor of Spouses Intac, and as a result, TCT No. 242655
was issued in their names; that the cancellation of TCT No. 106530 and the subsequent
issuance of TCT No. 242655 were null and void and had no legal effect whatsoever because the
deed of absolute sale was a fictitious or simulated document; that the Spouses Intac were guilty
of fraud and bad faith when said document was executed; that Spouses Intac never informed
respondents that they were already the registered owners of the subject property although they
had never taken possession thereof; and that the respondents had been in possession of the
subject property in the concept of an owner during Ireneo’s lifetime up to the present.

In their Answer, Spouses Intac countered, among others, that the subject property had been
7 

transferred to them based on a valid deed of absolute sale and for a valuable consideration; that
the action to annul the deed of absolute sale had already prescribed; that the stay of
respondents in the subject premises was only by tolerance during Ireneo’s lifetime because they
were not yet in need of it at that time; and that despite respondents’ knowledge about the sale
that took place on October 25, 1977, respondents still filed an action against them.

Ruling of the RTC

On April 30, 2002, the RTC rendered judgment in favor of respondents and against Spouses
Intac. The dispositive portion of its Decision reads:

WHEREFORE, premises considered, judgment is hereby rendered:

(1) Declaring the Deed of Absolute Sale executed by Ireneo Mendoza in favor of Mario
and Angelina Intac dated October 25, 1977 as an equitable mortgage;

(2) Ordering the Register of Deeds of Quezon City to cancel Transfer Certificate Title No.
242655 and, in lieu thereof, issue a new Transfer Certificate of Title in the name of Ireneo
Mendoza; and

(3) Ordering defendants to pay plaintiffs the amount of Thirty Thousand Pesos
(Php30,000.00) as and for attorney’s fees.

The other claims for damages are hereby denied for lack of merit.
SO ORDERED. 8

The RTC ruled, among others, that the sale between Ireneo and Salvacion, on one hand, and
Spouses Intac was null and void for being a simulated one considering that the said parties had
no intention of binding themselves at all. It explained that the questioned deed did not reflect the
true intention of the parties and construed the said document to be an equitable mortgage on the
following grounds:  the signed document did not express the real intention of the contracting
1 

parties because Ireneo signed the said document only because he was in urgent need of
funds;  the amount of ₱60,000.00 in 1977 was too inadequate for a purchase price of a 240-
2 

square meter lot located in Quezon City;  Josefina and Martina continued to be in possession of
3 

the subject property from 1954 and even after the alleged sale took place in 1977 until this case
was filed in 1994; and  the Spouses Intac started paying real estate taxes only in 1999. The RTC
4 

added that the Spouses Intac were guilty of fraud because they effected the registration of the
subject property even though the execution of the deed was not really intended to transfer the
ownership of the subject property.

Ruling of the CA

On appeal, the CA modified the decision of the RTC. The CA ruled that the RTC erred in first
declaring the deed of absolute sale as null and void and then interpreting it to be an equitable
mortgage. The CA believed that Ireneo agreed to have the title transferred in the name of the
Spouses Intac to enable them to facilitate the processing of the mortgage and to obtain a loan.
This was the exact reason why the deed of absolute sale was executed. Marietto testified that
Ireneo never intended to sell the subject property to the Spouses Intac and that the deed of sale
was executed to enable them to borrow from a bank. This fact was confirmed by Angelina herself
when she testified that she and her husband mortgaged the subject property sometime in July
1978 to finance the construction of a small hospital in Sta. Cruz, Laguna.

The CA further observed that the conduct of Spouses Intac belied their claim of ownership. When
the deed of absolute sale was executed, Spouses Intac never asserted their ownership over the
subject property, either by collecting rents, by informing respondents of their ownership or by
demanding possession of the land from its occupants. It was not disputed that it was
respondents who were in possession of the subject property, leasing the same and collecting
rentals. Spouses Intac waited until Ireneo and Salvacion passed away before they disclosed the
transfer of the title to respondents. Hence, the CA was of the view that the veracity of their claim
of ownership was suspicious.

Moreover, wrote the CA, although Spouses Intac claimed that the purchase of the subject
property was for a valuable consideration (P60,000.00), they admitted that they did not have any
proof of payment. Marietto, whose testimony was assessed by the RTC to be credible, testified
that there was no such payment because Ireneo never sold the subject property as he had no
intention of conveying its ownership and that his only purpose in lending the title was to help
Spouses Intac secure a loan. Thus, the CA concluded that the deed of absolute sale was a
simulated document and had no legal effect.

Finally, the CA stated that even assuming that there was consent, the sale was still null and void
because of lack of consideration. The decretal portion of the CA Decision reads:

WHEREFORE, in view of the foregoing premises, the decision of the Regional Trial Court of
Quezon City, Branch 220, is AFFIRMED with modifications, as follows:

1. The Deed of Absolute Sale dated October 25, 1977 executed by Ireneo Mendoza and
Salvacion Fermen in favor of Spouses Mario and Angelina Intac is hereby declared NULL
AND VOID;
 2. the Register of Deed[s] of Quezon City is ordered to cancel TCT No. 242655 and, in
lieu thereof, issue a new one and reinstate Ireneo Mendoza as the registered owner;

3. The defendant appellants are hereby ordered to pay the plaintiff appellees the amount
of thirty thousand pesos (Php30,000.00) as and for attorney’s fees; and

4. The other claims for damages are denied for lack of merit.

SO ORDERED. 9

Not in conformity, petitioners filed this petition for review anchored on the following

ASSIGNMENT OF ERRORS

THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT AFFIRMED

THE DECISION OF THE REGIONAL TRIAL COURT DATED FEBRUARY 16, 2006
WHICH WAS CONTRARY TO THE APPLICABLE LAWS AND EXISTING
JURISPRUDENCE.

II

THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT CLEARLY

OVERLOOKED, MISUNDERSTOOD AND/OR MISAPPLIED THE EVIDENCE
PRESENTED IN THE COURT A QUO. 10

Petitioners’ position

Petitioners primarily argue that the subject deed of sale was a valid and binding contract between
the parties. They claim that all the elements of a valid contract of sale were present, to wit: [a]
consent or meeting of the minds, that is, consent to transfer ownership in exchange of price; [b]
determinate subject matter; and [c] price certain in money or its equivalent.

Petitioners claim that respondents have validly gave their consent to the questioned sale of the
subject property. In fact, it was Ireneo and Salvacion who approached them regarding their
intention to sell the subject property. Ireneo and Salvacion affixed their signatures on the
questioned deed and never brought any action to invalidate it during their lifetime. They had all
the right to sell the subject property without having to inform their children of their intention to sell
the same. Ordinary human experience dictates that a party would not affix his or her signature on
any written instrument which would result in deprivation of one’s property right if there was really
no intention to be bound by it. A party would not keep silent for several years regarding the
validity and due execution of a document if there was an issue on the real intention of the
vendors. The signatures of Ireneo and Salvacion meant that they had knowingly and willfully
entered into such agreement and that they were prepared for the consequences of their act.

Respondents’ Position

Respondents are of the position that the RTC and the CA were correct in ruling that the
questioned deed of absolute sale was a simulated one considering that Ireneo and Salvacion
had no intention of selling the subject property. The true intention rather was that Spouses Intac
would just borrow the title of the subject property and offer it as a collateral to secure a loan. No
money actually changed hands.
According to respondents, there were several circumstances which put in doubt the validity of the
deed of absolute sale. First, the parties were not on equal footing because Angelina was a doctor
by profession while Ireneo and Salvacion were less educated people who were just motivated by
their trust, love and affection for her whom they considered as their own child. Second, if there
was really a valid sale, it was just and proper for Spouses Intac to divulge the conveyance to
respondents, being compulsory heirs, but they did not. Third, Ireneo and Salvacion did nothing to
protect their interest because they banked on the representation of Spouses Intac that the title
would only be used to facilitate a loan with a bank. Fourth, Ireneo and Salvacion remained in
possession of the subject property without being disturbed by Spouses Intac. Fifth, the price of
the sale was inadequate and inequitable for a prime property located in Pag-asa, Quezon City.
Sixth, Ireneo and Salvacion had no intention of selling the subject property because they had
heirs who would inherit the same. Seventh, the Spouses Intac abused the trust and affection of
Ireneo and Salvacion by arrogating unto themselves the ownership of the subject property to the
prejudice of his own children, Josefina and Martina.

Finally, petitioners could not present a witness to rebut Marietto’s testimony which was
straightforward and truthful.

The Court’s Ruling

Basically, the Court is being asked to resolve the issue of whether the Deed of Absolute
Sale, dated October 25, 1977, executed by and between Ireneo Mendoza and Salvacion
11 

Fermin, as vendors, and Mario Intac and Angelina Intac, as vendees, involving the subject real
property in Pagasa, Quezon City, was a simulated contract or a valid agreement.

The Court finds no merit in the petition.

A contract, as defined in the Civil Code, is a meeting of minds, with respect to the other, to give
something or to render some service. Article 1318 provides:

Art. 1318. There is no contract unless the following requisites concur:

(1) Consent of the contracting parties;

(2) Object certain which is the subject matter of the contract;

(3) Cause of the obligation which is established.

Accordingly, for a contract to be valid, it must have three essential elements: (1) consent of the
contracting parties; (2) object certain which is the subject matter of the contract; and (3) cause of
the obligation which is established. 12

All these elements must be present to constitute a valid contract. Consent is essential to the
existence of a contract; and where it is wanting, the contract is non-existent. In a contract of sale,
its perfection is consummated at the moment there is a meeting of the minds upon the thing that
is the object of the contract and upon the price. Consent is manifested by the meeting of the offer
and the acceptance of the thing and the cause, which are to constitute the contract.

In this case, the CA ruled that the deed of sale executed by Ireneo and Salvacion was absolutely
simulated for lack of consideration and cause and, therefore, void. Articles 1345 and 1346 of the
Civil Code provide:

Art. 1345. Simulation of a contract may be absolute or relative. The former takes place when the
parties do not intend to be bound at all; the latter, when the parties conceal their true agreement.
Art. 1346. An absolutely simulated or fictitious contract is void. A relative simulation, when it does
not prejudice a third person and is not intended for any purpose contrary to law, morals, good
customs, public order or public policy binds the parties to their real agreement.

If the parties state a false cause in the contract to conceal their real agreement, the contract is
only relatively simulated and the parties are still bound by their real agreement. Hence, where the
essential requisites of a contract are present and the simulation refers only to the content or
terms of the contract, the agreement is absolutely binding and enforceable between the parties
and their successors in interest.13

In absolute simulation, there is a colorable contract but it has no substance as the parties have
no intention to be bound by it. "The main characteristic of an absolute simulation is that the
apparent contract is not really desired or intended to produce legal effect or in any way alter the
juridical situation of the parties." "As a result, an absolutely simulated or fictitious contract is
14 

void, and the parties may recover from each other what they may have given under the
contract."
15

In the case at bench, the Court is one with the courts below that no valid sale of the subject
property actually took place between the alleged vendors, Ireneo and Salvacion; and the alleged
vendees, Spouses Intac. There was simply no consideration and no intent to sell it.

Critical is the testimony of Marietto, a witness to the execution of the subject absolute deed of
sale. He testified that Ireneo personally told him that he was going to execute a document of sale
because Spouses Intac needed to borrow the title to the property and use it as collateral for their
loan application. Ireneo and Salvacion never intended to sell or permanently transfer the full
ownership of the subject property to Spouses Intac. Marietto was characterized by the RTC as a
credible witness.

Aside from their plain denial, petitioners failed to present any concrete evidence to disprove
Marietto’s testimony. They claimed that they actually paid P150,000.00 for the subject property.
They, however, failed to adduce proof, even by circumstantial evidence, that they did, in fact, pay
it. Even for the consideration of P60,000.00 as stated in the contract, petitioners could not show
any tangible evidence of any payment therefor. Their failure to prove their payment only
strengthened Marietto’s story that there was no payment made because Ireneo had no intention
to sell the subject property.

Angelina’s story, except on the consideration, was consistent with that of Marietto. Angelina
testified that she and her husband mortgaged the subject property sometime in July 1978 to
finance the construction of a small hospital in Sta. Cruz, Laguna. Angelina claimed that Ireneo
offered the property as he was in deep financial need.

Granting that Ireneo was in financial straits, it does not prove that he intended to sell the property
to Angelina. Petitioners could not adduce any proof that they lent money to Ireneo or that he
shared in the proceeds of the loan they had obtained. And, if their intention was to build a
hospital, could they still afford to lend money to Ireneo? And if Ireneo needed money, why would
he lend the title to Spouses Intac when he himself could use it to borrow money for his needs? If
Spouses Intac took care of him when he was terminally ill, it was not surprising for Angelina to
reciprocate as he took care of her since she was three (3) years old until she got married. Their
caring acts for him, while they are deemed services of value, cannot be considered as
consideration for the subject property for lack of quantification and the Filipino culture of taking
care of their elders.

Thus, the Court agrees with the courts below that the questioned contract of sale was only for the
purpose of lending the title of the property to Spouses Intac to enable them to secure a loan.
Their arrangement was only temporary and could not give rise to a valid sale. Where there is no
consideration, the sale is null and void ab initio. In the case of Lequin v. Vizconde, the Court
16 

wrote:

There can be no doubt that the contract of sale or Kasulatan lacked the essential element of
consideration. It is a well-entrenched rule that where the deed of sale states that the purchase
price has been paid but in fact has never been paid, the deed of sale is null and void ab initio for
lack of consideration. Moreover, Art. 1471 of the Civil Code, which provides that "if the price is
simulated, the sale is void," also applies to the instant case, since the price purportedly paid as
indicated in the contract of sale was simulated for no payment was actually made.

Consideration and consent are essential elements in a contract of sale.  Where a party’s consent
1âwphi1

to a contract of sale is vitiated or where there is lack of consideration due to a simulated price,
the contract is null and void ab initio. [Emphases supplied]

More importantly, Ireneo and his family continued to be in physical possession of the subject
property after the sale in 1977 and up to the present. They even went as far as leasing the same
and collecting rentals. If Spouses Intac really purchased the subject property and claimed to be
its true owners, why did they not assert their ownership immediately after the alleged sale took
place? Why did they have to assert their ownership of it only after the death of Ireneo and
Salvacion? One of the most striking badges of absolute simulation is the complete absence of
any attempt on the part of a vendee to assert his right of dominion over the property. 17

On another aspect, Spouses Intac failed to show that they had been paying the real estate taxes
of the subject property. They admitted that they started paying the real estate taxes on the
property for the years 1996 and 1997 only in 1999. They could only show two (2) tax receipts
(Real Property Tax Receipt No. 361105, dated April 21, 1999, and Real Property Tax Receipt
No. 361101, dated April 21, 1999). Noticeably, petitioners’ tax payment was just an afterthought.
18 

The non-payment of taxes was also taken against the alleged vendees in the case of Lucia
Carlos Aliño v. Heirs of Angelica A. Lorenzo. Thus,
19 

Furthermore, Lucia religiously paid the realty taxes on the subject lot from 1980 to 1987.While
tax receipts and declarations of ownership for taxation purposes are not, in themselves,
incontrovertible evidence of ownership, they constitute at least proof that the holder has a claim
of title over the property, particularly when accompanied by proof of actual possession. They are
good indicia of the possession in the concept of owner, for no one in his right mind would be
paying taxes for a property that is not in his actual or at least constructive possession. The
voluntary declaration of a piece of property for taxation purposes manifests not only one's
sincere and honest desire to obtain title to the property and announces his adverse claim against
the State and all other interested parties, but also the intention to contribute needed revenues to
the Government. Such an act strengthens one's bona fide claim of acquisition of ownership.

On the other hand, respondent heirs failed to present evidence that Angelica, during her lifetime,
paid the realty taxes on the subject lot. They presented only two tax receipts showing that
Servillano, Sr. belatedly paid taxes due on the subject lot for the years 1980-1981 and part of
year 1982 on September 8, 1989, or about a month after the institution of the complaint on
August 3, 1989, a clear indication that payment was made as an afterthought to give the
semblance of truth to their claim.

Thus, the subsequent acts of the parties belie the intent to be bound by the deed of sale.
[Emphases supplied]

The primary consideration in determining the true nature of a contract is the intention of the
parties. If the words of a contract appear to contravene the evident intention of the parties, the
latter shall prevail. Such intention is determined not only from the express terms of their
agreement, but also from the contemporaneous and subsequent acts of the parties. As 20 

heretofore shown, the contemporaneous and subsequent acts of both parties in this case, point
 to the fact that the intention of Ireneo was just to lend the title to the Spouses Intac to enable
them to borrow money and put up a hospital in Sta. Cruz, Laguna. Clearly, the subject contract
was absolutely simulated and, therefore, void.

In view of the foregoing, the Court finds it hard to believe the claim of the Spouses Intac that the
stay of Ireneo and his family in the subject premises was by their mere tolerance as they were
not yet in need of it. As earlier pointed out, no convincing evidence, written or testimonial, was
ever presented by petitioners regarding this matter. It is also of no moment that TCT No. 106530
covering the subject property was cancelled and a new TCT (TCT No. 242655) was issued in
21 

their names. The Spouses Intac never became the owners of the property despite its registration
in their names. After all, registration does not vest title.

As a logical consequence, petitioners did not become the owners of the subject property even
after a TCT had been issued in their names. After all, registration does not vest title. Certificates
of title merely confirm or record title already existing and vested. They cannot be used to protect
a usurper from the true owner, nor can they be used as a shield for the commission of fraud, or
to permit one to enrich oneself at the expense of others. Hence, reconveyance of the subject
property is warranted. 22

The Court does not find acceptable either the argument of the Spouses Intac that respondents’
action for cancellation of TCT No. 242655 and the reconveyance of the subject property is
already barred by the Statute of Limitations. The reason is that the respondents are still in actual
possession of the subject property. It is a well-settled doctrine that "if the person claiming to be
the owner of the property is in actual possession thereof, the right to seek reconveyance, which
in effect seeks to quiet title to the property, does not prescribe." In Lucia Carlos Aliño, it was also
23 

written:

The lower courts fault Lucia for allegedly not taking concrete steps to recover the subject lot,
demanding its return only after 10 years from the registration of the title. They, however, failed to
consider that Lucia was in actual possession of the property.

It is well-settled that an action for reconveyance prescribes in 10 years, the reckoning point of
which is the date of registration of the deed or the date of issuance of the certificate of title over
the property. In an action for reconveyance, the decree of registration is highly regarded as
incontrovertible. What is sought instead is the transfer of the property or its title, which has been
erroneously or wrongfully registered in another person's name, to its rightful or legal owner or to
one who has a better right.

However, in a number of cases in the past, the Court has consistently ruled that if the person
claiming to he the owner of the property is in actual possession thereof, the right to seek
reconveyance, which in effect seeks to quiet title to the property, does not prescribe. The reason
for this is that one who is in actual possession of a piece of land claiming to be the owner thereof
may wait until his possession is disturbed or his title is attacked before taking steps to vindicate
his right. The reason being, that his undisturbed possession gives him the continuing right to
seek the aid of a court of equity to ascertain the nature of the adverse claim of a third party and
its effect on his title, which right can be claimed only by one who is in possession. Thus,
considering that Lucia continuously possessed the subject lot, her right to institute a suit to clear
the cloud over her title cannot he barred by the statute of limitations.: [Emphases supplied]
24 

WHEREFORE, the petition is DENIED.

a2. Applicability
Valdes v RTC, GR No. 122749, 31 July 1996

G.R. No. 122749 July 31, 1996

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

VITUG, J.:p

The petition for new bewails, purely on the question of law, an alleged error committed by the Regional Trial Court in Civil Case No. Q-
92-12539. 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. Q-92-
12539, Regional Trial Court of Quezon City, Branch 102). After the hearing the parties following
the joinder of issues, the trial court,  in its decision of 29 July 1994, granted the petition, viz:
1

WHEREFORE, judgment is hereby rendered as follows:

(1) The marriage of petitioner Antonio Valdez and respondent Consuelo Gomez-Valdez
is hereby declared null and void under Article 36 of the Family Code on the ground of
their mutual psychological incapacity to comply with their essential marital obligations;

(2) The three older children, Carlos Enrique III, Antonio Quintin and Angela Rosario shall
choose which parent they would want to stay with.

Stella Eloisa and Joaquin Pedro shall be placed in the custody of their mother, herein
respondent Consuelo Gomez-Valdes.

The petitioner and respondent shall have visitation rights over the children who are in the
custody of the other.

(3) The petitioner and the respondent are directed to start proceedings on the liquidation
of their common properties as defined by Article 147 of the Family Code, and to comply
with the provisions of Articles 50, 51, and 52 of the same code, within thirty (30) days
from notice of this decision.

Let a copy of this decision be furnished the Local Civil Registrar of Mandaluyong, Metro
Manila, for proper recording in the registry of marriages.  (Emphasis ours.) 2

Consuelo Gomez sought a clarification of that portion of the decision directing compliance with
Articles 50, 51 and 52 of the Family Code. She asserted that the Family Code contained no
provisions on the procedure for the liquidation of common property in "unions without marriage."
Parenthetically, during the hearing of the motion, the children filed a joint affidavit expressing
their desire to remain with their father, Antonio Valdez, herein petitioner.

In an order, dated 05 May 1995, the trial court made the following clarification:

Consequently, considering that Article 147 of the Family Code explicitly provides that the
property acquired by both parties during their union, in the absence of proof to the
contrary, are presumed to have been obtained through the joint efforts of the parties and
 will be owned by them in equal shares, plaintiff and defendant will own their "family
home" and all their properties for that matter in equal shares.

In the liquidation and partition of properties owned in common by the plaintiff and
defendant, the provisions on ownership found in the Civil Code shall apply.  (Emphasis
3

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:

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;  it provides:
6

Art. 147. When a man and a woman who are capacitated to marry each other, live
exclusively with each other as husband and wife without the benefit of marriage or under
a void marriage, their wages and salaries shall be owned by them in equal shares and
 the property acquired by both of them through their work or industry shall be governed by
the rules on co-ownership.

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

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

When only one of the parties to a void marriage is in good faith, the share of the party in
bad faith in the ownership shall be forfeited in favor of their common children. In case of
default of or waiver by any or all of the common children or their descendants, each
vacant share shall belong to the innocent party. In all cases, the forfeiture shall take
place upon the termination of the cohabitation.

This particular kind of co-ownership applies when a man and a woman, suffering no illegal
impediment to marry each other, so exclusively live together as husband and wife under a void
marriage or without the benefit of marriage. The term "capacitated" in the provision (in the first
paragraph of the law) refers to the legal capacity of a party to contract marriage, i.e., any "male
or female of the age of eighteen years or upwards not under any of the impediments mentioned
in Articles 37 and 38"  of the Code.
7

Under this property regime, property acquired by both spouses through their work and industry
shall be governed by the rules on equal co-ownership. 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."  Unlike the conjugal partnership of gains, the fruits of the couple's separate property
8

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 co-ownership
property, without consent of the other, during the period of cohabitation; and

(b) In the case of a void marriage, any party in bad faith shall forfeit his or her share in the co-
ownership in favor of their common children; in default thereof or waiver by any or all of the
common children, each vacant share shall belong to the respective surviving descendants, or still
in default thereof, to the innocent party. The forfeiture shall take place upon the termination of the
cohabitation  or declaration of nullity of the marriage. 
9 10

When the common-law spouses suffer from a legal impediment to marry or when they do not live
exclusively with each other (as husband and wife), only the property acquired by both of them
through their actual joint contribution of money, property or industry shall be owned in common
and in proportion to their respective contributions. Such contributions and corresponding shares,
however, are prima facie presumed to be equal. The share of any party who is married to
another shall accrue to the absolute community or conjugal partnership, as the case may be, if
so existing under a valid marriage. If the party who has acted in bad faith is not validly married to
another, his or her share shall be forfeited in the manner already heretofore expressed.  11
 In deciding to take further cognizance of the issue on the settlement of the parties' common
property, the trial court acted neither imprudently nor precipitately; a court which has jurisdiction
to declare the marriage a nullity must be deemed likewise clothed in authority to resolve
incidental and consequential matters. Nor did it commit a reversible error in ruling that petitioner
and private respondent own the "family home" and all their common property in equal shares, as
well as in concluding that, in the liquidation and partition of the property owned in common by
them, the provisions on co-ownership under the Civil Code, not Articles 50, 51 and 52, in relation
to Articles 102 and 129,   of the Family Code, should aptly prevail. The rules set up to govern the
12

liquidation of either the absolute community or the conjugal partnership of gains, the property
regimes recognized for valid and voidable marriages (in the latter case until the contract is
annulled), are irrelevant to the liquidation of the co-ownership that exists between common-law
spouses. The first paragraph of Articles 50 of the Family Code, applying paragraphs (2), (3), (4)
and 95) of Article 43,   relates only, by its explicit terms, to voidable marriages and,
13

exceptionally, to void marriages under Article 40   of the Code, i.e., the declaration of nullity of a
14

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   and 42,   of the Family Code, on the
15 16

effects of the termination of a subsequent marriage contracted during the subsistence of a

previous marriage to be made applicable pro hac vice. In all other cases, it is not to be assumed
that the law has also meant to have coincident property relations, on the one hand, between
spouses in valid and voidable marriages (before annulment) and, on the other, between
common-law spouses or spouses of void marriages, leaving to ordain, on the latter case, the
ordinary rules on co-ownership subject to the provisions of the Family Code on the "family
home," i.e., the provisions found in Title V, Chapter 2, of the Family Code, remain in force and
effect regardless of the property regime of the spouses.

WHEREFORE, the questioned orders, dated 05 May 1995 and 30 October 1995, of the trial court
are AFFIRMED. No costs.

Buenaventura vs CA, supra

Dino vs Dino, GR No. 178044, January 19, 2011

G.R. No. 178044               January 19, 2011

ALAIN M. DIÑO , Petitioner,

vs.
MA. CARIDAD L. DIÑO, Respondent.

DECISION

CARPIO, J.:

The Case

Before the Court is a petition for review1 assailing the 18 October 2006 Decision2 and the 12
March 2007 Order3 of the Regional Trial Court of Las Piñas City, Branch 254 (trial court) in Civil
Case No. LP-01-0149.

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

On 30 April 2002, the Office of the Las Piñas prosecutor found that there were no indicative facts
of collusion between the parties and the case was set for trial on the merits.

Dr. Nedy L. Tayag (Dr. Tayag), a clinical psychologist, submitted a psychological report
establishing that respondent was suffering from Narcissistic Personality Disorder which was
deeply ingrained in her system since her early formative years. Dr. Tayag found that
respondent’s disorder was long-lasting and by nature, incurable.

In its 18 October 2006 Decision, the trial court granted the petition on the ground that respondent
was psychologically incapacited to comply with the essential marital obligations at the time of the
celebration of the marriage.

The Decision of the Trial Court

The trial court ruled that based on the evidence presented, petitioner was able to establish
respondent’s psychological incapacity. The trial court ruled that even without Dr. Tayag’s
psychological report, the allegations in the complaint, substantiated in the witness stand, clearly
made out a case of psychological incapacity against respondent. The trial court found that
respondent committed acts which hurt and embarrassed petitioner and the rest of the family, and
that respondent failed to observe mutual love, respect and fidelity required of her under Article 68
of the Family Code. The trial court also ruled that respondent abandoned petitioner when she
obtained a divorce abroad and married another man.

The dispositive portion of the trial court’s decision reads:

WHEREFORE, in view of the foregoing, judgment is hereby rendered:

1. Declaring the marriage between plaintiff ALAIN M. DIÑO and defendant MA.
CARIDAD L. DIÑO on January 14, 1998, and all its effects under the law, as NULL and
VOID from the beginning; and

2. Dissolving the regime of absolute community of property.

A DECREE OF ABSOLUTE NULLITY OF MARRIAGE shall only be issued upon compliance with
Article[s] 50 and 51 of the Family Code.
Let copies of this Decision be furnished the parties, the Office of the Solicitor General, Office of
the City Prosecutor, Las Piñas City and the Office of the Local Civil Registrar of Las Piñas City,
for their information and guidance.

SO ORDERED.4

Petitioner filed a motion for partial reconsideration questioning the dissolution of the absolute
community of property and the ruling that the decree of annulment shall only be issued upon
compliance with Articles 50 and 51 of the Family Code.

In its 12 March 2007 Order, the trial court partially granted the motion and modified its 18
October 2006 Decision as follows:

WHEREFORE, in view of the foregoing, judgment is hereby rendered:

1) Declaring the marriage between plaintiff ALAIN M. DIÑO and defendant MA.
CARIDAD L. DIÑO on January 14, 1998, and all its effects under the law, as NULL and
VOID from the beginning; and

2) Dissolving the regime of absolute community of property.

A DECREE OF ABSOLUTE NULLITY OF MARRIAGE shall be issued after liquidation, partition

and distribution of the parties’ properties under Article 147 of the Family Code.

Let copies of this Order be furnished the parties, the Office of the Solicitor General, the Office of
the City Prosecutor of Las Piñas 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 Marriages 6 (the Rule) does not
apply to Article 147 of the Family Code.

We agree with petitioner.

The Court has ruled in Valdes v. RTC, Branch 102, Quezon City that in a void marriage,
regardless of its cause, the property relations of the parties during the period of cohabitation is
governed either by Article 147 or Article 148 of the Family Code. 7 Article 147 of the Family Code
applies to union of parties who are legally capacitated and not barred by any impediment to
contract marriage, but whose marriage is nonetheless void, 8 such as petitioner and respondent in
the case before the Court.
Article 147 of the Family Code provides:

Article 147. When a man and a woman who are capacitated to marry each other, live exclusively
with each other as husband and wife without the benefit of marriage or under a void marriage,
their wages and salaries shall be owned by them in equal shares and the property acquired by
both of them through their work or industry shall be governed by the rules on co-ownership.

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

For Article 147 of the Family Code to apply, the following elements must be present:

1. The man and the woman must be capacitated to marry each other;

2. They live exclusively with each other as husband and wife; and

3. Their union is without the benefit of marriage, or their marriage is void.9

All these elements are present in this case and there is no question that Article 147 of the Family
Code applies to the property relations between petitioner and respondent.

We agree with petitioner that the trial court erred in ordering that a decree of absolute nullity of
marriage shall be issued only after liquidation, partition and distribution of the parties’ properties
under Article 147 of the Family Code. The ruling has no basis because Section 19(1) of the Rule
does not apply to cases governed under Articles 147 and 148 of the Family Code. Section 19(1)
of the Rule provides:

Sec. 19. Decision. - (1) If the court renders a decision granting the petition, it shall declare therein
that the decree of absolute nullity or decree of annulment shall be issued by the court only after
compliance with Articles 50 and 51 of the Family Code as implemented under the Rule on
Liquidation, Partition and Distribution of Properties.

The pertinent provisions of the Family Code cited in Section 19(1) of the Rule are:

Article 50. The effects provided for in paragraphs (2), (3), (4) and (5) of Article 43 and in Article
44 shall also apply in proper cases to marriages which are declared void ab initio or annulled by
final judgment under Articles 40 and 45.10

The final judgment in such cases shall provide for the liquidation, partition and distribution of the
properties of the spouses, the custody and support of the common children, and the delivery of
their presumptive legitimes, unless such matters had been adjudicated in previous judicial
proceedings.

All creditors of the spouses as well as of the absolute community of the conjugal partnership
shall be notified of the proceedings for liquidation.

In the partition, the conjugal dwelling and the lot on which it is situated, shall be adjudicated in
accordance with the provisions of Articles 102 and 129.

Article 51. In said partition, the value of the presumptive legitimes of all common children,
computed as of the date of the final judgment of the trial court, shall be delivered in cash,
property or sound securities, unless the parties, by mutual agreement judicially approved, had
already provided for such matters.

The children of their guardian, or the trustee of their property, may ask for the enforcement of the
judgment.

The delivery of the presumptive legitimes herein prescribed shall in no way prejudice the ultimate
successional rights of the children accruing upon the death of either or both of the parents; but
the value of the properties already received under the decree of annulment or absolute nullity
shall be considered as advances on their legitime.

It is clear from Article 50 of the Family Code that Section 19(1) of the Rule applies only to
marriages which are declared void ab initio or annulled by final judgment under Articles 40 and
45 of the Family Code. In short, Article 50 of the Family Code does not apply to marriages
which are declared void ab initio under Article 36 of the Family Code, which should be declared
void without waiting for the liquidation of the properties of the parties.

Article 40 of the Family Code contemplates a situation where a second or bigamous marriage
was contracted.  Under Article 40, "[t]he absolute nullity of a previous marriage may be invoked
1avvphil

for purposes of remarriage on the basis solely of a final judgment declaring such previous
marriage void." Thus we ruled:

x x x where the absolute nullity of a previous marriage is sought to be invoked for purposes of
contracting a second marriage, the sole basis acceptable in law, for said projected marriage to
be free from legal infirmity, is a final judgment declaring a previous marriage void. 11

Article 45 of the Family Code, on the other hand, refers to voidable marriages, meaning,
marriages which are valid until they are set aside by final judgment of a competent court in an
action for annulment.12 In both instances under Articles 40 and 45, the marriages are governed
either by absolute community of property 13 or conjugal partnership of gains14 unless the parties
agree to a complete separation of property in a marriage settlement entered into before the
marriage. Since the property relations of the parties is governed by absolute community of
property or conjugal partnership of gains, there is a need to liquidate, partition and distribute the
properties before a decree of annulment could be issued. That is not the case for annulment of
marriage under Article 36 of the Family Code because the marriage is governed by the ordinary
rules on co-ownership.

In this case, petitioner’s marriage to respondent was declared void under Article 36 15 of the
Family Code and not under Article 40 or 45. Thus, what governs the liquidation of properties
owned in common by petitioner and respondent are the rules on co-ownership. In Valdes, the
Court ruled that the property relations of parties in a void marriage during the period of
cohabitation is governed either by Article 147 or Article 148 of the Family Code. 16 The rules on
co-ownership apply and the properties of the spouses should be liquidated in accordance with
the Civil Code provisions on co-ownership. Under Article 496 of the Civil Code, "[p]artition may
be made by agreement between the parties or by judicial proceedings. x x x." It is not necessary
 to liquidate the properties of the spouses in the same proceeding for declaration of nullity of
marriage.

WHEREFORE, we AFFIRM the Decision of the trial court with the MODIFICATION that the

decree of absolute nullity of the marriage shall be issued upon finality of the trial court’s decision
without waiting for the liquidation, partition, and distribution of the parties’ properties under Article
147 of the Family Code.

SO ORDERED.

b. Alien spouse
Muller vs Muller, GR No. 149615, 29 Aug 2006

G.R. No. 149615 August 29, 2006

IN RE: PETITION FOR SEPARATION OF PROPERTY ELENA BUENAVENTURA

MULLER, Petitioner,
vs.
HELMUT MULLER, Respondent.

DECISION

YNARES-SANTIAGO, J.:

This petition for review on certiorari 1 assails the February 26, 2001 Decision 2 of the Court of
Appeals in CA-G.R. CV No. 59321 affirming with modification the August 12, 1996 Decision 3 of
the Regional Trial Court of Quezon City, Branch 86 in Civil Case No. Q-94-21862, which
terminated the regime of absolute community of property between petitioner and respondent, as
well as the Resolution 4 dated August 13, 2001 denying the motion for reconsideration.

The facts are as follows:

Petitioner Elena Buenaventura Muller and respondent Helmut Muller were married in Hamburg,
Germany on September 22, 1989. The couple resided in Germany at a house owned by
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

xxxx

As regards the property covered by Transfer Certificate of Title No. 219438 of the Registry of
Deeds of Marikina, Metro Manila, situated in Antipolo, Rizal and the improvements thereon, the
Court shall not make any pronouncement on constitutional grounds. 7

Respondent appealed to the Court of Appeals which rendered the assailed decision modifying
the trial 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 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:

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

xxxx

If the term "private agricultural lands" is to be construed as not including residential lots or lands
not strictly agricultural, the result would be that "aliens may freely acquire and possess not only
residential lots and houses for themselves but entire subdivisions, and whole towns and cities,"
and that "they may validly buy and hold in their names lands of any area for building homes,
factories, industrial plants, fisheries, hatcheries, schools, health and vacation resorts, markets,
golf courses, playgrounds, airfields, and a host of other uses and purposes that are not, in
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 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 CA-G.R. CV No. 59321 ordering petitioner Elena
Buenaventura Muller to reimburse respondent Helmut Muller the amount of P528,000 for the
acquisition of the land and the amount of P2,300,000 for the construction of the house in Antipolo
City, and the Resolution dated August 13, 2001 denying reconsideration thereof, are
REVERSED and SET ASIDE. The August 12, 1996 Decision of the Regional Trial Court of
Quezon City, Branch 86 in Civil Case No. Q-94-21862 terminating the regime of absolute
community between the petitioner and respondent, decreeing a separation of property between
them and ordering the partition of the personal properties located in the Philippines equally, is
REINSTATED.

SO ORDERED.

c. “For the benefit”

Ayala Investment v CA, GR No. 118305, 12 feb 1998

G.R. No. 118305 February 12, 1998

AYALA INVESTMENT & DEVELOPMENT CORP. and ABELARDO MAGSAJO, petitioners,

vs.
COURT OF APPEALS and SPOUSES ALFREDO & ENCARNACION CHING, respondents.

MARTINEZ, J.:

Under Article 161 of the Civil Code, what debts and obligations contracted by the husband alone
are considered "for the benefit of the conjugal partnership" which are chargeable against the
conjugal partnership? Is a surety agreement or an accommodation contract entered into by the
husband in favor of his employer within the contemplation of the said provision?

These are the issues which we will resolve in this petition for review.

The petitioner assails the decision dated April 14, 1994 of the respondent Court of Appeals in
"Spouses Alfredo and Encarnacion Ching vs. Ayala Investment and Development Corporation,
et. al.," docketed as CA-G.R. CV No. 29632,  upholding the decision of the Regional Trial Court
1

of Pasig, Branch 168, which ruled that the conjugal partnership of gains of respondents-spouses
Alfredo and Encarnacion Ching is not liable for the payment of the debts secured by respondent-
husband Alfredo Ching.

A chronology of the essential antecedent facts is necessary for a clear understanding of the case
at bar.

Philippine Blooming Mills (hereinafter referred to as PBM) obtained a P50,300,000.00 loan from
petitioner Ayala Investment and Development Corporation (hereinafter referred to as AIDC). As
added security for the credit line extended to PBM, respondent Alfredo Ching, Executive Vice
President of PBM, executed security agreements on December 10, 1980 and on March 20, 1981
making himself jointly and severally answerable with PBM's indebtedness to AIDC.

PBM failed to pay the loan. Thus, on July 30, 1981, AIDC filed a case for sum of money against
PBM and respondent-husband Alfredo Ching with the then Court of First Instance of Rizal
(Pasig), Branch VIII, entitled "Ayala Investment and Development Corporation vs. Philippine
Blooming Mills and Alfredo Ching," docketed as Civil Case No. 42228.

After trial, the court rendered judgment ordering PBM and respondent-husband Alfredo Ching to
jointly and severally pay AIDC the principal amount of P50,300,000.00 with interests.

Pending appeal of the judgment in Civil Case No. 42228, upon motion of AIDC, the lower court
issued a writ of execution pending appeal. Upon AIDC's putting up of an P8,000,000.00 bond, a
writ of execution dated May 12, 1982 was issued. Thereafter, petitioner Abelardo Magsajo, Sr.,
Deputy Sheriff of Rizal and appointed sheriff in Civil Case No. 42228, caused the issuance and
service upon respondents-spouses of a notice of sheriff sale dated May 20, 1982 on three (3) of
their conjugal properties. Petitioner Magsajo then scheduled the auction sale of the properties
levied.

On June 9, 1982, private respondents filed a case of injunction against petitioners with the then
Court of First Instance of Rizal (Pasig), Branch XIII, to enjoin the auction sale alleging that
petitioners cannot enforce the judgment against the conjugal partnership levied on the ground
that, among others, the subject loan did not redound to the benefit of the said conjugal
partnership.   Upon application of private respondents, the lower court issued a temporary
2

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,  questioning the order of the lower
3

court enjoining the sale. Respondent Court of Appeals issued a Temporary Restraining Order on
June 25, 1982, enjoining the lower court  from enforcing its Order of June 14, 1982, thus paving
4

the way for the scheduled auction sale of respondents-spouses conjugal properties.

On June 25, 1982, the auction sale took place. AIDC being the only bidder, was issued a
Certificate of Sale by petitioner Magsajo, which was registered on July 2, 1982. Upon expiration
of the redemption period, petitioner sheriff issued the final deed of sale on August 4, 1982 which
was registered on August 9, 1983.

In the meantime, the respondent court, on August 4, 1982, decided CA-G.R. SP No. 14404, in
this manner:

WHEREFORE, the petition for certiorari in this case is granted and the

challenged order of the respondent Judge dated June 14, 1982 in Civil Case No.
46309 is hereby set aside and nullified. The same petition insofar as it seeks to
enjoin the respondent Judge from proceeding with Civil Case No. 46309 is,
however, denied. No pronouncement is here made as to costs. . . .  5

On September 3, 1983, AIDC filed a motion to dismiss the petition for injunction filed before
Branch XIII of the CFI of Rizal (Pasig) on the ground that the same had become moot and
academic with the consummation of the sale. Respondents filed their opposition to the motion
arguing, among others, that where a third party who claim is ownership of the property attached
or levied upon, a different legal situation is presented; and that in this case, two (2) of the real
properties are actually in the name of Encarnacion Ching, a non-party to Civil Case No. 42228.

The lower court denied the motion to dismiss. Hence, trial on the merits proceeded. Private
respondents presented several witnesses. On the other hand, petitioners did not present any
evidence.

On September 18, 1991, the trial court promulgated its decision declaring the sale on execution
null and void. Petitioners appealed to the respondent court, which was docketed as CA-G.R. CV
No. 29632.
On April 14, 1994, the respondent court promulgated the assailed decision, affirming the decision
of the regional trial court. It held that:

The loan procured from respondent-appellant AIDC was for the advancement
and benefit of Philippine Blooming Mills and not for the benefit of the conjugal
partnership of petitioners-appellees.

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 Code-suffice it to say that the two provisions are substantially
the same. Nevertheless, We agree with the trial court that the Family Code is the
applicable law on the matter . . . . . . .

Article 121 of the Family Code provides that "The conjugal partnership shall be
liable for: . . . (2) All debts and obligations contracted during the marriage by the
designated Administrator-Spouse for the benefit of the conjugal partnership of
gains . . . ." The burden of proof that the debt was contracted for the benefit of the
conjugal partnership of gains, lies with the creditor-party litigant claiming as such.
In the case at bar, respondent-appellant AIDC failed to prove that the debt was
contracted by appellee-husband, for the benefit of the conjugal partnership of
gains.

The dispositive portion of the decision reads:

WHEREFORE, in view of all the foregoing, judgment is hereby rendered

DISMISSING the appeal. The decision of the Regional Trial Court is
AFFIRMED in toto. 6

Petitioner filed a Motion for Reconsideration which was denied by the respondent court in a
Resolution dated November 28, 1994. 7

Hence, this petition for review. Petitioner contends that the "respondent court erred in ruling that
the conjugal partnership of private respondents is not liable for the obligation by the respondent-
husband."

Specifically, the errors allegedly committed by the respondent court are as follows:

I. RESPONDENT COURT ERRED IN RULING THAT THE

OBLIGATION INCURRED RESPONDENT HUSBAND DID NOT
REDOUND TO THE BENEFIT OF THE CONJUGAL
PARTNERSHIP OF THE PRIVATE RESPONDENT.

II. RESPONDENT COURT ERRED IN RULING THAT THE ACT

OF RESPONDENT HUSBAND IN SECURING THE SUBJECT
LOAN IS NOT PART OF HIS INDUSTRY, BUSINESS OR
CAREER FROM WHICH HE SUPPORTS HIS FAMILY.

Petitioners in their appeal point out that there is no need to prove that actual benefit redounded
to the benefit of the partnership; all that is necessary, they say, is that the transaction was
entered into for the benefit of the conjugal partnership. Thus, petitioners aver that:

The wordings of Article 161 of the Civil Code is very clear: for the partnership to
be held liable, the husband must have contracted the debt "for the benefit of the
partnership, thus:
 Art. 161. The conjugal partnership shall be liable for:

1) all debts and obligations contracted by the

husband for the benefit of the conjugal partnership
....

There is a difference between the phrases: "redounded to the benefit of" or

"benefited from" (on the one hand) and "for the benefit of (on the other). The
former require that actual benefit must have been realized; the latter requires only
that the transaction should be one which normally would produce benefit to the
partnership, regardless of whether or not actual benefit accrued. 8

We do not agree with petitioners that there is a difference between the terms "redounded to the
benefit of" or "benefited from" on the one hand; and "for the benefit of" on the other. They mean
one and the same thing. Article 161 (1) of the Civil Code and Article 121 (2) of the Family Code
are similarly worded, i.e., both use the term "for the benefit of." On the other hand, Article 122 of
the Family Code provides that "The payment of personal debts by the husband or the wife before
or during the marriage shall not be charged to the conjugal partnership except insofar as they
redounded to the benefit of the family." As can be seen, the terms are used interchangeably.

Petitioners further contend that the ruling of the respondent court runs counter to the
pronouncement of this Court in the case of Cobb-Perez vs. Lantin,  that the husband as head of
9

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,   Abella de Diaz vs. Erlanger & Galinger, Inc.,   Cobb-Perez
10 11

vs. Lantin   and G-Tractors, Inc. vs. Court of Appeals,   cited by the petitioners, we held that:

12 13

The debts contracted by the husband during the marriage relation, for and in the
exercise of the industry or profession by which he contributes toward the support
of his family, are not his personal and private debts, and the products or income
from the wife's own property, which, like those of her husband's, are liable for the
payment of the marriage expenses, cannot be excepted from the payment of
such debts. (Javier)

The husband, as the manager of the partnership (Article 1412, Civil Code), has a
right to embark the partnership in an ordinary commercial enterprise for gain, and
the fact that the wife may not approve of a venture does not make it a private and
personal one of the husband. (Abella de Diaz)

Debts contracted by the husband for and in the exercise of the industry or
profession by which he contributes to the support of the family, cannot be
deemed to be his exclusive and private debts. (Cobb-Perez).

. . . if he incurs an indebtedness in the legitimate pursuit of his career or

profession or suffers losses in a legitimate business, the conjugal partnership
must equally bear the indebtedness and the losses, unless he deliberately acted
to the prejudice of his family. (G-Tractors)
However, in the cases of Ansaldo vs. Sheriff of Manila, Fidelity Insurance & Luzon Insurance
Co.,  Liberty Insurance Corporation vs. Banuelos,   and Luzon Surety Inc. vs. De Garcia,   cited
14 15 16

by the respondents, we ruled that:

The fruits of the paraphernal property which form part of the assets of the
conjugal partnership, are subject to the payment of the debts and expenses of
the spouses, but not to the payment of the personal obligations (guaranty
agreements) of the husband, unless it be proved that such obligations were
productive of some benefit to the family." (Ansaldo; parenthetical phrase ours.)

When there is no showing that the execution of an indemnity agreement by the

husband redounded to the benefit of his family, the undertaking is not a conjugal
debt but an obligation personal to him. (Liberty Insurance)

In the most categorical language, a conjugal partnership under Article 161 of the
new Civil Code is liable only for such "debts and obligations contracted by the
husband for the benefit of the conjugal partnership." There must be the requisite
showing then of some advantage which clearly accrued to the welfare of the
spouses. Certainly, to make a conjugal partnership respond for a liability that
should appertain to the husband alone is to defeat and frustrate the avowed
objective of the new Civil Code to show the utmost concern for the solidarity and
well-being of the family as a unit. The husband, therefore, is denied the power to
assume unnecessary and unwarranted risks to the financial stability of the
conjugal partnership. (Luzon Surety, Inc.)

From the foregoing jurisprudential rulings of this Court, we can derive the following conclusions:

(A) If the husband himself is the principal obligor in the contract, i.e., he directly received the
money and services to be used in or for his own business or his own profession, that contract
falls within the term . . . . obligations for the benefit of the conjugal partnership." Here, no actual
benefit may be proved. It is enough that the benefit to the family is apparent at the time of the
signing of the contract. From the very nature of the contract of loan or services, the family stands
to benefit from the loan facility or services to be rendered to the business or profession of the
husband. It is immaterial, if in the end, his business or profession fails or does not succeed.
Simply stated, where the husband contracts obligations on behalf of the family business, the law
presumes, and rightly so, that such obligation will redound to the benefit of the conjugal
partnership.

(B) On the other hand, if the money or services are given to another person or entity, and the
husband acted only as a surety or guarantor, that contract cannot, by itself, alone be categorized
as falling within the context of "obligations for the benefit of the conjugal partnership." The
contract of loan or services is clearly for the benefit of the principal debtor and not for the surety
or his family. No presumption can be inferred that, when a husband enters into a contract of
surety or accommodation agreement, it is "for the benefit of the conjugal partnership." Proof must
be presented to establish benefit redounding to the conjugal partnership.

Thus, the distinction between the Cobb-Perez case, and we add, that of the three other
companion cases, on the one hand, and that of Ansaldo, Liberty Insurance and Luzon Surety, is
that in the former, the husband contracted the obligation for his own business; while in the latter,
the husband merely acted as a surety for the loan contracted by another for the latter's business.

The evidence of petitioner indubitably show that co-respondent Alfredo Ching signed as surety
for the P50M loan contracted on behalf of PBM. petitioner should have adduced evidence to
prove that Alfredo Ching's acting as surety redounded to the benefit of the conjugal partnership.
The reason for this is as lucidly explained by the respondent court:
 The loan procured from respondent-appellant AIDC was for the advancement
and benefit of Philippine Blooming Mills and not for the benefit of the conjugal
partnership of petitioners-appellees. Philippine Blooming Mills has a personality
distinct and separate from the family of petitioners-appellees — this despite the
fact that the members of the said family happened to be stockholders of said
corporate entity.

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 creditor-party litigant claiming as such.
In the case at bar, respondent-appellant AIDC failed to prove that the debt was
contracted by appellee-husband, for the benefit of the conjugal partnership of
gains. What is apparent from the facts of the case is that the judgment debt was
contracted by or in the name of the Corporation Philippine Blooming Mills and
appellee-husband only signed as surety thereof. The debt is clearly a corporate
debt and respondent-appellant's right of recourse against appellee-husband as
surety is only to the extent of his corporate stockholdings. It does not extend to
the conjugal partnership of gains of the family of petitioners-appellees. . . . . . .
17

Petitioners contend that no actual benefit need accrue to the conjugal partnership. To support
this contention, they cite Justice J.B.L. Reyes' authoritative opinion in the Luzon Surety Company
case:

I concur in the result, but would like to make of record that, in my opinion, the
words "all debts and obligations contracted by the husband for the benefit of the
conjugal partnership" used in Article 161 of the Civil Code of the Philippines in
describing the charges and obligations for which the conjugal partnership is liable
do not require that actual profit or benefit must accrue to the conjugal partnership
from the husband's transaction; but it suffices that the transaction should be one
that normally would produce such benefit for the partnership. This is the ratio
behind our ruling in Javier vs. 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 G-Tractors, Inc., the husband was also the principal obligor
— not merely the surety. This latter case, therefore, did not create any precedent. It did not also
supersede the Luzon Surety Company case, nor any of the previous accommodation contract
cases, where this Court ruled that they were for the benefit of third parties.

But it could be argued, as the petitioner suggests, that even in such kind of contract of
accommodation, a benefit for the family may also result, when the guarantee is in favor of the
husband's employer.

In the case at bar, petitioner claims that the benefits the respondent family would reasonably
anticipate were the following:

(a) The employment of co-respondent Alfredo Ching would be

prolonged and he would be entitled to his monthly salary of
 P20,000.00 for an extended length of time because of the loan he
guaranteed;

(b) The shares of stock of the members of his family would

appreciate if the PBM could be rehabilitated through the loan
obtained;

(c) His prestige in the corporation would be enhanced and his

career would be boosted should PBM survive because of the
loan.

However, these are not the benefits contemplated by Article 161 of the Civil Code. The benefits
must be one directly resulting from the loan. It cannot merely be a by-product or a spin-off of the
loan itself.

In all our decisions involving accommodation contracts of the husband,   we underscored the
18

requirement that: "there must be the requisite showing . . . of some advantage which clearly
accrued to the welfare of the spouses" or "benefits to his family" or "that such obligations are
productive of some benefit to the family." Unfortunately, the petition did not present any proof to
show: (a) Whether or not the corporate existence of PBM was prolonged and for how many
months or years; and/or (b) Whether or not the PBM was saved by the loan and its shares of
stock appreciated, if so, how much and how substantial was the holdings of the Ching family.

Such benefits (prospects of longer employment and probable increase in the value of stocks)
might have been already apparent or could be anticipated at the time the accommodation
agreement was entered into. But would those "benefits" qualify the transaction as one of the
"obligations . . . for the benefit of the conjugal partnership"? Are indirect and remote probable
benefits, the ones referred to in Article 161 of the Civil Code? The Court of Appeals in denying
the motion for reconsideration, disposed of these questions in the following manner:

No matter how one looks at it, the debt/credit respondents-appellants is purely a

corporate debt granted to PBM, with petitioner-appellee-husband merely signing
as surety. While such petitioner-appellee-husband, as such surety, is solidarily
liable with the principal debtor AIDC, such liability under the Civil Code provisions
is specifically restricted by Article 122 (par. 1) of the Family Code, so that debts
for which the husband is liable may not be charged against conjugal partnership
properties. Article 122 of the Family Code is explicit — "The payment of personal
debts contracted by the husband or the wife before or during the marriage shall
not be charged to the conjugal partnership except insofar as they redounded to
the benefit of the family.

Respondents-appellants insist that the corporate debt in question falls under the
exception laid down in said Article 122 (par. one). We do not agree. The loan
procured from respondent-appellant AIDC was for the sole advancement and
benefit of Philippine Blooming Mills and not for the benefit of the conjugal
partnership of petitioners-appellees.

. . . appellee-husband derives salaries, dividends benefits from Philippine

Blooming Mills (the debtor corporation), only because said husband is an
employee of said PBM. These salaries and benefits, are not the "benefits"
contemplated by Articles 121 and 122 of the Family Code. The "benefits"
contemplated by the exception in Article 122 (Family Code) is that benefit derived
directly from the use of the loan. In the case at bar, the loan is a corporate loan
extended to PBM and used by PBM itself, not by petitioner-appellee-husband or
his family. The alleged benefit, if any, continuously harped by respondents-
appellants, 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.   Thus, when co-respondent Alfredo Ching entered into a surety agreement he, from
21

then on, definitely put in peril the conjugal property (in this case, including the family home) and
placed it in danger of being taken gratuitously as in cases of donation.

In the second assignment of error, the petitioner advances the view that acting as surety is part
of the business or profession of the respondent-husband.

This theory is new as it is novel.

The respondent court correctly observed that:

Signing as a surety is certainly not an exercise of an industry or profession,

hence the cited cases of Cobb-Perez vs. Lantin; Abella de Diaz vs. Erlanger &
Galinger; 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.

WHEREFORE, the petition for review should be, as it is hereby, DENIED for lack of merit.

SO ORDERED.

d. Net profit
Quiao vs Quiao, GR No. 176556, July 4, 2012

G.R. No 176556               July 4, 2012

BRIGIDO B. QUIAO, Petitioner,
vs.
RITA C. QUIAO, KITCHIE C. QUIAO, LOTIS C. QUIAO, PETCHIE C. QUIAO, represented by
their mother RITA QUIAO, Respondents.

DECISION

REYES, J.:

The family is the basic and the most important institution of society. It is in the family where
children are born and molded either to become useful citizens of the country or troublemakers in
the community. Thus, we are saddened when parents have to separate and fight over properties,
without regard to the message they send to their children. Notwithstanding this, we must not
shirk from our obligation to rule on this case involving legal separation escalating to questions on
dissolution and partition of properties.

The Case

This case comes before us via Petition for Review on Certiorari under Rule 45 of the Rules of
1 

Court. The petitioner seeks that we vacate and set aside the Order dated January 8, 2007 of the
2 

Regional Trial Court (RTC), Branch 1, Butuan City. In lieu of the said order, we are asked to
issue a Resolution defining the net profits subject of the forfeiture as a result of the decree of
legal separation in accordance with the provision of Article 102(4) of the Family Code, or
alternatively, in accordance with the provisions of Article 176 of the Civil Code.

Antecedent Facts

On October 26, 2000, herein respondent Rita C. Quiao (Rita) filed a complaint for legal
separation against herein petitioner Brigido B. Quiao (Brigido). Subsequently, the RTC rendered
3 

a Decision dated October 10, 2005, the dispositive portion of which provides:
4 

WHEREFORE, viewed from the foregoing considerations, judgment is hereby rendered declaring
the legal separation of plaintiff Rita C. Quiao and defendant-respondent Brigido B. Quiao
pursuant to Article 55.

As such, the herein parties shall be entitled to live separately from each other, but the marriage
bond shall not be severed.
Except for Letecia C. Quiao who is of legal age, the three minor children, namely, Kitchie, Lotis
and Petchie, all surnamed Quiao shall remain under the custody of the plaintiff who is the
innocent spouse.

Further, except for the personal and real properties already foreclosed by the RCBC, all the
remaining properties, namely:

1. coffee mill in Balongagan, Las Nieves, Agusan del Norte;

2. coffee mill in Durian, Las Nieves, Agusan del Norte;

3. corn mill in Casiklan, Las Nieves, Agusan del Norte;

4. coffee mill in Esperanza, Agusan del Sur;

5. a parcel of land with an area of 1,200 square meters located in Tungao, Butuan City;

6. a parcel of agricultural land with an area of 5 hectares located in Manila de Bugabos,

Butuan City;

7. a parcel of land with an area of 84 square meters located in Tungao, Butuan City;

8. Bashier Bon Factory located in Tungao, Butuan City;

shall be divided equally between herein [respondents] and [petitioner] subject to the respective
legitimes of the children and the payment of the unpaid conjugal liabilities of [₱]45,740.00.

[Petitioner’s] share, however, of the net profits earned by the conjugal partnership is forfeited in
favor of the common children.

He is further ordered to reimburse [respondents] the sum of [₱]19,000.00 as attorney's fees and
litigation expenses of [₱]5,000.00[.]

SO ORDERED. 5

Neither party filed a motion for reconsideration and appeal within the period provided for under
Section 17(a) and (b) of the Rule on Legal Separation. 6

On December 12, 2005, the respondents filed a motion for execution which the trial court granted
7 

in its Order dated December 16, 2005, the dispositive portion of which reads:

"Wherefore, finding the motion to be well taken, the same is hereby granted. Let a writ of
execution be issued for the immediate enforcement of the Judgment.

SO ORDERED." 8

Subsequently, on February 10, 2006, the RTC issued a Writ of Execution which reads as follows:
9 

NOW THEREFORE, that of the goods and chattels of the [petitioner] BRIGIDO B. QUIAO you
cause to be made the sums stated in the afore-quoted DECISION [sic], together with your lawful
fees in the service of this Writ, all in the Philippine Currency.

But if sufficient personal property cannot be found whereof to satisfy this execution and your
lawful fees, then we command you that of the lands and buildings of the said [petitioner], you
make the said sums in the manner required by law. You are enjoined to strictly observed Section
9, Rule 39, Rule [sic] of the 1997 Rules of Civil Procedure.

You are hereby ordered to make a return of the said proceedings immediately after the judgment
has been satisfied in part or in full in consonance with Section 14, Rule 39 of the 1997 Rules of
Civil Procedure, as amended. 10

On July 6, 2006, the writ was partially executed with the petitioner paying the respondents the
amount of ₱46,870.00, representing the following payments:

(a) ₱22,870.00 – as petitioner's share of the payment of the conjugal share;

(b) ₱19,000.00 – as attorney's fees; and

(c) ₱5,000.00 – as litigation expenses. 11

On July 7, 2006, or after more than nine months from the promulgation of the Decision, the
petitioner filed before the RTC a Motion for Clarification, asking the RTC to define the term "Net
12 

Profits Earned."

To resolve the petitioner's Motion for Clarification, the RTC issued an Order dated August 31,
13 

2006, which held that the phrase "NET PROFIT EARNED" denotes "the remainder of the
properties of the parties after deducting the separate properties of each [of the] spouse and the
debts." The Order further held that after determining the remainder of the properties, it shall be
14 

forfeited in favor of the common children because the offending spouse does not have any right
to any share of the net profits earned, pursuant to Articles 63, No. (2) and 43, No. (2) of the
Family Code. The dispositive portion of the Order states:
15 

WHEREFORE, there is no blatant disparity when the sheriff intends to forfeit all the remaining
properties after deducting the payments of the debts for only separate properties of the
defendant-respondent shall be delivered to him which he has none.

The Sheriff is herein directed to proceed with the execution of the Decision.

IT IS SO ORDERED. 16

Not satisfied with the trial court's Order, the petitioner filed a Motion for Reconsideration on
17 

September 8, 2006. Consequently, the RTC issued another Order dated November 8, 2006,
18 

holding that although the Decision dated October 10, 2005 has become final and executory, it
may still consider the Motion for Clarification because the petitioner simply wanted to clarify the
meaning of "net profit earned." Furthermore, the same Order held:
19 

ALL TOLD, the Court Order dated August 31, 2006 is hereby ordered set aside. NET PROFIT
EARNED, which is subject of forfeiture in favor of [the] parties' common children, is ordered to be
computed in accordance [with] par. 4 of Article 102 of the Family Code. 20

On November 21, 2006, the respondents filed a Motion for Reconsideration, praying for the
21 

correction and reversal of the Order dated November 8, 2006. Thereafter, on January 8,
2007, the trial court had changed its ruling again and granted the respondents' Motion for
22 

Reconsideration whereby the Order dated November 8, 2006 was set aside to reinstate the
Order dated August 31, 2006.

Not satisfied with the trial court's Order, the petitioner filed on February 27, 2007 this instant
Petition for Review under Rule 45 of the Rules of Court, raising the following:
 Issues

IS THE DISSOLUTION AND THE CONSEQUENT LIQUIDATION OF THE COMMON

PROPERTIES OF THE HUSBAND AND WIFE BY VIRTUE OF THE DECREE OF LEGAL
SEPARATION GOVERNED BY ARTICLE 125 (SIC) OF THE FAMILY CODE?

II

WHAT IS THE MEANING OF THE NET PROFITS EARNED BY THE CONJUGAL

PARTNERSHIP FOR PURPOSES OF EFFECTING THE FORFEITURE AUTHORIZED UNDER
ARTICLE 63 OF THE FAMILY CODE?

III

WHAT LAW GOVERNS THE PROPERTY RELATIONS BETWEEN THE HUSBAND AND WIFE
WHO GOT MARRIED IN 1977? CAN THE FAMILY CODE OF THE PHILIPPINES BE GIVEN
RETROACTIVE EFFECT FOR PURPOSES OF DETERMINING THE NET PROFITS SUBJECT
OF FORFEITURE AS A RESULT OF THE DECREE OF LEGAL SEPARATION WITHOUT
IMPAIRING VESTED RIGHTS ALREADY ACQUIRED UNDER THE CIVIL CODE?

IV

WHAT PROPERTIES SHALL BE INCLUDED IN THE FORFEITURE OF THE SHARE OF THE

GUILTY SPOUSE IN THE NET CONJUGAL PARTNERSHIP AS A RESULT OF THE
ISSUANCE OF THE DECREE OF LEGAL SEPARATION? 23

Our Ruling

While the petitioner has raised a number of issues on the applicability of certain laws, we are
well-aware that the respondents have called our attention to the fact that the Decision dated
October 10, 2005 has attained finality when the Motion for Clarification was filed. Thus, we are
24 

constrained to resolve first the issue of the finality of the Decision dated October 10, 2005 and
subsequently discuss the matters that we can clarify.

The Decision dated October 10, 2005 has become final and executory at the time the
Motion for Clarification was filed on July 7, 2006.

Section 3, Rule 41 of the Rules of Court provides:

Section 3. Period of ordinary appeal. - The appeal shall be taken within fifteen (15) days from
notice of the judgment or final order appealed from. Where a record on appeal is required, the
appellant shall file a notice of appeal and a record on appeal within thirty (30) days from notice of
the judgment or final order.

The period of appeal shall be interrupted by a timely motion for new trial or reconsideration. No
motion for extension of time to file a motion for new trial or reconsideration shall be allowed.

In Neypes v. Court of Appeals, we clarified that to standardize the appeal periods provided in the
25 

Rules and to afford litigants fair opportunity to appeal their cases, we held that "it would be
practical to allow a fresh period of 15 days within which to file the notice of appeal in the RTC,
counted from receipt of the order dismissing a motion for a new trial or motion for
reconsideration."26
In Neypes, we explained that the "fresh period rule" shall also apply to Rule 40 governing
appeals from the Municipal Trial Courts to the RTCs; Rule 42 on petitions for review from the
RTCs to the Court of Appeals (CA); Rule 43 on appeals from quasi-judicial agencies to the CA
and Rule 45 governing appeals by certiorari to the Supreme Court. We also said, "The new rule
aims to regiment or make the appeal period uniform, to be counted from receipt of the order
denying the motion for new trial, motion for reconsideration (whether full or partial) or any final
order or resolution." In other words, a party litigant may file his notice of appeal within a fresh 15-
27 

day period from his receipt of the trial court's decision or final order denying his motion for new
trial or motion for reconsideration. Failure to avail of the fresh 15-day period from the denial of
the motion for reconsideration makes the decision or final order in question final and executory.

In the case at bar, the trial court rendered its Decision on October 10, 2005. The petitioner
neither filed a motion for reconsideration nor a notice of appeal. On December 16, 2005, or
after 67 days had lapsed, the trial court issued an order granting the respondent's motion for
execution; and on February 10, 2006, or after 123 days had lapsed, the trial court issued a writ of
execution. Finally, when the writ had already been partially executed, the petitioner, on July 7,
2006 or after 270 days had lapsed, filed his Motion for Clarification on the definition of the "net
profits earned." From the foregoing, the petitioner had clearly slept on his right to question the
RTC’s Decision dated October 10, 2005. For 270 days, the petitioner never raised a single issue
until the decision had already been partially executed. Thus at the time the petitioner filed his
motion for clarification, the trial court’s decision has become final and executory. A judgment
becomes final and executory when the reglementary period to appeal lapses and no appeal is
perfected within such period. Consequently, no court, not even this Court, can arrogate unto itself
appellate jurisdiction to review a case or modify a judgment that became final. 28

The petitioner argues that the decision he is questioning is a void judgment. Being such, the
petitioner's thesis is that it can still be disturbed even after 270 days had lapsed from the
issuance of the decision to the filing of the motion for clarification. He said that "a void judgment
is no judgment at all. It never attains finality and cannot be a source of any right nor any
obligation." But what precisely is a void judgment in our jurisdiction? When does a judgment
29 

becomes void?

"A judgment is null and void when the court which rendered it had no power to grant the relief or
no jurisdiction over the subject matter or over the parties or both." In other words, a court, which
30 

does not have the power to decide a case or that has no jurisdiction over the subject matter or
the parties, will issue a void judgment or a coram non judice. 31

The questioned judgment does not fall within the purview of a void judgment. For sure, the trial
court has jurisdiction over a case involving legal separation. Republic Act (R.A.) No. 8369
confers upon an RTC, designated as the Family Court of a city, the exclusive original jurisdiction
to hear and decide, among others, complaints or petitions relating to marital status and property
relations of the husband and wife or those living together. The Rule on Legal
32 

Separation provides that "the petition [for legal separation] shall be filed in the Family Court of
33 

the province or city where the petitioner or the respondent has been residing for at least six
months prior to the date of filing or in the case of a non-resident respondent, where he may be
found in the Philippines, at the election of the petitioner." In the instant case, herein respondent
34 

Rita is found to reside in Tungao, Butuan City for more than six months prior to the date of filing
of the petition; thus, the RTC, clearly has jurisdiction over the respondent's petition below.
Furthermore, the RTC also acquired jurisdiction over the persons of both parties, considering that
summons and a copy of the complaint with its annexes were served upon the herein petitioner on
December 14, 2000 and that the herein petitioner filed his Answer to the Complaint on January 9,
2001. Thus, without doubt, the RTC, which has rendered the questioned judgment, has
35 

jurisdiction over the complaint and the persons of the parties.

From the aforecited facts, the questioned October 10, 2005 judgment of the trial court is clearly
not void ab initio, since it was rendered within the ambit of the court's jurisdiction. Being such, the
same cannot anymore be disturbed, even if the modification is meant to correct what may be
considered an erroneous conclusion of fact or law. In fact, we have ruled that for "[as] long as
36 

the public respondent acted with jurisdiction, any error committed by him or it in the exercise
thereof will amount to nothing more than an error of judgment which may be reviewed or
corrected only by appeal." Granting without admitting that the RTC's judgment dated October
37 

10, 2005 was erroneous, the petitioner's remedy should be an appeal filed within the
reglementary period. Unfortunately, the petitioner failed to do this. He has already lost the
chance to question the trial court's decision, which has become immutable and unalterable. What
we can only do is to clarify the very question raised below and nothing more.

For our convenience, the following matters cannot anymore be disturbed since the October 10,
2005 judgment has already become immutable and unalterable, to wit:

(a) The finding that the petitioner is the offending spouse since he cohabited with a
woman who is not his wife; 38

(b) The trial court's grant of the petition for legal separation of respondent Rita; 39

(c) The dissolution and liquidation of the conjugal partnership; 40

(d) The forfeiture of the petitioner's right to any share of the net profits earned by the
conjugal partnership; 41

(e) The award to the innocent spouse of the minor children's custody; 42

(f) The disqualification of the offending spouse from inheriting from the innocent spouse
by intestate succession; 43

(g) The revocation of provisions in favor of the offending spouse made in the will of the
innocent spouse; 44

(h) The holding that the property relation of the parties is conjugal partnership of gains
and pursuant to Article 116 of the Family Code, all properties acquired during the
marriage, whether acquired by one or both spouses, is presumed to be conjugal unless
the contrary is proved; 45

(i) The finding that the spouses acquired their real and personal properties while they
were living together; 46

(j) The list of properties which Rizal Commercial Banking Corporation (RCBC)
foreclosed;47

(k) The list of the remaining properties of the couple which must be dissolved and
liquidated and the fact that respondent Rita was the one who took charge of the
administration of these properties; 48

(l) The holding that the conjugal partnership shall be liable to matters included under
Article 121 of the Family Code and the conjugal liabilities totaling ₱503,862.10 shall be
charged to the income generated by these properties; 49

(m) The fact that the trial court had no way of knowing whether the petitioner had
separate properties which can satisfy his share for the support of the family; 50

(n) The holding that the applicable law in this case is Article 129(7); 51
 (o) The ruling that the remaining properties not subject to any encumbrance shall
therefore be divided equally between the petitioner and the respondent without prejudice
to the children's legitime;
52

(p) The holding that the petitioner's share of the net profits earned by the conjugal
partnership is forfeited in favor of the common children; and
53 

(q) The order to the petitioner to reimburse the respondents the sum of ₱19,000.00 as
attorney's fees and litigation expenses of ₱5,000.00. 54

After discussing lengthily the immutability of the Decision dated October 10, 2005, we will
discuss the following issues for the enlightenment of the parties and the public at large.

Article 129 of the Family Code applies to the present case since the parties' property
relation is governed by the system of relative community or conjugal partnership of gains.

The petitioner claims that the court a quo is wrong when it applied Article 129 of the Family
Code, instead of Article 102. He confusingly argues that Article 102 applies because there is no
other provision under the Family Code which defines net profits earned subject of forfeiture as a
result of legal separation.

Offhand, the trial court's Decision dated October 10, 2005 held that Article 129(7) of the Family
Code applies in this case. We agree with the trial court's holding.

First, let us determine what governs the couple's property relation. From the record, we can
deduce that the petitioner and the respondent tied the marital knot on January 6, 1977. Since at
the time of the exchange of marital vows, the operative law was the Civil Code of the Philippines
(R.A. No. 386) and since they did not agree on a marriage settlement, the property relations
between the petitioner and the respondent is the system of relative community or conjugal
partnership of gains. Article 119 of the Civil Code provides:
55 

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.

Thus, from the foregoing facts and law, it is clear that what governs the property relations of the
petitioner and of the respondent is conjugal partnership of gains. And under this property
relation, "the husband and the wife place in a common fund the fruits of their separate property
and the income from their work or industry." The husband and wife also own in common all the
56 

property of the conjugal partnership of gains. 57

Second, since at the time of the dissolution of the petitioner and the respondent's marriage the
operative law is already the Family Code, the same applies in the instant case and the applicable
law in so far as the liquidation of the conjugal partnership assets and liabilities is concerned is
Article 129 of the Family Code in relation to Article 63(2) of the Family Code. The latter provision
is applicable because according to Article 256 of the Family Code "[t]his Code shall have
retroactive effect insofar as it does not prejudice or impair vested or acquired rights in
accordance with the Civil Code or other law." 58

Now, the petitioner asks: Was his vested right over half of the common properties of the conjugal
partnership violated when the trial court forfeited them in favor of his children pursuant to Articles
63(2) and 129 of the Family Code?
We respond in the negative.

Indeed, the petitioner claims that his vested rights have been impaired, arguing: "As earlier
adverted to, the petitioner acquired vested rights over half of the conjugal properties, the same
being owned in common by the spouses. If the provisions of the Family Code are to be given
retroactive application to the point of authorizing the forfeiture of the petitioner's share in the net
remainder of the conjugal partnership properties, the same impairs his rights acquired prior to the
effectivity of the Family Code." In other words, the petitioner is saying that since the property
59 

relations between the spouses is governed by the regime of Conjugal Partnership of Gains under
the Civil Code, the petitioner acquired vested rights over half of the properties of the Conjugal
Partnership of Gains, pursuant to Article 143 of the Civil Code, which provides: "All property of
the conjugal partnership of gains is owned in common by the husband and wife." Thus, since he
60 

is one of the owners of the properties covered by the conjugal partnership of gains, he has a
vested right over half of the said properties, even after the promulgation of the Family Code; and
he insisted that no provision under the Family Code may deprive him of this vested right by virtue
of Article 256 of the Family Code which prohibits retroactive application of the Family Code when
it will prejudice a person's vested right.

However, the petitioner's claim of vested right is not one which is written on stone. In Go, Jr. v.
Court of Appeals, we define and explained "vested right" in the following manner:
61 

A vested right is one whose existence, effectivity and extent do not depend upon events foreign
to the will of the holder, or to the exercise of which no obstacle exists, and which is immediate
and perfect in itself and not dependent upon a contingency. The term "vested right" expresses
the concept of present fixed interest which, in right reason and natural justice, should be
protected against arbitrary State action, or an innately just and imperative right which enlightened
free society, sensitive to inherent and irrefragable individual rights, cannot deny.

To be vested, a right must have become a title—legal or equitable—to the present or future
enjoyment of property. (Citations omitted)
62 

In our en banc Resolution dated October 18, 2005 for ABAKADA Guro Party List Officer Samson
S. Alcantara, et al. v. The Hon. Executive Secretary Eduardo R. Ermita, we also explained:
63 

The concept of "vested right" is a consequence of the constitutional guaranty of due

process that expresses a present fixed interest which in right reason and natural justice is
protected against arbitrary state action; it includes not only legal or equitable title to the
enforcement of a demand but also exemptions from new obligations created after the right has
become vested. Rights are considered vested when the right to enjoyment is a present interest,
absolute, unconditional, and perfect or fixed and irrefutable. (Emphasis and underscoring
64 

supplied)

From the foregoing, it is clear that while one may not be deprived of his "vested right," he may
lose the same if there is due process and such deprivation is founded in law and jurisprudence.

In the present case, the petitioner was accorded his right to due process. First, he was well-
aware that the respondent prayed in her complaint that all of the conjugal properties be awarded
to her. In fact, in his Answer, the petitioner prayed that the trial court divide the community
65 

assets between the petitioner and the respondent as circumstances and evidence warrant after
the accounting and inventory of all the community properties of the parties. Second, when the
66 

Decision dated October 10, 2005 was promulgated, the petitioner never questioned the trial
court's ruling forfeiting what the trial court termed as "net profits," pursuant to Article 129(7) of the
Family Code. Thus, the petitioner cannot claim being deprived of his right to due process.
67 

Furthermore, we take note that the alleged deprivation of the petitioner's "vested right" is one
founded, not only in the provisions of the Family Code, but in Article 176 of the Civil Code. This
provision is like Articles 63 and 129 of the Family Code on the forfeiture of the guilty spouse's
share in the conjugal partnership profits. The said provision says:

Art. 176. In case of legal separation, the guilty spouse shall forfeit his or her share of the conjugal
partnership profits, which shall be awarded to the children of both, and the children of the guilty
spouse had by a prior marriage. However, if the conjugal partnership property came mostly or
entirely from the work or industry, or from the wages and salaries, or from the fruits of the
separate property of the guilty spouse, this forfeiture shall not apply.

In case there are no children, the innocent spouse shall be entitled to all the net profits.

From the foregoing, the petitioner's claim of a vested right has no basis considering that even
under Article 176 of the Civil Code, his share of the conjugal partnership profits may be forfeited
if he is the guilty party in a legal separation case. Thus, after trial and after the petitioner was
given the chance to present his evidence, the petitioner's vested right claim may in fact be set
aside under the Civil Code since the trial court found him the guilty party.

More, in Abalos v. Dr. Macatangay, Jr., we reiterated our long-standing ruling that:
68 

[P]rior to the liquidation of the conjugal partnership, the interest of each spouse in the conjugal
assets is inchoate, a mere expectancy, which constitutes neither a legal nor an equitable estate,
and does not ripen into title until it appears that there are assets in the community as a result of
the liquidation and settlement. The interest of each spouse is limited to the net remainder or
"remanente liquido" (haber ganancial) resulting from the liquidation of the affairs of the
partnership after its dissolution. Thus, the right of the husband or wife to one-half of the conjugal
assets does not vest until the dissolution and liquidation of the conjugal partnership, or after
dissolution of the marriage, when it is finally determined that, after settlement of conjugal
obligations, there are net assets left which can be divided between the spouses or their
respective heirs. (Citations omitted)
69 

Finally, as earlier discussed, the trial court has already decided in its Decision dated October 10,
2005 that the applicable law in this case is Article 129(7) of the Family Code. The petitioner did
70 

not file a motion for reconsideration nor a notice of appeal. Thus, the petitioner is now precluded
from questioning the trial court's decision since it has become final and executory. The doctrine
of immutability and unalterability of a final judgment prevents us from disturbing the Decision
dated October 10, 2005 because final and executory decisions can no longer be reviewed nor
reversed by this Court. 71

From the above discussions, Article 129 of the Family Code clearly applies to the present case
since the parties' property relation is governed by the system of relative community or conjugal
partnership of gains and since the trial court's Decision has attained finality and immutability.

The net profits of the conjugal partnership of gains are all the fruits of the separate
properties of the spouses and the products of their labor and industry.

The petitioner inquires from us the meaning of "net profits" earned by the conjugal partnership for
purposes of effecting the forfeiture authorized under Article 63 of the Family Code. He insists that
since there is no other provision under the Family Code, which defines "net profits" earned
subject of forfeiture as a result of legal separation, then Article 102 of the Family Code applies.

What does Article 102 of the Family Code say? Is the computation of "net profits" earned in the
conjugal partnership of gains the same with the computation of "net profits" earned in the
absolute community?

Now, we clarify.
First and foremost, we must distinguish between the applicable law as to the property relations
between the parties and the applicable law as to the definition of "net profits." As earlier
discussed, Article 129 of the Family Code applies as to the property relations of the parties. In
other words, the computation and the succession of events will follow the provisions under Article
129 of the said Code. Moreover, as to the definition of "net profits," we cannot but refer to Article
102(4) of the Family Code, since it expressly provides that for purposes of computing the net
profits subject to forfeiture under Article 43, No. (2) and Article 63, No. (2), Article 102(4) applies.
In this provision, net profits "shall be the increase in value between the market value of the
community property at the time of the celebration of the marriage and the market value at the
time of its dissolution." Thus, without any iota of doubt, Article 102(4) applies to both the
72 

dissolution of the absolute community regime under Article 102 of the Family Code, and to the
dissolution of the conjugal partnership regime under Article 129 of the Family Code. Where lies
the difference? As earlier shown, the difference lies in the processes used under the dissolution
of the absolute community regime under Article 102 of the Family Code, and in the processes
used under the dissolution of the conjugal partnership regime under Article 129 of the Family
Code.

Let us now discuss the difference in the processes between the absolute community regime and
the conjugal partnership regime.

On Absolute Community Regime:

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. 73

Under Article 102 of the Family Code, upon dissolution of marriage, an inventory is prepared,
listing separately all the properties of the absolute community and the exclusive properties of
each; then the debts and obligations of the absolute community are paid out of the absolute
community's assets and if the community's properties are insufficient, the separate properties of
each of the couple will be solidarily liable for the unpaid balance. Whatever is left of the separate
properties will be delivered to each of them. The net remainder of the absolute community is its
net assets, which shall be divided between the husband and the wife; and for purposes of
computing the net profits subject to forfeiture, said profits shall be the increase in value between
the market value of the community property at the time of the celebration of the marriage and the
market value at the time of its dissolution.74

Applying Article 102 of the Family Code, the "net profits" requires that we first find the market
value of the properties at the time of the community's dissolution. From the totality of the market
value of all the properties, we subtract the debts and obligations of the absolute community and
this result to the net assets or net remainder of the properties of the absolute community, from
which we deduct the market value of the properties at the time of marriage, which then results to
the net profits.
75

Granting without admitting that Article 102 applies to the instant case, let us see what will happen
if we apply Article 102:

(a) According to the trial court's finding of facts, both husband and wife have no separate
properties, thus, the remaining properties in the list above are all part of the absolute
community. And its market value at the time of the dissolution of the absolute community
constitutes the "market value at dissolution."
 (b) Thus, when the petitioner and the respondent finally were legally separated, all the
properties which remained will be liable for the debts and obligations of the community.
Such debts and obligations will be subtracted from the "market value at dissolution."

(c) What remains after the debts and obligations have been paid from the total assets of
the absolute community constitutes the net remainder or net asset. And from such net
asset/remainder of the petitioner and respondent's remaining properties, the market
value at the time of marriage will be subtracted and the resulting totality constitutes the
"net profits."

(d) Since both husband and wife have no separate properties, and nothing would be
returned to each of them, what will be divided equally between them is simply the "net
profits." However, in the Decision dated October 10, 2005, the trial court forfeited the
half-share of the petitioner in favor of his children. Thus, if we use Article 102 in the
instant case (which should not be the case), nothing is left to the petitioner since both
parties entered into their marriage without bringing with them any property.

On Conjugal Partnership Regime:

Before we go into our disquisition on the Conjugal Partnership Regime, we make it clear that
Article 102(4) of the Family Code applies in the instant case for purposes only of defining "net
profit." As earlier explained, the definition of "net profits" in Article 102(4) of the Family Code
applies to both the absolute community regime and conjugal partnership regime as provided for
under Article 63, No. (2) of the Family Code, relative to the provisions on Legal Separation.

Now, when a couple enters into a regime of conjugal partnership of gains under Article 142 of
the Civil Code, "the husband and the wife place in common fund the fruits of their separate
property and 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." From the foregoing provision, each of the couple has his and her
76 

own property and debts. The law does not intend to effect a mixture or merger of those debts or
properties between the spouses. Rather, it establishes a complete separation of capitals. 77

Considering that the couple's marriage has been dissolved under the Family Code, Article 129 of
the same Code applies in the liquidation of the couple's properties in the event that the conjugal
partnership of gains is dissolved, to wit:

Art. 129. Upon the dissolution of the conjugal partnership regime, the following procedure shall
apply:

(1) An inventory shall be prepared, listing separately all the properties of the conjugal
partnership and the exclusive properties of each spouse.

(2) Amounts advanced by the conjugal partnership in payment of personal debts and
obligations of either spouse shall be credited to the conjugal partnership as an asset
thereof.

(3) Each spouse shall be reimbursed for the use of his or her exclusive funds in the
acquisition of property or for the value of his or her exclusive property, the ownership of
which has been vested by law in the conjugal partnership.

(4) The debts and obligations of the conjugal partnership shall be paid out of the conjugal
assets. In case of insufficiency of said assets, the spouses shall be solidarily liable for the
unpaid balance with their separate properties, in accordance with the provisions of
paragraph (2) of Article 121.
 (5) Whatever remains of the exclusive properties of the spouses shall thereafter be
delivered to each of them.

(6) Unless the owner had been indemnified from whatever source, the loss or
deterioration of movables used for the benefit of the family, belonging to either spouse,
even due to fortuitous event, shall be paid to said spouse from the conjugal funds, if any.

(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.

(8) The presumptive legitimes of the common children shall be delivered upon the
partition in accordance with Article 51.

(9) In the partition of the properties, 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 the majority of the common children choose to remain. Children below the
age of seven years are deemed to have chosen the mother, unless the court has decided
otherwise. In case there is no such majority, the court shall decide, taking into
consideration the best interests of said children.

In the normal course of events, the following are the steps in the liquidation of the properties of
the spouses:

(a) An inventory of all the actual properties shall be made, separately listing the couple's
conjugal properties and their separate properties. In the instant case, the trial court
78 

found that the couple has no separate properties when they married. Rather, the
79 

trial court identified the following conjugal properties, to wit:

1. coffee mill in Balongagan, Las Nieves, Agusan del Norte;

2. coffee mill in Durian, Las Nieves, Agusan del Norte;

3. corn mill in Casiklan, Las Nieves, Agusan del Norte;

4. coffee mill in Esperanza, Agusan del Sur;

5. a parcel of land with an area of 1,200 square meters located in Tungao,

Butuan City;

6. a parcel of agricultural land with an area of 5 hectares located in Manila de

Bugabos, Butuan City;

7. a parcel of land with an area of 84 square meters located in Tungao, Butuan

City;

8. Bashier Bon Factory located in Tungao, Butuan City. 80

(b) Ordinarily, the benefit received by a spouse from the conjugal partnership during the
marriage is returned in equal amount to the assets of the conjugal partnership; and if the
81 

community is enriched at the expense of the separate properties of either spouse, a

restitution of the value of such properties to their respective owners shall be made. 82
 (c) Subsequently, the couple's conjugal partnership shall pay the debts of the conjugal
partnership; while the debts and obligation of each of the spouses shall be paid from their
respective separate properties. But if the conjugal partnership is not sufficient to pay all
its debts and obligations, the spouses with their separate properties shall be solidarily
liable.83

(d) Now, what remains of the separate or exclusive properties of the husband and of the
wife shall be returned to each of them. In the instant case, since it was already
84 

established by the trial court that the spouses have no separate properties, there 85 

is nothing to return to any of them. The listed properties above are considered part of
the conjugal partnership. Thus, ordinarily, what remains in the above-listed properties
should be divided equally between the spouses and/or their respective heirs. However,
86 

since the trial court found the petitioner the guilty party, his share from the net profits of
the conjugal partnership is forfeited in favor of the common children, pursuant to Article
63(2) of the Family Code. Again, lest we be confused, like in the absolute community
regime, nothing will be returned to the guilty party in the conjugal partnership regime,
because there is no separate property which may be accounted for in the guilty
party's favor.

In the discussions above, we have seen that in both instances, the petitioner is not entitled to any
property at all. Thus, we cannot but uphold the Decision dated October 10, 2005 of the trial court.
However, we must clarify, as we already did above, the Order dated January 8, 2007.

WHEREFORE, the Decision dated October 10, 2005 of the Regional Trial Court, Branch 1 of
Butuan City is AFFIRMED. Acting on the Motion for Clarification dated July 7, 2006 in the
Regional Trial Court, the Order dated January 8, 2007 of the Regional Trial Court is hereby
CLARIFIED in accordance with the above discussions.

SO ORDERED.

D. Conjugal Partnership of gains

a. Presumption (Art. 116)

Ruiz vs CA, GR No. 146942, 22April 2003

G.R. No. 146942             April 22, 2003

CORAZON G. RUIZ, petitioner,
vs.
COURT OF APPEALS and CONSUELO TORRES, respondents.

PUNO, J.:

On appeal is the decision1 of the Court of Appeals in CA-G.R. CV No. 56621 dated 25 August
2000, setting aside the decision2 of the trial court dated 19 May 1997 and lifting the permanent
injunction on the foreclosure sale of the subject lot covered by TCT No. RT-96686, as well as its
subsequent Resolution3 dated 26 January 2001, denying petitioner’s Motion for Reconsideration.

The facts of the case are as follows:

Petitioner Corazon G. Ruiz is engaged in the business of buying and selling jewelry. 4 She
obtained loans from private respondent Consuelo Torres on different occasions, in the following
amounts: P100,000.00; P200,000.00; P300,000.00; and P150,000.00. 5 Prior to their maturity, the
loans were consolidated under one (1) promissory note dated March 22, 1995, which reads as
follows:6

"P750,000.00 Quezon City, March

22, 1995

PROMISSORY NOTE

For value received, I, CORAZON RUIZ, as principal and ROGELIO RUIZ as surety in

solidum, jointly and severally promise to pay to the order of CONSUELO P. TORRES the
sum of SEVEN HUNDRED FIFTY THOUSAND PESOS (P750,000.00) Philippine
Currency, to earn an interest at the rate of three per cent (3%) a month, for thirteen
months, payable every _____ of the month, and to start on April 1995 and to mature
on April 1996, subject to renewal.

If the amount due is not paid on date due, a SURCHARGE of ONE PERCENT of the
principal loan, for every month default, shall be collected.

Remaining balance as of the maturity date shall earn an interest at the rate of ten percent
a month, compounded monthly.

It is finally agreed that the principal and surety in solidum, shall pay attorney’s fees at the
rate of twenty-five percent (25%) of the entire amount to be collected, in case this note is
not paid according to the terms and conditions set forth, and same is referred to a lawyer
for collection.

In computing the interest and surcharge, a fraction of the month shall be considered one
full month.

In the event of an amicable settlement, the principal and surety in solidum shall
reimburse the expenses of the plaintiff.

(Sgd.) Corazon Ruiz __________________

            Principal Surety"

The consolidated loan of P750,000.00 was secured by a real estate mortgage on a 240-square
meter lot in New Haven Village, Novaliches, Quezon City, covered by Transfer Certificate of Title
(TCT) No. RT-96686, and registered in the name of petitioner. 7 The mortgage was signed by
Corazon Ruiz for herself and as attorney-in-fact of her husband Rogelio. It was executed on 20
March 1995, or two (2) days before the execution of the subject promissory note. 8

Thereafter, petitioner obtained three (3) more loans from private respondent, under the following
promissory notes: (1) promissory note dated 21 April 1995, in the amount of P100,000.00; 9 (2)
promissory note dated May 23, 1995, in the amount of P100,000.00; 10 and (3) promissory note
dated December 21, 1995, in the amount of P100,000.00. 11 These combined loans of
P300,000.00 were secured by P571,000.00 worth of jewelry pledged by petitioner to private
respondent.12

From April 1995 to March 1996, petitioner paid the stipulated 3% monthly interest on the
P750,000.00 loan,13 amounting to P270,000.00.14 After March 1996, petitioner was unable to
make interest payments as she had difficulties collecting from her clients in her jewelry
business.15
Due to petitioner’s failure to pay the principal loan of P750,000.00, as well as the interest
payment for April 1996, private respondent demanded payment not only of the P750,000.00
loan, but also of the P300,000.00 loan. 16 When petitioner failed to pay, private respondent sought
the extra-judicial foreclosure of the aforementioned real estate mortgage. 17

On September 5, 1996, Acting Clerk of Court and Ex-Officio Sheriff Perlita V. Ele, Deputy Sheriff
In-Charge Rolando G. Acal and Supervising Sheriff Silverio P. Bernas issued a Notice of Sheriff’s
Sale of subject lot. The public auction was scheduled on October 8, 1996. 18

On October 7, 1996, one (1) day before the scheduled auction sale, petitioner filed a complaint
with the RTC of Quezon City docketed as Civil Case No. Q-96-29024, with a prayer for the
issuance of a Temporary Restraining Order to enjoin the sheriff from proceeding with the
foreclosure sale and to fix her indebtedness to private respondent to P706,000.00. The
computed amount of P706,000.00 was based on the aggregate loan of P750,000.00, covered by
the March 22, 1995 promissory note, plus the other loans of P300,000.00, covered by separate
promissory notes, plus interest, minus P571,000.00 representing the amount of jewelry pledged
in favor of private respondent. 19

The trial court granted the prayer for the issuance of a Temporary Restraining Order, 20 and on 29
October 1996, issued a writ of preliminary injunction. 21 In its Decision dated May 19, 1997, it
ordered the Clerk of Court and Ex-Officio Sheriff to desist with the foreclosure sale of the subject
property, and it made permanent the writ of preliminary injunction. It held that the real estate
mortgage is unenforceable because of the lack of the participation and signature of petitioner’s
husband. It noted that although the subject real estate mortgage stated that petitioner was
"attorney-in-fact for herself and her husband," the Special Power of Attorney was never
presented in court during the trial.22

The trial court further held that the promissory note in question is a unilateral contract of
adhesion drafted by private respondent. It struck down the contract as repugnant to public policy
because it was imposed by a dominant bargaining party (private respondent) on a weaker party
(petitioner).23 Nevertheless, it held that petitioner still has an obligation to pay the private
respondent. Private respondent was further barred from imposing on petitioner the obligation to
pay the surcharge of one percent (1%) per month from March 1996 onwards, and interest of ten
percent (10%) a month, compounded monthly from September 1996 to January 1997. Petitioner
was thus ordered to pay the amount of P750,000.00 plus three percent (3%) interest per month,
or a total of P885,000.00, plus legal interest from date of [receipt of] the decision until the total
amount of P885,000.00 is paid.24

Aside from the foregoing, the trial court took into account petitioner’s proposal to pay her other
obligations to private respondent in the amount of P392,000.00. 25

The trial court also recognized the expenses borne by private respondent with regard the
foreclosure sale and attorney’s fees. As the notice of the foreclosure sale has already been
published, it ordered the petitioner to reimburse private respondent the amount of P15,000.00
plus attorney’s fees of the same amount. 26

Thus, the trial court computed petitioner’s obligation to private respondent, as follows:

Principal Loan ……………. P 750,000.00

Interest…………………….. 135,000.00
Other Loans………………. 392,000.00
Publication Fees……………. 15,000.00
Attorney’s Fees ……………         15,000.00
TOTAL…………………… P1,307,000.00
with legal interest from date of receipt of decision until payment of total amount of P1,307,000.00
has been made.27

Private respondent’s motion for reconsideration was denied in an Order dated July 21, 1997.

Private respondent appealed to the Court of Appeals. The appellate court set aside the decision
of the trial court. It ruled that the real estate mortgage is valid despite the non-participation of
petitioner’s husband in its execution because the land on which it was constituted is paraphernal
property of petitioner-wife. Consequently, she may encumber the lot without the consent of her
husband.28 It allowed its foreclosure since the loan it secured was not paid.

Nonetheless, the appellate court declared as invalid the 10% compounded monthly interest 29 and
the 10% surcharge per month stipulated in the promissory notes dated May 23, 1995 and
December 1, 1995,30 and so too the 1% compounded monthly interest stipulated in the
promissory note dated 21 April 1995, 31 for being excessive, iniquitous, unconscionable, and
contrary to morals. It held that the legal rate of interest of 12% per annum shall apply after the
maturity dates of the notes until full payment of the entire amount due, and that the only
permissible rate of surcharge is 1% per month, without compounding. 32 The appellate court also
granted attorney’s fees in the amount of P50,000.00, and not the stipulated 25% of the amount
due, following the ruling in the case of Medel v. Court of Appeals.33

Now, before this Court, petitioner assigns the following errors:

(1) PUBLIC RESPONDENT COURT OF APPEALS GRAVELY ERRED IN RULING

THAT THE PROMISSORY NOTE OF P750,000.00 IS NOT A CONTRACT OF
ADHESION DESPITE THE CLEAR SHOWING THAT THE SAME IS A READY-MADE
CONTRACT PREPARED BY (THE) RESPONDENT CONSUELO TORRES AND DID
NOT REFLECT THEIR TRUE INTENTIONS AS IT WEIGHED HEAVILY IN FAVOR OF
RESPONDENT AND AGAINST PETITIONER.

(2) PUBLIC RESPONDENT COURT OF APPEALS GRAVELY ERRED IN DECLARING

THAT THE PROPERTY COVERED BY THE SUBJECT DEED OF MORTGAGE OF
MARCH 20, 1995 IS A PARAPHERNAL PROPERTY OF THE PETITIONER AND NOT
CONJUGAL EVEN THOUGH THE ISSUE OF WHETHER OR NOT THE MORTGAGED
PROPERTY IS PARAPHERNAL WAS NEVER RAISED, NOR DISCUSSED AND
ARGUED BEFORE THE TRIAL COURT.

(3) PUBLIC RESPONDENT COURT OF APPEALS GRAVELY ERRED IN

DISREGARDING THE TRIAL COURT’S COMPUTATION OF THE ACTUAL
OBLIGATIONS OF THE PETITIONER WITH (THE) RESPONDENT TORRES EVEN
THOUGH THE SAME IS BASED ON EVIDENCE SUBMITTED BEFORE IT.

The pertinent issues to be resolved are:

(1) Whether the promissory note of P750,000.00 is a contract of adhesion;

(2) Whether the real property covered by the subject deed of mortgage dated March 20, 1995 is
paraphernal property of petitioner; and

(3) Whether the rates of interests and surcharges on the obligation of petitioner to private
respondent are valid.

I
We hold that the promissory note in the case at bar is not a contract of adhesion. In Sweet Lines,
Inc. vs. Teves,34 this Court discussed the nature of a contract of adhesion as follows:

". . . there are certain contracts almost all the provisions of which have been drafted only
by one party, usually a corporation. Such contracts are called contracts of adhesion,
because the only participation of the other party is the signing of his signature or his
‘adhesion’ thereto. Insurance contracts, bills of lading, contracts of sale of lots on the
installment plan fall into this category.35

" . . . it is drafted only by one party, usually the corporation, and is sought to be accepted
or adhered to by the other party . . . who cannot change the same and who are thus
made to adhere hereto on the ‘take it or leave it’ basis . . . "36

In said case of Sweet Lines,37 the conditions of the contract on the 4 x 6 inches passenger ticket
are in fine print. Thus we held:

" . . . it is hardly just and proper to expect the passengers to examine their tickets
received from crowded/congested counters, more often than not during rush hours, for
conditions that may be printed thereon, much less charge them with having consented to
the conditions, so printed, especially if there are a number of such conditions in fine print,
as in this case."38

We further stressed in the said case that the questioned ‘Condition No. 14’ was prepared solely
by one party which was the corporation, and the other party who was then a passenger had no
say in its preparation. The passengers have no opportunity to examine and consider the terms
and conditions of the contract prior to the purchase of their tickets.39

In the case at bar, the promissory note in question did not contain any fine print provision which
could not have been examined by the petitioner. Petitioner had all the time to go over and study
the stipulations embodied in the promissory note. Aside from the March 22, 1995 promissory
note for P750,000.00, three other promissory notes of different dates and amounts were
executed by petitioner in favor of private respondent. These promissory notes contain similar
terms and conditions, with a little variance in the terms of interests and surcharges. The fact that
petitioner and private respondent had entered into not only one but several loan transactions
shows that petitioner was not in any way compelled to accept the terms allegedly imposed by
private respondent. Moreover, petitioner, in her complaint 40 dated October 7, 1996 filed with the
trial court, never claimed that she was forced to sign the subject note. Paragraph five of her
complaint states:

"That on or about March 22, 1995 plaintiff was required by the defendant Torres to
execute a promissory note consolidating her unpaid principal loan and interests which
said defendant computed to be in the sum of P750,000.00 . . ."

To be required is certainly different from being compelled. She could have rejected the conditions
made by private respondent. As an experienced business- woman, she ought to understand all
the conditions set forth in the subject promissory note. As held by this Court in Lee, et al. vs.
Court of Appeals, et al.,41 it is presumed that a person takes ordinary care of his
concerns.42 Hence, the natural presumption is that one does not sign a document without first
informing himself of its contents and consequences. This presumption acquires greater force in
the case at bar where not only one but several documents were executed at different times by
petitioner in favor of private respondent.

II

We also affirm the ruling of the appellate court that the real property covered by the subject deed
of mortgage is paraphernal property. The property subject of the mortgage is registered in the
name of "Corazon G. Ruiz, of legal age, married to Rogelio Ruiz, Filipinos." Thus, title is
registered in the name of Corazon alone because the phrase "married to Rogelio Ruiz" is merely
descriptive of the civil status of Corazon and should not be construed to mean that her husband
is also a registered owner. Furthermore, registration of the property in the name of "Corazon G.
Ruiz, of legal age, married to Rogelio Ruiz" is not proof that such property was acquired during
the marriage, and thus, is presumed to be conjugal. The property could have been acquired by
Corazon while she was still single, and registered only after her marriage to Rogelio Ruiz.
Acquisition of title and registration thereof are two different acts.43 The presumption under Article
116 of the Family Code that properties acquired during the marriage are presumed to be
conjugal cannot apply in the instant case. Before such presumption can apply, it must first be
established that the property was in fact acquired during the marriage. In other words, proof of
acquisition during the marriage is a condition sine qua non for the operation of the presumption in
favor of conjugal ownership.44 No such proof was offered nor presented in the case at bar. Thus,
on the basis alone of the certificate of title, it cannot be presumed that said property was
acquired during the marriage and that it is conjugal property. Since there is no showing as to
when the property in question was acquired, the fact that the title is in the name of the wife alone
is determinative of its nature as paraphernal, i.e., belonging exclusively to said spouse.45 The
only import of the title is that Corazon is the owner of said property, the same having been
registered in her name alone, and that she is married to Rogelio Ruiz. 46

III

We now resolve the issue of whether the rates of interests and surcharges on the obligation of
petitioner to private respondent are legal.

The four (4) unpaid promissory notes executed by petitioner in favor of private respondent are in
the following amounts and maturity dates:

(1) P750,000.00, dated March 22, 1995 matured on April 21, 1996;

(2) P100,000.00, dated April 21, 1995 matured on August 21, 1995;

(3) P100,000.00, dated May 23, 1995 matured on November 23, 1995; and

(4) P100,000.00, dated December 21, 1995 matured on March 1, 1996.

The P750,000.00 promissory note dated March 22, 1995 has the following provisions:

(1) 3% monthly interest, from the signing of the note until its maturity date;

(2) 10% compounded monthly interest on the remaining balance at maturity date;

(3) 1% surcharge on the principal loan for every month of default; and

(4) 25% attorney’s fees.

The P100,000.00 promissory note dated April 21, 1995 has the following provisions:

(1) 3% monthly interest, from the signing of the note until its maturity date;

(2) 10% monthly interest on the remaining balance at maturity date;

(3) 1% compounded monthly surcharge on the principal loan for every month of default;
and
 (4) 10% attorney’s fees.

The two (2) other P100,000.00 promissory notes dated May 23, 1995 and December 1, 1995
have the following provisions:

(1) 3% monthly interest, from the signing of the note until its maturity date;

(2) 10% compounded monthly interest on the remaining balance at maturity date;

(3) 10% surcharge on the principal loan for every month of default; and

(4) 10% attorney’s fees.

We affirm the ruling of the appellate court, striking down as invalid the 10% compounded monthly
interest, the 10% surcharge per month stipulated in the promissory notes dated May 23, 1995
and December 1, 1995, and the 1% compounded monthly interest stipulated in the promissory
note dated April 21, 1995. The legal rate of interest of 12% per annum shall apply after the
maturity dates of the notes until full payment of the entire amount due. Also, the only permissible
rate of surcharge is 1% per month, without compounding. We also uphold the award of the
appellate court of attorney’s fees, the amount of which having been reasonably reduced from the
stipulated 25% (in the March 22, 1995 promissory note) and 10% (in the other three promissory
notes) of the entire amount due, to a fixed amount of P50,000.00. However, we equitably reduce
the 3% per month or 36% per annum interest present in all four (4) promissory notes to 1% per
month or 12% per annum interest.

The foregoing rates of interests and surcharges are in accord with Medel vs. Court of
Appeals,47 Garcia vs. Court of Appeals,48 Bautista vs. Pilar Development Corporation,49 and the
recent case of Spouses Solangon vs. Salazar.50 This Court invalidated a stipulated 5.5% per
month or 66% per annum interest on a P500,000.00 loan in Medel 51 and a 6% per month or 72%
per annum interest on a P60,000.00 loan in Solangon52 for being excessive, iniquitous,
unconscionable and exorbitant. In both cases, we reduced the interest rate to 12% per annum.
We held that while the Usury Law has been suspended by Central Bank Circular No. 905, s.
1982, effective on January 1, 1983, and parties to a loan agreement have been given wide
latitude to agree on any interest rate, still stipulated interest rates are illegal if they are
unconscionable. Nothing in the said circular grants lenders carte blanche authority to raise
interest rates to levels which will either enslave their borrowers or lead to a hemorrhaging of their
assets.53 On the other hand, in Bautista vs. Pilar Development Corp.,54 this Court upheld the
validity of a 21% per annum interest on a P142,326.43 loan, and in Garcia vs. Court of Appeals,
sustained the agreement of the parties to a 24% per annum interest on an P8,649,250.00 loan. It
is on the basis of these cases that we reduce the 36% per annum interest to 12%. An interest of
12% per annum is deemed fair and reasonable. While it is true that this Court invalidated a much
higher interest rate of 66% per annum in Medel55 and 72% in Solangon56 it has sustained the
validity of a much lower interest rate of 21% in Bautista57 and 24% in Garcia.58 We still find the
36% per annum interest rate in the case at bar to be substantially greater than those upheld by
this Court in the two (2) aforecited cases.

The 1% surcharge on the principal loan for every month of default is valid. This surcharge or
penalty stipulated in a loan agreement in case of default partakes of the nature of liquidated
damages under Art. 2227 of the New Civil Code, and is separate and distinct from interest
payment.59 Also referred to as a penalty clause, it is expressly recognized by law. It is an
accessory undertaking to assume greater liability on the part of an obligor in case of breach of an
obligation.60 The obligor would then be bound to pay the stipulated amount of indemnity without
the necessity of proof on the existence and on the measure of damages caused by the
breach.61 Although the courts may not at liberty ignore the freedom of the parties to agree on
such terms and conditions as they see fit that contravene neither law nor morals, good customs,
public order or public policy, a stipulated penalty, nevertheless, may be equitably reduced if it is
iniquitous or unconscionable. 62 In the instant case, the 10% surcharge per month stipulated in the
promissory notes dated May 23, 1995 and December 1, 1995 was properly reduced by the
appellate court.

In sum, petitioner shall pay private respondent the following:

1. Principal of loan under promissory note dated March P750,000.00

22, 1995

a. 1% interest per month on principal from March 22,

1995 until fully paid, less P270,000.00 paid by
petitioner as interest from April 1995 to March
1996

b. 1% surcharge per month on principal from May

1996 until fully paid

2. Principal of loan under promissory note dated April 21, P100,000.00

1995

a. 1% interest per month on principal from April 21,

1995 until fully paid

b. 1% surcharge per month on principal from

September 1995 until fully paid

3. Principal of loan under promissory note dated May 23, P100,000.00

1995

a. 1% interest per month on principal from May 23,

1995 until fully paid

b. 1% surcharge per month on principal from

December 1995 until fully paid

4. Principal of loan under promissory note dated P100,000.00

December 1, 1995

a. 1% interest per month on principal from

December 1, 1995 until fully paid

b. 1% surcharge per month on principal from April

1996 until fully paid

5. Attorney’s fees P 50,000.00

Hence, since the mortgage is valid and the loan it secures remains unpaid, the foreclosure
proceedings may now proceed.

IN VIEW WHEREOF, the appealed Decision of the Court of Appeals is AFFIRMED, subject to
the MODIFICATION that the interest rate of 36% per annum is ordered reduced to 12 % per
annum.

SO ORDERED.

a1. Alien Spouse/Conj. Prop. – Art 117

18) Beumer v. Amores, GR No. 195670, 12/3/2012

WILLEM BEUMER, Petitioner,
vs.
AVELINA AMORES, Respondent.

DECISION

PERLAS-BERNABE, J.:

Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of CoLlli
1 

assailing the October 8, 2009 Decision and January 24, 2011 Resolution of the court of Appeals
2  3 

(CA) in CA-G.R. CV No. 01940, which affirmed the February 28, 2007 Decision of the Regional
4 

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
Decision dated November 10, 2000 on the basis of the former’s psychological incapacity as
5 

contemplated in Article 36 of the Family Code.

Consequently, petitioner filed a Petition for Dissolution of Conjugal Partnership dated December
6 

14, 2000 praying for the distribution of the following described properties claimed to have been
acquired during the subsistence of their marriage, to wit:

By Purchase:

a. Lot 1, Block 3 of the consolidated survey of Lots 2144 & 2147 of the Dumaguete
Cadastre, covered by Transfer Certificate of Title (TCT) No. 22846, containing an area of
252 square meters (sq.m.), including a residential house constructed thereon.

b. Lot 2142 of the Dumaguete Cadastre, covered by TCT No. 21974, containing an area
of 806 sq.m., including a residential house constructed thereon.

c. Lot 5845 of the Dumaguete Cadastre, covered by TCT No. 21306, containing an area
of 756 sq.m.

d. Lot 4, Block 4 of the consolidated survey of Lots 2144 & 2147 of the Dumaguete
Cadastre, covered by TCT No. 21307, containing an area of 45 sq.m.

By way of inheritance:

e. 1/7 of Lot 2055-A of the Dumaguete Cadastre, covered by TCT No. 23567, containing
an area of 2,635 sq.m. (the area that appertains to the conjugal partnership is 376.45
sq.m.).

f. 1/15 of Lot 2055-I of the Dumaguete Cadastre, covered by TCT No. 23575, containing
an area of 360 sq.m. (the area that appertains to the conjugal partnership is 24 sq.m.).7

In defense, respondent averred that, with the exception of their two (2) residential houses on
8 

Lots 1 and 2142, she and petitioner did not acquire any conjugal properties during their marriage,
the truth being that she used her own personal money to purchase Lots 1, 2142, 5845 and 4 out
of her personal funds and Lots 2055-A and 2055-I by way of inheritance. She submitted a joint
9 

affidavit executed by her and petitioner attesting to the fact that she purchased Lot 2142 and the
improvements thereon using her own money. Accordingly, respondent sought the dismissal of
10 

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 benefit since respondent did not have sufficient income to pay for
12 

their acquisition. He also claimed that the joint affidavit they submitted before the Register of
Deeds of Dumaguete City was contrary to Article 89 of the Family Code, hence, invalid. 13

For her part, respondent maintained that the money used for the purchase of the lots came
exclusively from her personal funds, in particular, her earnings from selling jewelry as well as
products from Avon, Triumph and Tupperware. She further asserted that after she filed for
14 

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 co-owned by the parties, the dispositive of
which reads:

WHEREFORE, judgment is hereby rendered granting the dissolution of the conjugal partnership
of gains between petitioner Willem Beumer and respondent Avelina Amores considering the fact
that their marriage was previously annulled by Branch 32 of this Court. The parcels of land
covered by Transfer Certificate of Titles Nos. 22846, 21974, 21306, 21307, 23567 and 23575 are
hereby declared paraphernal properties of respondent Avelina Amores due to the fact that while
these real properties were acquired by onerous title during their marital union, Willem Beumer,
being a foreigner, is not allowed by law to acquire any private land in the Philippines, except
through inheritance.

The personal properties, i.e., tools and equipment mentioned in the complaint which were
brought out by Willem from the conjugal dwelling are hereby declared to be exclusively owned by
the petitioner.

The two houses standing on the lots covered by Transfer Certificate of Title Nos. 21974 and
22846 are hereby declared to be co-owned by the petitioner and the respondent since these
were acquired during their marital union and since there is no prohibition on foreigners from
owning buildings and residential units. Petitioner and respondent are, thereby, directed to subject
this court for approval their project of partition on the two houses aforementioned.

The Court finds no sufficient justification to award the counterclaim of respondent for 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.

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. This was made evident by the sworn statements petitioner
17 

executed purporting to show that the subject parcels of land were purchased from the exclusive
funds of his wife, the herein respondent. Petitioner’s plea for reimbursement for the amount he
18 

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 one-half (1/2) of the value of what he had paid in the purchase of
the said properties, waiving the other half in favor of his estranged ex-wife.
19

On October 8, 2009, the CA promulgated a Decision affirming in toto the judgment rendered by
20 

the RTC of Negros Oriental, Branch 34. The CA stressed the fact that petitioner was "well-aware
of the constitutional prohibition for aliens to acquire lands in the Philippines." Hence, he cannot
21 

invoke equity to support his claim for reimbursement.

Consequently, petitioner filed the instant Petition for Review on Certiorari assailing the CA
Decision due to the following error:

UNDER THE FACTS ESTABLISHED, THE COURT ERRED IN NOT SUSTAINING THE
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. (Emphasis supplied)
22 

The Ruling of the Court

The petition lacks merit.

The issue to be resolved is not of first impression. In In Re: Petition For Separation of Property-
Elena Buenaventura Muller v. Helmut Muller the Court had already denied a claim for
23 

reimbursement of the value of purchased parcels of Philippine land instituted by a foreigner

Helmut Muller, against his former Filipina spouse, Elena Buenaventura Muller. It held that Helmut
Muller cannot seek reimbursement on the ground of equity where it is clear that he willingly and
knowingly bought the property despite the prohibition against foreign ownership of Philippine
land enshrined under Section 7, Article XII of the 1987 Philippine Constitution which reads:
24 

Section 7. Save in cases of hereditary succession, no private lands shall be transferred or

conveyed except to individuals, corporations, or associations qualified to acquire or hold lands of
the public domain.

Undeniably, petitioner openly admitted that he "is well aware of the above-cited constitutional
prohibition" and even asseverated that, because of such prohibition, he and respondent
25 

registered the subject properties in the latter’s name. Clearly, petitioner’s actuations showed his
26 

palpable intent to skirt the constitutional prohibition. On the basis of such admission, the Court
finds no reason why it should not apply the Muller ruling and accordingly, deny petitioner’s claim
for reimbursement.

As also explained in Muller, the time-honored principle is that he who seeks equity must do
equity, and he who comes into equity must come with clean hands. Conversely stated, he who
has done inequity shall not be accorded equity. Thus, a litigant may be denied relief by a court of
equity on the ground that his conduct has been inequitable, unfair and dishonest, or fraudulent,
or deceitful. 27

In this case, 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, he 28 

likewise claimed that his personal disability funds were used to acquire the same. Evidently,
these inconsistencies show his untruthfulness. Thus, as petitioner has come before the Court
with unclean hands, he is now precluded from seeking any equitable refuge.

In any event, the Court cannot, even on the grounds of equity, grant reimbursement to petitioner
given that he acquired no right whatsoever over the subject properties by virtue of its
unconstitutional purchase. It is well-established that equity as a rule will follow the law and will
not permit that to be done indirectly which, because of public policy, cannot be done
directly. Surely, a contract that violates the Constitution and the law is null and void, vests no
29 

rights, creates no obligations and produces no legal effect at all. Corollary thereto, under Article
30 

1412 of the Civil Code, petitioner cannot have the subject properties deeded to him or allow him
31 

to recover the money he had spent for the purchase thereof. The law will not aid either party to
an illegal contract or agreement; it leaves the parties where it finds them. Indeed, one cannot
32 

salvage any rights from an unconstitutional transaction knowingly entered into.

Neither can the Court grant petitioner’s claim for reimbursement on the basis of unjust
enrichment. As held in Frenzel v. Catito, a case also involving a foreigner seeking monetary
33 

reimbursement for money spent on purchase of Philippine land, the provision on unjust
enrichment does not apply if the action is proscribed by the Constitution, to wit:

Futile, too, is petitioner's reliance on Article 22 of the New Civil Code which reads:

Art. 22. Every person who through an act of performance by another, or any other means,
acquires or comes into possession of something at the expense of the latter without just or legal
ground, shall return the same to him. 1âwphi1

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." (Citations omitted)
34 

Nor would the denial of his claim amount to an injustice based on his foreign
citizenship. Precisely, it is the Constitution itself which demarcates the rights of citizens and non-
35 

citizens in owning Philippine land. To be sure, the constitutional ban against foreigners applies
only to ownership of Philippine land and not to the improvements built thereon, such as the two
(2) houses standing on Lots 1 and 2142 which were properly declared to be co-owned by the
parties subject to partition. Needless to state, the purpose of the prohibition is to conserve the
national patrimony and it is this policy which the Court is duty-bound to protect.
36 

WHEREFORE, the petition is DENIED. Accordingly, the assailed October 8, 2009 Decision and
January 24, 2011 Resolution of the Court of Appeals in CA-G.R. CV No. 01940 are AFFIRMED.
b. Void dispositions
Homeowners v Dailo, GR No. 153802, 11 Mar 2005

HOMEOWNERS SAVINGS & LOAN BANK, Petitioner,

vs.
MIGUELA C. DAILO, Respondents.

DECISION

TINGA, J.:

This is a petition for review on certiorari under Rule 45 of the Revised Rules of Court, assailing
the Decision1 of the Court of Appeals in CA-G.R. CV No. 59986 rendered on June 3, 2002, which
affirmed with modification the October 18, 1997 Decision2 of the Regional Trial Court, Branch 29,
San Pablo City, Laguna in Civil Case No. SP-4748 (97).

The following factual antecedents are undisputed.

Respondent Miguela C. Dailo and Marcelino Dailo, Jr. were married on August 8, 1967. During
their marriage, the spouses purchased a house and lot situated at Barangay San Francisco, San
Pablo City from a certain Sandra Dalida. The subject property was declared for tax assessment
purposes under Assessment of Real Property No. 94-051-2802. 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 knowledge and consent of
respondent.4

Upon maturity, the loan remained outstanding. As a result, petitioner instituted extrajudicial
foreclosure proceedings on the mortgaged property. After the extrajudicial sale thereof, a
Certificate of Sale was issued in favor of petitioner as the highest bidder. After the lapse of one
year without the property being redeemed, petitioner, through its vice-president, consolidated the
ownership thereof by executing on June 6, 1996 an Affidavit of Consolidation of Ownership and a
Deed of Absolute Sale.5

In the meantime, Marcelino Dailo, Jr. died on December 20, 1995. In one of her visits to the
subject property, respondent learned that petitioner had already employed a certain Roldan Brion
to clean its premises and that her car, a Ford sedan, was razed because Brion allowed a boy to
play with fire within the premises.

Claiming that she had no knowledge of the mortgage constituted on the subject property, which
was conjugal in nature, respondent instituted with the Regional Trial Court, Branch 29, San Pablo
City, Civil Case No. SP-2222 (97) for Nullity of Real Estate Mortgage and Certificate of Sale,
Affidavit of Consolidation of Ownership, Deed of Sale, Reconveyance with Prayer for Preliminary
Injunction and Damages against petitioner. In the latter’s Answer with Counterclaim, petitioner
prayed for the dismissal of the complaint on the ground that the property in question was the
exclusive property of the late Marcelino Dailo, Jr.
After trial on the merits, the trial court rendered a Decision on October 18, 1997. The dispositive
portion thereof reads as follows:

WHEREFORE, the plaintiff having proved by the preponderance of evidence the allegations of
the Complaint, the Court finds for the plaintiff and hereby orders:

ON THE FIRST CAUSE OF ACTION:

1. The declaration of the following documents as null and void:

(a) The Deed of Real Estate Mortgage dated December 1, 1993 executed before Notary Public
Romulo Urrea and his notarial register entered as Doc. No. 212; Page No. 44, Book No. XXI,
Series of 1993.

(b) The Certificate of Sale executed by Notary Public Reynaldo Alcantara on April 20, 1995.

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

(c) The Affidavit of Consolidation of Ownership executed by the defendant over the residential lot
located at Brgy. San Francisco, San Pablo City, covered by ARP No. 95-091-1236 entered as
Doc. No. 406; Page No. 83, Book No. III, Series of 1996 of Notary Public Octavio M. Zayas.

(d) The assessment of real property No. 95-051-1236.

2. The defendant is ordered to reconvey the property subject of this complaint to the plaintiff.

ON THE SECOND CAUSE OF ACTION

1. The defendant to pay the plaintiff the sum of ₱40,000.00 representing the value of the car
which was burned.

ON BOTH CAUSES OF ACTION

1. The defendant to pay the plaintiff the sum of ₱25,000.00 as attorney’s fees;

2. The defendant to pay plaintiff ₱25,000.00 as moral damages;

3. The defendant to pay the plaintiff the sum of ₱10,000.00 as exemplary damages;

4. To pay the cost of the suit.

The counterclaim is dismissed.

SO ORDERED.6

Upon elevation of the case to the Court of Appeals, the appellate court affirmed the trial court’s
finding that the subject property was conjugal in nature, in the absence of clear and convincing
evidence to rebut the presumption that the subject property acquired during the marriage of
spouses Dailo belongs to their conjugal partnership. 7 The appellate court declared as void the
mortgage on the subject property because it was constituted without the knowledge and consent
of respondent, in accordance with Article 124 of the Family Code. Thus, it upheld the trial 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 CO-OWNER THEREOF IS VALID AS TO HIS
UNDIVIDED SHARE.

2. WHETHER OR NOT THE CONJUGAL PARTNERSHIP IS LIABLE FOR THE PAYMENT OF

THE LOAN OBTAINED BY THE LATE MARCELINO DAILO, JR. THE SAME HAVING
REDOUNDED TO THE BENEFIT OF THE FAMILY.11

First, petitioner takes issue with the legal provision applicable to the factual milieu of this case. It
contends that Article 124 of the Family Code should be construed in relation to Article 493 of the
Civil Code, which states:

ART. 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits
pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute
another person in its enjoyment, except when personal rights are involved. But the effect of the
alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which
may be allotted to him in the division upon the termination of the co-ownership.

Article 124 of the Family Code provides in part:

ART. 124. The administration and enjoyment of the conjugal partnership property shall belong to
both spouses jointly. . . .

In the event that one spouse is incapacitated or otherwise unable to participate in the
administration of the conjugal properties, the other spouse may assume sole powers of
administration. These powers do not include the powers of disposition or encumbrance which
must have the authority of the court or the written consent of the other spouse. In the absence of
such authority or consent, the disposition or encumbrance shall be void. . . .

Petitioner argues that although Article 124 of the Family Code requires the consent of the other
spouse to the mortgage of conjugal properties, the framers of the law could not have intended to
curtail the right of a spouse from exercising full ownership over the portion of the conjugal
property pertaining to him under the concept of co-ownership. 12 Thus, petitioner would have this
Court uphold the validity of the mortgage to the extent of the late Marcelino Dailo, Jr.’s share in
the conjugal partnership.

In Guiang v. Court of Appeals,13 it was held that the sale of a conjugal property requires the
consent of both the husband and wife.14 In applying Article 124 of the Family Code, this Court
declared that the absence of the consent of one renders the entire sale null and void, including
the portion of the conjugal property pertaining to the husband who contracted the sale. The same
principle in Guiang squarely applies to the instant case. As shall be discussed next, there is no
legal basis to construe Article 493 of the Civil Code as an exception to Article 124 of the Family
Code.

Respondent and the late Marcelino Dailo, Jr. were married on August 8, 1967. In the absence of
a marriage settlement, the system of relative community or conjugal partnership of gains
governed the property relations between respondent and her late husband. 15 With the effectivity
of the Family Code on August 3, 1988, Chapter 4 on Conjugal Partnership of Gains in the Family
Code was made applicable to conjugal partnership of gains already established before its
effectivity unless vested rights have already been acquired under the Civil Code or other laws. 16
The rules on co-ownership do not even apply to the property relations of respondent and the late
Marcelino Dailo, Jr. even in a suppletory manner. The regime of conjugal partnership of gains is
a special type of partnership, where the husband and wife place in a common fund the proceeds,
products, fruits and income from their separate properties and those acquired by either or both
spouses through their efforts or by chance.17 Unlike the absolute community of property wherein
the rules on co-ownership apply in a suppletory manner,18 the conjugal partnership shall be
governed by the rules on contract of partnership in all that is not in conflict with what is expressly
determined in the chapter (on conjugal partnership of gains) or by the spouses in their marriage
settlements.19 Thus, the property relations of respondent and her late husband shall be governed,
foremost, by Chapter 4 on Conjugal Partnership of Gains of the Family Code and, suppletorily,
by the rules on partnership under the Civil Code. In case of conflict, the former prevails because
the Civil Code provisions on partnership apply only when the Family Code is silent on the matter.

The basic and established fact is that during his lifetime, without the knowledge and consent of
his wife, Marcelino Dailo, Jr. constituted a real estate mortgage on the subject property, which
formed part of their conjugal partnership. By express provision of Article 124 of the Family Code,
in the absence of (court) authority or written consent of the other spouse, any disposition or
encumbrance of the conjugal property shall be void.

The aforequoted provision does not qualify with respect to the share of the spouse who makes
the disposition or encumbrance in the same manner that the rule on co-ownership under Article
493 of the Civil Code does. Where the law does not distinguish, courts should not
distinguish.20 Thus, both the trial court and the appellate court are correct in declaring the nullity
of the real estate mortgage on the subject property for lack of 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 well-being of the family
as a unit.22

The burden of proof that the debt was contracted for the benefit of the conjugal partnership of
gains lies with the creditor-party litigant claiming as such. 23 Ei incumbit probatio qui dicit, non qui
negat (he who asserts, not he who denies, must prove).24 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.

Ravina v Villa Abrille, GR No. 160708, 16 Oct 2009

PATROCINIA RAVINA AND WILFREDO RAVINA, Petitioners,

vs.
MARY ANN P. VILLA ABRILLE, for herself and in behalf of INGRID D'LYN P. VILLA
ABRILLE, INGREMARK D'WIGHT VILLA ABRILLE, INGRESOLL DIELS VILLA ABRILLE
AND INGRELYN DYAN VILLA ABRILLE, Respondents.

DECISION

QUISUMBING, Acting C.J.:

For review are the Decision1 dated February 21, 2002 and the Resolution2 dated October 7, 2003
of the Court of Appeals in CA-G.R. CV No. 54560. The appellate court modified the
Decision3 dated September 26, 1995 of the Regional Trial Court (RTC) of Davao City, Branch 15.

Simply stated, the facts as found by the Court of Appeals 4 are as follows:

Respondent Mary Ann Pasaol Villa Abrille and Pedro Villa Abrille are husband and wife. They
have four children, who are also parties to the instant case and are represented by their mother,
Mary Ann.

In 1982, the spouses acquired a 555-square meter parcel of land denominated as Lot 7, located
at Kamuning Street, Juna Subdivision, Matina, Davao City, and covered by Transfer Certificate of
Title (TCT) No. T-88674 in their names. Said lot is adjacent to a parcel of land which Pedro
acquired when he was still single and which is registered solely in his name under TCT No. T-
26471.

Through their joint efforts and the proceeds of a loan from the Development Bank of the
Philippines (DBP), the spouses built a house on Lot 7 and Pedro’s lot. The house was finished in
the early 1980’s but the spouses continuously made improvements, including a poultry house
and an annex.

In 1991, Pedro got a mistress and began to neglect his family. Mary Ann was forced to sell or
mortgage their movables to support the family and the studies of her children. By himself, Pedro
offered to sell the house and the two lots to herein petitioners, Patrocinia and Wilfredo Ravina.
Mary Ann objected and notified the petitioners of her objections, but Pedro nonetheless sold the
house and the two lots without Mary Ann’s consent, as evidenced by a Deed of Sale 5 dated June
21, 1991. It appears on the said deed that Mary Ann did not sign on top of her name.

On July 5, 1991 while Mary Ann was outside the house and the four children were in school,
Pedro together with armed members of the Civilian Armed Forces Geographical Unit (CAFGU)
and acting in connivance with petitioners 6 began transferring all their belongings from the house
to an apartment.

When Mary Ann and her daughter Ingrid Villa Abrille came home, they were stopped from
entering it. They waited outside the gate until evening under the rain. They sought help from the
Talomo Police Station, but police authorities refused to intervene, saying that it was a family
matter. Mary Ann alleged that the incident caused stress, tension and anxiety to her children, so
much so that one flunked at school. Thus, respondents Mary Ann and her children filed a
complaint for Annulment of Sale, Specific Performance, Damages and Attorney’s Fees with
Preliminary Mandatory Injunction7 against Pedro and herein petitioners (the Ravinas) in the RTC
of Davao City.

During the trial, Pedro declared that the house was built with his own money. Petitioner
Patrocinia Ravina testified that they bought the house and lot from Pedro, and that her husband,
petitioner Wilfredo Ravina, examined the titles when they bought the property.

On September 26, 1995, the trial court ruled in favor of herein respondent Mary Ann P. Villa
Abrille as follows:

WHEREFORE, judgment is rendered as follows:

1. The sale of lot 8 covered by TCT No. 26471 by defendant Pedro Abrille appearing in
the Deed of Sale marked as Exh. "E" is void as to one half or 277.5 square meters
representing the share of plaintiff Mary Villa Abrille.

2. That sale of Lot 7 covered by TCT No. [88674] by defendant Pedro Villa Abrille in the
Deed of Sale (Exh. "A") is valid as to one half or 277.5 square meters of the 555 square
meters as one half belongs to defendant Pedro Abrille but it is void as to the other half or
277.5 square meters as it belongs to plaintiff Mary Abrille who did not sell her share nor
give her consent to the sale.

3. That sale of the house mentioned in the Deed of Sale (Exh. "A") is valid as far as the
one half of the house representing the share of defendant Pedro Abrille is concerned but
void as to the other half which is the share of plaintiff Mary Abrille because she did not
give her consent/sign the said sale.

4. The defendants shall jointly pay the plaintiffs.

4. A. Seventeen Thousand Pesos (₱17,000.00) representing the value of the

movables and belonging[s] that were lost when unknown men unceremoniously
and without their knowledge and consent removed their movables from their
house and brought them to an apartment.

4. B. One Hundred Thousand Pesos (₱ 100,000.00) to plaintiff Mary Abrille as

moral damages.

4. C. Fifty Thousand Pesos (₱50,000.00) to each of the four children as moral

damages, namely:

a) Ingrid Villa Abrille – Fifty Thousand Pesos (₱50,000.00), b) Ingremark Villa

Abrille – Fifty Thousand Pesos (₱50,000.00), c) Ingresoll Villa Abrille – Fifty
Thousand Pesos (₱50,000.00) and d) Ingrelyn Villa Abrille – Fifty Thousand
Pesos (₱50,000.00).

5. Ten Thousand Pesos (₱10,000.00) as exemplary damages by way of example and

correction for the public good.

6. The costs of suit.8

On appeal, the Court of Appeals modified the decision, thus:

WHEREFORE, the appealed judgment is hereby MODIFIED as follows:

1. The sale of lot covered by TCT No. 26471 in favor of defendants spouses Wilfredo and
Patrocinia Ravina is declared valid.

2. The sale of lot covered by TCT No. 88674 in favor of said defendants spouses Ravina,
together with the house thereon, is declared null and void.

3. Defendant Pedro Abrille is ordered to return the value of the consideration for the lot

covered by TCT No. 88674 and the house thereon to co-defendants spouses Ravina.

4. Defendants spouses Ravina [a]re ordered to reconvey the lot and house covered by
TCT No. 88674 in favor of spouses Pedro and Mary Villa Abrille and to deliver
possession to them.

5. Plaintiffs are given the option to exercise their rights under Article [450] of the New
Civil Code with respect to the improvements introduced by defendant spouses Ravina.

6. Defendants Pedro Villa Abrille and spouses Ravina are ordered to pay jointly and
severally the plaintiffs as follows:

a) One Hundred Thousand Pesos (₱100,000.00) to plaintiff Mary Villa Abrille as

moral damages.

b) Fifty Thousand Pesos (₱50,000.00) as moral damages to each of the four

children, namely: Ingrid Villa Abrille, Ingremark Villa Abrille, Ingresoll Villa Abrille
and Ingrelyn Villa Abrille.

c) Ten Thousand (₱10,000.00) as exemplary damages by way of example and

correction for the public good.

SO ORDERED.9

Their Motion for Reconsideration having been denied, petitioners filed this petition. Petitioners
argue that:

I.

THE COURT OF APPEALS ERRED WHEN IT DECLARED x x x THE SALE OF LOT COVERED
BY TCT NO. 88674 IN FAVOR OF SPOUSES RAVINA, TOGETHER WITH THE HOUSE
THEREON, AS NULL AND VOID SINCE IT IS CLEARLY CONTRARY TO LAW AND
EVIDENCE.

II.

THE COURT OF APPEALS ERRED WHEN IT RULED THAT PETITIONERS PATROCIN[I]A

RAVINA AND WILFREDO RAVINA ARE NOT INNOCENT PURCHASERS FOR VALUE, THE
SAME BEING CONTRARY TO LAW AND EVIDENCE.

III.

THE COURT OF APPEALS ERRED WHEN IT RULED THAT PETITIONERS PATROCIN[I]A

RAVINA AND WILFREDO RAVINA ARE LIABLE FOR DAMAGES, THE SAME BEING
CONTRARY TO LAW AND EVIDENCE.10
In essence, petitioners assail the appellate court’s declaration that the sale to them by Pedro of
the lot covered by TCT No. T-88674 is null and void. However, in addressing this issue, it is
imperative to determine: (1) whether the subject property covered by TCT No. T-88674 is an
exclusive property of Pedro or conjugal property, and (2) whether its sale by Pedro was valid
considering the absence of Mary Ann’s consent.

Petitioners assert that the subject lot covered by TCT No. T-88674 was the exclusive property of
Pedro having been acquired by him through barter or exchange. 11 They allege that the subject lot
was acquired by Pedro with the proceeds of the sale of one of his exclusive properties. Allegedly,
Pedro and his sister Carmelita initially agreed to exchange their exclusive lots covered by TCT
No. T-26479 and TCT No. T-26472, respectively. Later, however, Pedro sold the lot covered by
TCT No. T-26472 to one Francisca Teh Ting and purchased the property of Carmelita using the
proceeds of the sale. A new title, TCT No. T-88674, was issued thereafter. Thus, petitioners
insist that the subject lot remains to be an exclusive property of Pedro as it was acquired or
purchased through the exclusive funds or money of the latter.

We are not persuaded. Article 160 of the New Civil Code provides, "All property of the marriage
is presumed to belong to the conjugal partnership, unless it be proved that it pertains exclusively
to the husband or to the wife."

There is no issue with regard to the lot covered by TCT No. T-26471, which was an exclusive
property of Pedro, having been acquired by him before his marriage to Mary Ann. However, the
lot covered by TCT No. T-88674 was acquired in 1982 during the marriage of Pedro and Mary
Ann. No evidence was adduced to show that the subject property was acquired through
exchange or barter. The presumption of the conjugal nature of the property subsists in the
absence of clear, satisfactory and convincing evidence to overcome said presumption or to prove
that the subject property is exclusively owned by Pedro. 12 Petitioners’ bare assertion would not
suffice to overcome the presumption that TCT No. T-88674, acquired during the marriage of
Pedro and Mary Ann, is conjugal. Likewise, the house built thereon is conjugal property, having
been constructed through the joint efforts of the spouses, who had even obtained a loan from
DBP to construct the house. 1avvphi1

Significantly, a sale or encumbrance of conjugal property concluded after the effectivity of the
Family Code on August 3, 1988, is governed by Article 124 of the same Code that now treats
such a disposition to be void if done (a) without the consent of both the husband and the wife, or
(b) in case of one spouse’s inability, the authority of the court. Article 124 of the Family Code, the
governing law at the time the assailed sale was contracted, is explicit:

ART. 124. The administration and enjoyment of the conjugal partnership property shall belong to
both spouses jointly. In case of disagreement, the 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 the powers of disposition or encumbrance which
must have the authority of the court or the written consent of the other spouse. In the absence of
such authority or consent, the disposition or encumbrance shall be void. However, the
transaction shall be construed as a continuing offer on the part of the consenting spouse and the
third person, and may be perfected as a binding contract upon the acceptance by the other
spouse or authorization by the court before the offer is withdrawn by either or both offerors.
(Emphasis supplied.)

The particular provision in the New Civil Code giving the wife ten (10) years to annul the
alienation or encumbrance was not carried over to the Family Code. It is thus clear that alienation
or encumbrance of the conjugal partnership property by the husband without the consent of the
wife is null and void.

Hence, just like the rule in absolute community of property, if the husband, without knowledge
and consent of the wife, sells conjugal property, such sale is void. If the sale was with the
knowledge but without the approval of the wife, thereby resulting in a disagreement, such sale is
annullable at the instance of the wife who is given five (5) years from the date the contract
implementing the decision of the husband to institute the case. 13

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

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

The contention is bereft of merit. As correctly held by the Court of Appeals, a purchaser in good
faith is one who buys the property of another without notice that some other person has a right
to, or interest in, such property and pays a full and fair price for the same at the time of such
purchase, or before he has notice of the claim or interest of some other person in the
property.15 To establish his status as a buyer for value in good faith, a person dealing with land
registered in the name of and occupied by the seller need only show that he relied on the face of
the seller’s certificate of title. But for a person dealing with land registered in the name of and
occupied by the seller whose capacity to sell is restricted, such as by Articles 166 and 173 of the
Civil Code or Article 124 of the Family Code, he must show that he inquired into the latter’s
capacity to sell in order to establish himself as a buyer for value in good faith. 16
1avvphi1

In the present case, the property is registered in the name of Pedro and his wife, Mary Ann.
Petitioners cannot deny knowledge that during the time of the sale in 1991, Pedro was married to
Mary Ann. However, Mary Ann’s conformity did not appear in the deed. Even assuming that
petitioners believed in good faith that the subject property is the exclusive property of Pedro, they
were apprised by Mary Ann’s lawyer of her objection to the sale and yet they still proceeded to
purchase the property without Mary Ann’s written consent. Moreover, the respondents were the
ones in actual, visible and public possession of the property at the time the transaction was being
made. Thus, at the time of sale, petitioners knew that Mary Ann has a right to or interest in the
subject properties and yet they failed to obtain her conformity to the deed of sale. Hence,
petitioners cannot now invoke the protection accorded to purchasers in good faith.

Now, if a voidable contract is annulled, the restoration of what has been given is proper. The
relationship between the parties in any contract even if subsequently annulled must always be
characterized and punctuated by good faith and fair dealing. 17 Hence, in consonance with justice
and equity and the salutary principle of non-enrichment at another’s expense, we sustain the
appellate court’s order directing Pedro to return to petitioner spouses the value of the
consideration for the lot covered by TCT No. T-88674 and the house thereon.

However, this court rules that petitioners cannot claim reimbursements for improvements they
introduced after their good faith had ceased. As correctly found by the Court of Appeals,
petitioner Patrocinia Ravina made improvements and renovations on the house and lot at the
time when the complaint against them was filed. Ravina continued introducing improvements
during the pendency of the action. 18

Thus, Article 449 of the New Civil Code is applicable. It provides that, "(h)e who builds, plants or
sows in bad faith on the land of another, loses what is built, planted or sown without right to
indemnity."19
 On the last issue, petitioners claim that the decision awarding damages to respondents is not
supported by the evidence on record.20

The claim is erroneous to say the least. The manner by which respondent and her children were
removed from the family home deserves our condemnation. On July 5, 1991, while respondent
was out and her children were in school, Pedro Villa Abrille acting in connivance with the
petitioners21 surreptitiously transferred all their personal belongings to another place. The
respondents then were not allowed to enter their rightful home or family abode despite their
impassioned pleas.

Firmly established in our civil law is the doctrine that: "Every person must, in the exercise of his
rights and in the performance of his duties, act with justice, give everyone his due, and observe
honesty and good faith."22 When a right is exercised in a manner that does not conform with such
norms and results in damages to another, a legal wrong is thereby committed for which the
wrong doer must be held responsible. Similarly, any person who willfully causes loss or injury to
another in a manner that is contrary to morals, good customs or public policy shall compensate
the latter for the damages caused.23 It is patent in this case that petitioners’ alleged acts fall short
of these established civil law standards.

WHEREFORE, we deny the instant petition for lack of merit. The Decision dated February 21,
2002 and the Resolution dated October 7, 2003 of the Court of Appeals in CA-G.R. CV No.
54560 are AFFIRMED.

Costs against petitioners.

Fuentes vs Roca, GR No. 178902, 21 April 2010

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

vs.
CONRADO G. ROCA, ANNABELLE R. JOSON, ROSE MARIE R. CRISTOBAL and PILAR
MALCAMPO, Respondents.

DECISION

ABAD, J.:

This case is about a 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 358-square meter lot in Canelar, Zamboanga City. On October 11,
1982 she sold it to her son, Tarciano T. Roca (Tarciano) under a deed of absolute sale. 1 But
Tarciano did not for the meantime have the registered title transferred to his name.

Six years later in 1988, Tarciano offered to sell the lot to petitioners Manuel and Leticia Fuentes
(the Fuentes spouses). They arranged to meet at the office of Atty. Romulo D. Plagata whom
they asked to prepare the documents of sale. They later signed an agreement to sell that Atty.
Plagata prepared2 dated April 29, 1988, which agreement expressly stated that it was to take
effect in six months.

The agreement required the Fuentes spouses to pay Tarciano a down payment of ₱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 lawyer, he went to see Rosario in one of his trips to
Manila and had her sign an affidavit of consent.3 As soon as Tarciano met the other conditions,
Atty. Plagata notarized 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 four-year
prescriptive period for nullifying the sale on ground of fraud had already lapsed.

Both the Rocas and the Fuentes spouses presented handwriting experts at the trial. Comparing
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 consent 15 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.

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

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 shall fix the terms thereof. (361a)

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

WHEREFORE, the Court DENIES the petition and AFFIRMS WITH MODIFICATION the decision
of the Court of Appeals in CA-G.R. CV 00531 dated February 27, 2007 as follows:

1. The deed of sale dated January 11, 1989 that Tarciano T. Roca executed in favor of
Manuel O. Fuentes, married to Leticia L. Fuentes, as well as the Transfer Certificate of
Title T-90,981 that the Register of Deeds of Zamboanga City issued in the names of the
latter spouses pursuant to that deed of sale are DECLARED void;

2. The Register of Deeds of Zamboanga City is DIRECTED to reinstate Transfer

Certificate of Title 3533 in the name of Tarciano T. Roca, married to Rosario Gabriel;
 3. Respondents Gonzalo G. Roca, Annabelle R. Joson, Rose Marie R. Cristobal, and
Pilar Malcampo are ORDERED to pay petitioner spouses Manuel and Leticia Fuentes the
₱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 determine the amount of indemnity to which petitioner spouses Manuel and
Leticia Fuentes are entitled.

Uy vs CA, GR No. 109557, 29 Nov 2000

JOSE UY and his Spouse GLENDA J. UY and GILDA L. JARDELEZA, petitioners,

vs.
COURT OF APPEALS and TEODORO L. JARDELEZA, respondents.

DECISION

PARDO, J.:

The case is an appeal via certiorari from the decision of the Court of Appeals and its resolution
1 

denying reconsideration reversing that of the Regional Trial Court, Iloilo, Branch 32 and
2  3 

declaring void the special proceedings instituted therein by petitioners to authorize petitioner
Gilda L. Jardeleza, in view of the comatose condition of her husband, Ernesto Jardeleza, Sr.,
with the approval of the court, to dispose of their conjugal property in favor of co-petitioners, their
daughter and son in law, for the ostensible purpose of "financial need in the personal, business
and medical expenses of her ‘incapacitated’ husband."

The facts, as found by the Court of Appeals, are as follows:

"This case is a dispute between Teodoro L. Jardeleza (herein respondent) on the one hand,
against his mother Gilda L. Jardeleza, and sister and brother-in-law, the spouses Jose Uy and
Glenda Jardeleza (herein petitioners) on the other hand. The controversy came about as a result
of Dr. Ernesto Jardeleza, Sr.’s suffering of a stroke on March 25, 1991, which left him comatose
and bereft of any motor or mental faculties. Said Ernesto Jardeleza, Sr. is the father of herein
respondent Teodoro Jardeleza and husband of herein private respondent Gilda Jardeleza.

"Upon learning that one piece of real property belonging to the senior Jardeleza spouses was
about to be sold, petitioner Teodoro Jardeleza, on June 6, 1991, filed a petition (Annex "A")
before the R.T.C. of Iloilo City, Branch 25, where it was docketed as Special Proceeding No.
4689, in the matter of the guardianship of Dr. Ernesto Jardeleza, Sr. The petitioner averred
therein that the present physical and mental incapacity of Dr. Ernesto Jardeleza, Sr. prevent him
from competently administering his properties, and in order to prevent the loss and dissipation of
the Jardelezas’ real and personal assets, there was a need for a court-appointed guardian to
administer said properties. It was prayed therein that Letters of Guardianship be issued in favor
of herein private respondent Gilda Ledesma Jardeleza, wife of Dr. Ernesto Jardeleza, Sr. It was
further prayed that in the meantime, no property of Dr. Ernesto Jardeleza, Sr. be negotiated,
mortgaged or otherwise alienated to third persons, particularly Lot No. 4291 and all the
improvements thereon, located along Bonifacio Drive, Iloilo City, and covered by T.C.T. No.
47337.

"A few days later, or on June 13, 1991, respondent Gilda L. Jardeleza herself filed a petition
docketed as Special Proceeding NO. 4691, before Branch 32 of the R.T.C. of Iloilo City,
regarding the declaration of incapacity of Ernesto Jardeleza, Sr., assumption of sole powers of
administration of conjugal properties, and authorization to sell the same (Annex "B"). Therein, the
petitioner Gilda L. Jardeleza averred the physical and mental incapacity of her husband, who
was then confined for intensive medical care and treatment at the Iloilo Doctor’s Hospital. She
signified to the court her desire to assume sole powers of administration of their conjugal
properties. She also alleged that her husband’s medical treatment and hospitalization expenses
were piling up, accumulating to several hundred thousands of pesos already. For this, she
urgently needed to sell one piece of real property, specifically Lot No. 4291 and its
improvements. Thus, she prayed for authorization from the court to sell said property.

"The following day, June 14, 1991, Branch 32 of the R.T.C. of Iloilo City issued an Order (Annex
"C") finding the petition in Spec. Proc. No. 4691 to be sufficient in form and substance, and
setting the hearing thereof for June 20, 1991. The scheduled hearing of the petition proceeded,
attended by therein petitioner Gilda Jardeleza, her counsel, her two children, namely Ernesto
Jardeleza, Jr., and Glenda Jardeleza Uy, and Dr. Rolando Padilla, one of Ernesto Jardeleza,
Sr.’s attending physicians.

"On that same day, June 20, 1991, Branch 32 of the RTC of Iloilo City rendered its Decision
(Annex "D"), finding that it was convinced that Ernesto Jardeleza, Sr. was truly incapacitated to
participate in the administration of the conjugal properties, and that the sale of Lot No. 4291 and
the improvements thereon was necessary to defray the mounting expenses for treatment and
Hospitalization. The said court also made the pronouncement that the petition filed by Gilda L.
Jardeleza was "pursuant to Article 124 of the Family Code, and that the proceedings thereon are
governed by the rules on summary proceedings sanctioned under Article 253 of the same Code
x x x.

"The said court then disposed as follows:

"WHEREFORE, there being factual and legal bases to the petition dated June 13, 1991, the
Court hereby renders judgment as follows:

"1) declaring Ernesto Jardeleza, Sr., petitioner’s husband, to be incapacitated and unable to
participate in the administration of conjugal properties;

"2) authorizing petitioner Gilda L. Jardeleza to assume sole powers of administration of their
conjugal properties; and

"3) authorizing aforesaid petitioner to sell Lot No. 4291 of the Cadastral Survey of Iloilo, situated
in Iloilo City and covered by TCT No. 47337 issued in the names of Ernesto Jardeleza, Sr. and
Gilda L. Jardeleza and the buildings standing thereof.

"SO ORDERED.

"On June 24, 1991, herein petitioner Teodoro Jardeleza filed his Opposition to the proceedings
before Branch 32 in Spec. Proc. Case No. 4691, said petitioner being unaware and not knowing
that a decision has already been rendered on the case by public respondent.

"On July 3, 1991, herein petitioner Teodoro Jardeleza filed a motion for reconsideration of the
judgment in Spec. Proc. No. 4691 and a motion for consolidation of the two cases (Annex "F").
He propounded the argument that the petition for declaration of incapacity, assumption of sole
powers of administration, and authority to sell the conjugal properties was essentially a petition
for guardianship of the person and properties of Ernesto Jardeleza, Sr. As such, it cannot be
prosecuted in accordance with the provisions on summary proceedings set out in Article 253 of
the Family Code. It should follow the rules governing special proceedings in the Revised Rules of
Court which require procedural due process, particularly the need for notice and a hearing on the
merits. On the other hand, even if Gilda Jardeleza’s petition can be prosecuted by summary
proceedings, there was still a failure to comply with the basic requirements thereof, making the
decision in Spec. Proc. No. 4691 a defective one. He further alleged that under the New Civil
Code, Ernesto Jardeleza, Sr. had acquired vested rights as a conjugal partner, and that these
rights cannot be impaired or prejudiced without his consent. Neither can he be deprived of his
share in the conjugal properties through mere summary proceedings. He then restated his
position that Spec. Proc. No. 4691 should be consolidated with Spec. Proc. No. 4689 which was
filed earlier and pending before Branch 25.

"Teodoro Jardeleza also questioned the propriety of the sale of Lot No. 4291 and the
improvements thereon supposedly to pay the accumulated financial obligations arising from
Ernesto Jardeleza, Sr.’s hospitalization. He alleged that the market value of the property would
be around Twelve to Fifteen Million Pesos, but that he had been informed that it would be sold
for much less. He also pointed out that the building thereon which houses the Jardeleza Clinic is
a monument to Ernesto Jardeleza Sr.’s industry, labor and service to his fellowmen. Hence, the
said property has a lot of sentimental value to his family. Besides, argued Teodoro Jardeleza,
then conjugal partnership had other liquid assets to pay off all financial obligations. He
mentioned that apart from sufficient cash, Jardeleza, Sr. owned stocks of Iloilo Doctors’ Hospital
which can be off-set against the cost of medical and hospital bills. Furthermore, Ernesto
Jardeleza, Sr. enjoys certain privileges at the said hospital which allows him to pay on installment
basis. Moreover, two of Ernesto Jardeleza Sr.’s attending physicians are his own sons who do
not charge anything for their professional services.

"On July 4, 1991, Teodoro Jardeleza filed in Spec. Proc. No. 4691 a supplement to his motion for
reconsideration (Annex "G"). He reiterated his contention that summary proceedings was
irregularly applied. He also noted that the provisions on summary proceedings found in Chapter
2 of the Family Code comes under the heading on "Separation in Fact Between Husband and
Wife" which contemplates of a situation where both spouses are of disposing mind. Thus, he
argued that were one spouse is "comatose without motor and mental faculties," the said
provisions cannot be made to apply.

"While the motion for reconsideration was pending, Gilda Jardeleza disposed by absolute sale
Lot No. 4291 and all its improvements to her daughter, Ma. Glenda Jardeleza Uy, for Eight
Million Pesos (P8,000,000.00), as evidenced by a Deed Absolute Sale dated July 8, 1991
executed between them (p. 111, Rollo). Under date of July 23, 1991, Gilda Jardeleza filed an
urgent ex-parte motion for approval of the deed of absolute sale.

"On August 12, 1991 Teodoro Jardeleza filed his Opposition to the motion for approval of the
deed of sale on the grounds that: (1) the motion was prematurely filed and should be held in
abeyance until the final resolution of the petition; (2) the motion does not allege nor prove the
justifications for the sale; and (3) the motion does not allege that had Ernesto Jardeleza, Sr. been
competent, he would have given his consent to the sale.

"Judge Amelita K. del Rosario-Benedicto of Branch 32 of the respondent Court, who had penned
the decision in Spec. Proc. No. 4691 had in the meantime formally inhibited herself from further
acting in this case (Annex "I"). The case was then reraffled to Branch 28 of the said court.

"On December 19, 1991, the said court issued an Order (Annex "M") denying herein petitioner’s
motion for reconsideration and approving respondent Jardeleza’s motion for approval of the deed
of absolute sale. The said court ruled that:
"After a careful and thorough perusal of the decision, dated June 20, 1991, the Motion for
Reconsideration, as well as its supplements filed by "oppositor", Teodoro L. Jardeleza, through
counsel, and the opposition to the Motion for Reconsideration, including its supplements, filed by
petitioner, through counsel, this Court is of the opinion and so holds, that her Honor, Amelita K.
del Rosario-Benedicto, Presiding Judge of Branch 32, of this Court, has properly observed the
procedure embodied under Article 253, in relation to Article 124, of the Family Code, in rendering
her decision dated June 20, 1991.

"Also, as correctly stated by petitioner, through counsel, that "oppositor" Teodor L. Jardeleza
does not have the personality to oppose the instant petition considering that the property or
properties, subject of the petition, belongs to the conjugal partnership of the spouses Ernesto
and Gilda Jardeleza, who are both still alive.

"In view thereof, the Motion for Reconsideration of "oppositor" Teodoro L. Jardeleza, is hereby
denied for lack of merit.

"Considering the validity of the decision dated June 20, 1991, which among others, authorized
Gilda L. Jardeleza to sell Lot No. 4291 of the Cadastral Survey of Iloilo, covered by Transfer
Certificate of Title No. 47337 issued in the names of Ernesto Jardeleza, Sr., and Gilda L.
Jardeleza and the building standing thereon, the Urgent Ex-Parte Motion for Approval of Deed of
Absolute Sale dated July 23, 1991, filed by petitioner, through counsel, is hereby granted and the
deed of absolute sale, executed and notarized on July 8, 1991, by and between Gilda L.
Jardeleza, as vendor, and Ma. Glenda Jardeleza, as vendee, is hereby approved, and the
Register of Deeds of Iloilo City, is directed to register the sale and issue the corresponding
transfer certificate of title to the vendee.

"SO ORDERED." 4

On December 9, 1992, the Court of Appeals promulgated its decision reversing the appealed
decision and ordering the trial court to dismiss the special proceedings to approve the deed of
sale, which was also declared void. 5

On December 29, 1992, petitioners filed a motion for reconsideration, however, on March 29,
6 

1993, the Court of Appeals denied the motion, finding no cogent and compelling reason to
disturb the decision. 7

Hence, this appeal. 8

The issue raised is whether petitioner Gilda L. Jardeleza as the wife of Ernesto Jardeleza, Sr.
who suffered a stroke, a cerebrovascular accident, rendering him comatose, without motor and
mental faculties, and could not manage their conjugal partnership property may assume sole
powers of administration of the conjugal property under Article 124 of the Family Code and
dispose of a parcel of land with its improvements, worth more than twelve million pesos, with the
approval of the court in a summary proceedings, to her co-petitioners, her own daughter and
son-in-law, for the amount of eight million pesos.

The Court of Appeals ruled that in the condition of Dr. Ernesto Jardeleza, Sr., the procedural
rules on summary proceedings in relation to Article 124 of the Family Code are not applicable.
Because Dr. Jardeleza, Sr. was unable to take care of himself and manage the conjugal property
due to illness that had rendered him comatose, the proper remedy was the appointment of a
judicial guardian of the person or estate or both of such incompetent, under Rule 93, Section 1,
1964 Revised Rules of Court. Indeed, petitioner earlier had filed such a petition for judicial
guardianship.

Article 124 of the Family Code provides as follows:

"ART. 124. The administration and enjoyment of the conjugal partnership property shall belong to
both spouses jointly. In case of disagreement, the husband’s decision shall prevail, subject to
recourse to the court by the wife for a proper remedy which must be availed of within five years
from the date of the contract implementing such decision.

"In the event that one spouse is incapacitated or otherwise unable to participate in the
administration of the conjugal properties, the other spouse may assume sole powers of
administration. These powers do not include the powers of disposition or encumbrance which
must have the authority of the court or the written consent of the other spouse. In the absence of
such authority or consent, the disposition or encumbrance shall be void. However, the
transaction shall be construed as a continuing offer on the part of the consenting spouse and the
third person, and may be perfected as a binding contract upon the acceptance by the other
spouse or authorization by the court before the offer is withdrawn by either or both offerors.
(165a)."

In regular manner, the rules on summary judicial proceedings under the Family Code govern the
proceedings under Article 124 of the Family Code. The situation contemplated is one where the
spouse is absent, or separated in fact or has abandoned the other or consent is withheld or
cannot be obtained. Such rules do not apply to cases where the non-consenting spouse is
incapacitated or incompetent to give consent. In this case, the trial court found that the subject
spouse "is an incompetent" who was in comatose or semi-comatose condition, a victim of stroke,
cerebrovascular accident, without motor and mental faculties, and with a diagnosis of brain stem
infarct. In such case, the proper remedy is a judicial guardianship proceedings under Rule 93 of
9 

the 1964 Revised Rules of Court.

Even assuming that the rules of summary judicial proceedings under the Family Code may apply
to the wife's administration of the conjugal property, the law provides that the wife who assumes
sole powers of administration has the same powers and duties as a guardian under the Rules of
Court.10

Consequently, a spouse who desires to sell real property as such administrator of the conjugal
property must observe the procedure for the sale of the ward’s estate required of judicial
guardians under Rule 95, 1964 Revised Rules of Court, not the summary judicial proceedings
under the Family Code.

In the case at bar, the trial court did not comply with the procedure under the Revised Rules of
Court.  Indeed, the trial court did not even observe the requirements of the summary judicial
1âwphi1

proceedings under the Family Code. Thus, the trial court did not serve notice of the petition to the
incapacitated spouse; it did not require him to show cause why the petition should not be
granted.

Hence, we agree with the Court of Appeals that absent an opportunity to be heard, the decision
rendered by the trial court is void for lack of due process. The doctrine consistently adhered to by
this Court is that a denial of due process suffices to cast on the official act taken by whatever
branch of the government the impress of nullity. A decision rendered without due process is
11 

void ab initio and may be attacked directly or collaterally. "A decision is void for lack of due
12 

process if, as a result, a party is deprived of the opportunity of being heard." "A void decision
13 

may be assailed or impugned at any time either directly or collaterally, by means of a separate
action, or by resisting such decision in any action or proceeding where it is invoked."
14

WHEREFORE, the Court AFFIRMS the decision of the Court of Appeals in CA-G. R. SP No.
26936, in toto.

Costs against petitioners.

Heirs of Spouses Go,Sr. v Servacio, GR No. 157537, Sept 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.

DECISION

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
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 square-meter
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 reconsideration13 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 extra-judicially 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 co-ownership was governed by
Article 493 of the Civil Code,17 to wit:

Article 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits
pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute
another person in its enjoyment, except when personal rights are involved. But the effect of the
alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which
may be allotted to him in the division upon the termination of the co-ownership. (399)

Protacio, Sr., although becoming a co-owner 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 co-owner 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 co-owners. 19 Consequently, the sale
by Protacio, Sr. and Rito as co-owners without the consent of the other co-owners was not
necessarily void, for the rights of the selling co-owners 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 Bailon-Casilao v. Court of Appeals,23 to wit:

From the foregoing, it may be deduced that since a co-owner is entitled to sell his undivided
share, a sale of the entire property by one

co-owner without the consent of the other co-owners is not null and void. However, only the
rights of the co-owner-seller are transferred, thereby making the buyer a co-owner 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 co-owner or
co-owners who alienated their shares, but the DIVISION of the common property as if it
continued to remain in the possession of the co-owners who possessed and administered it
[Mainit v. Bandoy, supra]. 1avvphi1

Thus, it is now settled that the appropriate recourse of co-owners 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 co-owners 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 co-heirs 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.  But if it turns out
1âwphi1

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.,L-
11764, 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.

c. Conversion
Calimlim-Canullas vs Fartun, supra
Munos v Ramirez, GR No. 156125, 25 Aug 2010

FRANCISCO MUÑOZ, JR., Petitioner,

vs.
ERLINDA RAMIREZ and ELISEO CARLOS, Respondents.

DECISION

BRION, J.:

We resolve the present petition for review on certiorari1 filed by petitioner Francisco Muñoz, Jr.
(petitioner) to challenge the decision 2 and the resolution3 of the Court of Appeals (CA) in CA-G.R.
CV No. 57126.4 The CA decision set aside the decision5 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 seventy-seven (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 thirty-six (36)-square meter, two-story
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 attorney-in-
fact 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 one-year
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
case16 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

In the RTC, the respondents presented the results of the scientific examination 18 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 158 23 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 Calimlim-Canullas28 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
Calimlim-Canullas.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 Calimlim-
Canullas,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 Calimlim-Canullas

We cannot subscribe to the CA’s misplaced reliance on Article 158 of the Civil Code and
Calimlim-Canullas.

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:

xxxx

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.

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 owner-spouse at the time of the improvement;
otherwise, said property shall be retained in ownership by the owner-spouse, likewise subject to
reimbursement of the cost of the improvement. 41

In the present case, we find that Eliseo paid a portion only of the GSIS loan through monthly
salary deductions. From April 6, 1989 42 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 one-year 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 CA-G.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.

d. Liability
Sps. Fortaleza v. Sps. Lapitan, GR No. 178288, 8/15/2012 – ART 121. Liens/Mortg.

SPOUSES CHARLIE FORTALEZA and OFELIA FORTALEZA, Petitioners,

vs.
SPOUSES RAUL LAPITAN and RONA LAPITAN, Respondents.

DECISION

DEL CASTILLO, J.:

Unless a case falls under recognized exceptions provided by law and jurisprudence, courts
should maintain the ex parte, non-adversarial, summary and ministerial nature of the issuance of
a writ of possession.

Assailed in this Petition for Review on Certiorari under Rule 45 of the Rules of Court is the
1 

Decision of the Court of Appeals (CA) dated January 10, 2007 in CA-G.R. CV No. 86287 which
2 

affirmed the Order of the Regional Trial Court (RTC) of Calamba City Branch 35, dated
3 

September 16, 2005 in SLRC Case No. 2528-2004-C granting an ex parte petition for the
issuance of writ of possession. Likewise assailed is the CA Resolution dated June 6, 2007 which
4 

denied the Motion for Reconsideration of the said assailed Decision.

5 

Factual Antecedents

Spouses Charlie and Ofelia Fortaleza (spouses Fortaleza) obtained a loan from spouses
Rolando and Amparo Lapitan (creditors) in the amount of P1.2 million subject to 34% interest per
annum. As security, spouses Fortaleza executed on January 28, 1998 a Deed of Real Estate
Mortgage over their residential house and lot situated in Barrio Anos, Municipality of Los Baños,
6 

Laguna (subject property) registered under Transfer Certificate of Title (TCT) No. T-412512. 7
When spouses Fortaleza failed to pay the indebtedness including the interests and penalties, the
creditors applied for extrajudicial foreclosure of the Real Estate Mortgage before the Office of the
Clerk of Court and Ex-Officio Sheriff of Calamba City. The public auction sale was set on May 9,
2001.

At the sale, the creditors’ son Dr. Raul Lapitan and his wife Rona (spouses Lapitan) emerged as
the highest bidders with the bid amount of P2.5 million. Then, they were issued a Certificate of
Sale which was registered with the Registry of Deeds of Calamba City and annotated at the back
8 

of TCT No. T-412512 under Entry No. 615683 on November 15, 2002. 9

The one-year redemption period expired without the spouses Fortaleza redeeming the mortgage.
Thus, spouses Lapitan executed an affidavit of consolidation of ownership on November 20,
2003 and caused the cancellation of TCT No. T-412512 and the registration of the subject
property in their names under TCT No. T-535945 on February 4, 2004. Despite the foregoing,
10 

the spouses Fortaleza refused spouses Lapitan’s formal demand to vacate and surrender
11 

possession of the subject property.

Proceedings before the Regional Trial Court

On August 27, 2004, spouses Lapitan filed an ex parte petition for the issuance of writ of
possession with Branch 35 of the RTC of Calamba City docketed as SLRC Case No. 2528-2004-
C. As new registered owners of the subject property, spouses Lapitan claimed that they were
12 

entitled to its possession pursuant to Section 7 of Act No. 3135, as amended by Act No. 4118.
13 

In their opposition, spouses Fortaleza questioned the validity of the real estate mortgage and the
14 

foreclosure sale. They argued that the mortgage was void because the creditors bloated the
principal amount by the imposition of exorbitant interest. Spouses Fortaleza added that the
foreclosure proceeding was invalid for non-compliance with the posting requirement.

Later, for repeated failure of spouses Fortaleza to appear at the scheduled hearings, the RTC
allowed spouses Lapitan to present evidence ex parte.

Eventually, on September 16, 2005, the RTC ordered the issuance of a writ of possession
explaining that it is a ministerial duty of the court especially since the redemption period had
expired and a new title had already been issued in the name of the spouses Lapitan, thus:

WHEREFORE, premises considered, the Opposition with counterclaim filed by the respondents
is denied while this instant petition is hereby granted.

Accordingly, the Branch Clerk of Court is hereby ordered to issue a Writ of Possession directing
the provincial sheriff of Laguna to place the petitioner in possession of the above described
property free from any adverse occupants thereof.

SO ORDERED. 15

Spouses Fortaleza moved for reconsideration, claiming that the subject property is their family
16 

home and is exempt from foreclosure sale. On October 11, 2005, however, the RTC issued an
Order denying their motion. Accordingly, the branch clerk of court issued the Writ of
17 

Possession and the sheriff served the corresponding Notice to Vacate against spouses
18  19 

Fortaleza.

Proceedings before the Court of Appeals

Dissatisfied, spouses Fortaleza elevated the case to the CA via Rule 41 of the Rules of Court
docketed as CA-G.R. CV No. 86287. With the perfection of an appeal, the RTC held in abeyance
the implementation of the writ. After the parties submitted their respective briefs, the CA
20 

rendered the assailed Decision dated January 10, 2007 dismissing the appeal:
21 

WHEREFORE, the appeal is hereby DISMISSED. The Order dated September 16, 2005 of the
Regional Trial Court, Branch 35, Calamba City in SLRC Case No. 2528-2004-SC, is AFFIRMED.
The court a quo is DIRECTED to enforce the Writ of Possession it issued on October 24, 2005.

SO ORDERED. 22

In affirming the ruling of the RTC, the CA stressed that any question regarding the regularity and
validity of the mortgage or its foreclosure cannot be raised as a justification for opposing the
issuance of the writ of possession since the proceedings is ex parte and non-litigious. Moreover,
until the foreclosure sale is annulled, the issuance of the writ of possession is ministerial.

Issues

Unsuccesful with their quest to have the CA reconsider its Decision, spouses Fortaleza filed this
23 

petition for review on certiorari raising the following errors:

24 

WHETHER X X X THE HONORABLE COURT OF APPEALS VIOLATED THE TWO (2)-RAFFLE

RULE PRESCRIBED BY AND LONG ESTABLISHED UNDER THE REVISED INTERNAL
RULES OF THE COURT OF APPEALS WHEN IT IMMEDIATELY RENDERED THE ASSAILED
DECISION BARELY AFTER THE SUBMISSION OF THE PARTIES’ BRIEFS. IN SO DOING,
THE HONORABLE COURT OF APPEALS ENGAGED IN PROCEDURAL SHORTCUTS AND
ACTED WITH UNDUE HASTE AND INDECENT SPEED, THUS RENDERING ITS DECISION
AS NULL AND VOID AND CHARACTERIZED BY MANIFEST BIAS AND PARTIALITY TO THE
RESPONDENTS.

II

WHETHER X X X THE HONORABLE COURT OF APPEALS COMMITTED A SERIOUS

REVERSIBLE ERROR IN UPHOLDING THE TRIAL COURT’S ISSUANCE OF A WRIT OF
POSSESSION DESPITE THE FACT THAT THE RESPONDENTS FAILED TO ESTABLISH
THEIR ENTITLEMENT TO THE ISSUANCE OF SAID WRIT, THE NON-COMPLIANCE BY THE
ORIGINAL MORTGAGORS AND THE RESPONDENTS OF THE STATUTORY
REQUIREMENTS OF EXTRAJUDICIAL FORECLOSURE OF MORTGAGE UNDER ACT NO.
3135, AND THE FATAL DEFECTS OF THE FORECLOSURE PROCEEDINGS.

III

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT HOLDING THAT THE
PETITIONERS WERE PREVENTED BY THE RESPONDENTS FROM EXERCISING THEIR
RIGHT OF REDEMPTION OVER THE FORECLOSED PROPERTY BY DEMANDING A
REDEMPTION PRICE OF A HIGHLY INEQUITABLE AND MORE THAN DOUBLE THE
AMOUNT OF THE FORECLOSED PROPERTY, ESPECIALLY THAT THE FORECLOSED
MORTGAGED PROPERTY IS THE FAMILY HOME OF PETITIONERS AND THEIR
CHILDREN. 25

First, spouses Fortaleza point out that the CA violated its own 2002 Internal Rules of Procedure
when it decided the case without passing the two-raffle system. They claim that the justice
assigned in the completion stage also decided the case on the merits. This procedural shortcut,
according to spouses Fortaleza, evinces the appellate court’s bias and prejudgment in favor of
the spouses Lapitan.
Second, citing Barican v. Intermediate Appellate Court and Cometa v. Intermediate Appellate
26 

Court, and reiterating the irregularities that allegedly attended the foreclosure sale, the spouses
27 

Fortaleza insist that the issuance of writ of possession is not always ministerial and the trial court
should have accorded them opportunity to present contrary evidence.

Last, spouses Fortaleza maintain that the subject property is a family home exempt from forced
sale. Hence, in the spirit of equity and following the rulings in Tolentino v. Court of Appeals, and
28 

De los Reyes v. Intermediate Appellate Court, the Court should allow them to exercise the right
29 

of redemption even after the expiration of the one-year period.

Our Ruling

On Matters of Procedure

True, under the 2002 Internal Rules of the Court of Appeals (IRCA), appealed civil cases
undergo two-raffle system. First, a preliminary raffle is held to determine the Justice to whom the
case will be assigned for completion of records. After completion, a second raffle is conducted to
determine the Justice to whom the case will be assigned for study and report. "Each stage is
distinct and it may happen that the Justice to whom the case was initially raffled for completion
may not be the same Justice who will write the decision thereon." 30

Thus:

Section 2. Raffle of Cases. –

(a) Assignment of cases to a Justice, whether for completion of records or for study and report,
shall be by raffle, subject to the following rules:

(1) Appealed cases for completion of records shall be raffled to individual Justices; (Sec.
5(a), Rule 3, RIRCA [a])

(1.1) Records are deemed completed upon filing of the required briefs or
memoranda or the expiration of the period for the filing thereof and resolution of
all pending incidents. Thereupon, the Division Clerk of Court shall report the case
to the Justice concerned for the issuance of a resolution declaring the case
submitted for decision and referring the same to the Raffle Committee for raffle to
a Justice for study and report; (Sec. 5(b), Rule 3, RIRCA [a]). (Emphasis
31 

supplied.)

However, the two-raffle system is already abandoned under the 2009 IRCA. As the rule now
stands, the Justice to whom a case is raffled shall act on it both at the completion stage and for
the decision on the merits, thus:

SEC. 2. Raffle of Cases. –

(a) Cases shall be assigned to a Justice by raffle for completion of records, study and report,
subject to the following rules:

(1) Cases, whether original or appealed, shall be raffled to individual justices;

(1.1) Records are deemed completed upon filing of the required pleadings, briefs
or memoranda or the expiration of the period for the filing thereof and resolution
of all pending incidents. Upon such completion, the Division Clerk of Court shall
report the case to the Justice concerned for the issuance of a resolution declaring
the case submitted for decision. (Emphasis supplied.)
32 
Corollarily, the alleged defect in the processing of this case before the CA has been effectively
cured. We stress that rules of procedure may be modified at any time and become effective at
once, so long as the change does not affect vested rights. Moreover, it is equally axiomatic that
33 

there are no vested rights to rules of procedure. Thus, unless spouses Fortaleza can establish a
34 

right by virtue of some statute or law, the alleged violation is not an actionable wrong. At any
35 

rate, the 2002 IRCA does not provide for the effect of non-compliance with the two-raffle system
on the validity of the decision. Notably too, it does not prohibit the assignment by raffle of a case
for study and report to a Justice who handled the same during its completion stage.

We also find that personal bias and prejudgment cannot be inferred from the alleged breach of
internal rules. It is settled that clear and convincing evidence is required to prove bias and
prejudice. Bare allegations and mere suspicions of partiality are not enough in the absence of
36 

evidence to overcome the presumption that a member of the court will undertake his noble role to
dispense justice according to law and evidence and without fear or favor. Moreover, no acts or
37 

conduct of the division or the ponente was shown to indicate any arbitrariness against the
spouses Fortaleza. What is extant is that the opinions formed in the course of judicial
proceedings are all based on the evidence presented.

On the Issuance of Writ of Possession

Spouses Fortaleza claim that the RTC grievously erred in ignoring the apparent nullity of the
mortgage and the subsequent foreclosure sale. For them, the RTC should have heard and
considered these matters in deciding the case on its merits. They relied on the cases of
Barican and Cometa in taking exception to the ministerial duty of the trial court to grant a writ of
38  39 

possession.

But the cited authorities are not on all fours with this case. In Barican, we held that the obligation
of a court to issue a writ of possession ceases to be ministerial if there is a third party holding the
property adversely to the judgment debtor. Where such third party exists, the trial court should
conduct a hearing to determine the nature of his adverse possession. And in Cometa, there was
a pending action where the validity of the levy and sale of the properties in question were directly
put in issue which this Court found pre-emptive of resolution. For if the applicant for a writ of
possession acquired no interest in the property by virtue of the levy and sale, then, he is not
entitled to its possession. Moreover, it is undisputed that the properties subject of said case were
sold at an unusually lower price than their true value. Thus, equitable considerations motivated
this Court to withhold the issuance of the writ of possession to prevent injustice on the other
party.

Here, there are no third parties holding the subject property adversely to the judgment debtor. It
was spouses Fortaleza themselves as debtors-mortgagors who are occupying the subject
property. They are not even strangers to the foreclosure proceedings in which the ex parte writ of
possession was applied for. Significantly, spouses Fortaleza did not file any direct action for
annulment of the foreclosure sale of the subject property. Also, the peculiar circumstance of
gross inadequacy of the purchase price is absent.

Accordingly, unless a case falls under recognized exceptions provided by law and 40 

jurisprudence, we maintain the ex parte, non-adversarial, summary and ministerial nature of the
41 

issuance of a writ of possession as outlined in Section 7 of Act No. 3135, as amended by Act No.
4118, which provides:

SECTION 7. In any sale made under the provisions of this Act, the purchaser may petition the
Court of First Instance of the province or place where the property or any part thereof is situated,
to give him possession thereof during the redemption period, furnishing bond in an amount
equivalent to the use of the property for a period of twelve months, to indemnify the debtor in
case it be shown that the sale was made without violating the mortgage or without complying
with the requirements of this Act. Such petition shall be made under oath and filed in form of an
ex parte motion x x x and the court shall, upon approval of the bond, order that a writ of
possession issue, addressed to the sheriff of the province in which the property is situated, who
shall execute said order immediately. (Emphasis supplied.)

Under the provision cited above, the purchaser in a foreclosure sale may apply for a writ of
possession during the redemption period. Notably, in this case, the one-year period for the
spouses Fortaleza to redeem the mortgaged property had already lapsed. Furthermore,
ownership of the subject property had already been consolidated and a new certificate of title
had been issued under the name of the spouses Lapitan. Hence, as the new registered owners
of the subject property, they are even more entitled to its possession and have the unmistakable
right to file an ex parte motion for the issuance of a writ of possession. As aptly explained in
Edralin v. Philippine Veterans Bank, the duty of the trial court to grant a writ of possession in
42 

such instances is ministerial, and the court may not exercise discretion or judgment, thus:

Consequently, the purchaser, who has a right to possession after the expiration of the
redemption period, becomes the absolute owner of the property when no redemption is made. x
x x The purchaser can demand possession at any time following the consolidation of ownership
in his name and the issuance to him of a new TCT. After consolidation of title in the purchaser’s
name for failure of the mortgagor to redeem the property, the purchaser’s right to possession
ripens into the absolute right of a confirmed owner. At that point, the issuance of a writ of
possession, upon proper application and proof of title becomes merely a ministerial function.
Effectively, the court cannot exercise its discretion. (Emphasis in the original.)

In this case, spouses Lapitan sufficiently established their right to the writ of possession. More
specifically, they presented the following documentary exhibits: (1) the Certificate of Sale and its
annotation at the back of spouses Fortaleza’s TCT No. T-412512; (2) the Affidavit of
Consolidation proving that spouses Fortaleza failed to redeem the property within the one-year
redemption period; (3) TCT No. T-535945 issued in their names; and, (4) the formal demand on
spouses Fortaleza to vacate the subject property.

Lastly, we agree with the CA that any question regarding the regularity and validity of the
mortgage or its foreclosure cannot be raised as a justification for opposing the petition for the
issuance of the writ of possession. The said issues may be raised and determined only after the
43 

issuance of the writ of possession. Indeed, "[t]he judge with whom an application for writ of
44 

possession is filed need not look into the validity of the mortgage or the manner of its
foreclosure." The writ issues as a matter of course. "The rationale for the rule is to allow the
45 

purchaser to have possession of the foreclosed property without delay, such possession being
founded on the right of ownership." To underscore this mandate, Section 8 of Act No. 3135
46  47 

gives the debtor-mortgagor the right to file a petition for the setting aside of the foreclosure sale
and for the cancellation of a writ of possession in the same proceedings where the writ was
issued within 30 days after the purchaser-mortgagee was given possession. The court’s decision
thereon may be appealed by either party, but the order of possession shall continue in effect
during the pendency of the appeal.

"Clearly then, until the foreclosure sale of the property in question is annulled by a court of
competent jurisdiction, the issuance of a writ of possession remains the ministerial duty of the
trial court. The same is true with its implementation; otherwise, the writ will be a useless paper
judgment – a result inimical to the mandate of Act No. 3135 to vest possession in the purchaser
immediately." 48

On exemption of the subject property

and the exercise of right of redemption

Spouses Fortaleza’s argument that the subject property is exempt from forced sale because it is
a family home deserves scant consideration. As a rule, the family home is exempt from
execution, forced sale or attachment. However, Article 155(3) of the Family Code explicitly
49 
 allows the forced sale of a family home "for debts secured by mortgages on the premises before
or after such constitution." In this case, there is no doubt that spouses Fortaleza voluntarily
executed on January 28, 1998 a deed of Real Estate Mortgage over the subject property which
was even notarized by their original counsel of record. And assuming that the property is exempt
from forced sale, spouses Fortaleza did not set up and prove to the Sheriff such exemption from
forced sale before it was sold at the public auction. As elucidated in Honrado v. Court of
Appeals: 50

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 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, well-settled 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. (Emphasis supplied.)
51 

Certainly, reasonable time for purposes of the law on exemption does not mean a time after the
expiration of the one-year period for a judgment debtor to redeem the property. 52

Equally without merit is spouses Fortaleza’s reliance on the cases of Tolentino and De Los
53 

Reyes in praying for the exercise of the right of redemption even after the expiration of the one-
54 

year period. In Tolentino, we held that an action to redeem filed within the period of redemption,
with a simultaneous deposit of the redemption money tendered to the sheriff, is equivalent to an
offer to redeem and has the effect of preserving the right to redemption for future enforcement
even beyond the one-year period. And in De Los Reyes, we allowed the mortgagor to redeem
55 

the disputed property after finding that the tender of the redemption price to the sheriff was made
within the one-year period and for a sufficient amount.

The circumstances in the present case are far different. The spouses Fortaleza neither filed an
action nor made a formal offer to redeem the subject property accompanied by an actual and
simultaneous tender of payment. It is also undisputed that they allowed the one-year period to
lapse from the registration of the certificate of sale without redeeming the mortgage. For all
intents and purposes, spouses Fortaleza have waived or abandoned their right of redemption. 1âwphi1

Although the rule on redemption is liberally interpreted in favor of the original owner of the
property, we cannot apply the privilege of liberality to accommodate the spouses Forteza due to
their negligence or omission to exercise the right of redemption within the prescribed period
without justifiable cause.

WHEREFORE, premises considered, the petition is DENIED. The Decision dated January 10,
2007 and Resolution dated June 6, 2007 of the Court of Appeals in CA-G.R. CV No. 86287
are AFFIRMED.

Pana v Heirs of Juanite, Sr., GR No. 164201, 10 Dec 2012 – ART 122. Civil Liab

EFREN PANA, Petitioner,
vs.
HEIRS OF JOSE JUANITE, SR. and JOSE JUANITE, JR., Respondents.

DECISION
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 decision acquitting Efren of the charge for
2 

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. The decision became final and executory on October 1,
3 

2001. 4

Upon motion for execution by the heirs of the deceased, on March 12, 2002 the RTC ordered the
issuance of the writ, resulting in the levy of real properties registered in the names of Efren and
5 

Melecia. Subsequently, a notice of levy and a notice of sale on execution were issued.
6  7  8 

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. On September 16, 2002 the RTC denied the motion. The spouses moved for
9  10 

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. It also denied Efren’s motion for reconsideration, prompting him to file the
12  13 

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. Although the heirs of the deceased victims do not dispute
14 
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."

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 accused-spouse may properly
be charged against the community as heretofore discussed. 15

The RTC applied the same reasoning as above. Efren and Melecia’s property relation was
16 

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.

Post-marriage 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; (b) the spouses who were legally separated reconciled and agreed to revive their
18 

former property regime; (c) judicial separation of property had been had on the ground that a
19 

spouse abandons the other without just cause or fails to comply with his obligations to the
family; (d) there was judicial separation of property under Article 135; (e) the spouses jointly filed
20 

a petition for the voluntary dissolution of their absolute community or conjugal partnership of
gains. None of these circumstances exists in the case of Efren and Melecia.
21 

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. No evidence of a prenuptial
22 

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 above-mentioned.
Since Efren does not dispute the RTC’s finding that Melecia has no exclusive property of her
own, the above applies. The civil indemnity that the decision in the murder case imposed on her
24 

may be enforced against their conjugal assets after the responsibilities enumerated in Article 121
of the Family Code have been covered. Those responsibilities are as follows:
25 

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
administrator-spouse 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;

(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 self-improvement;

(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 self-improvement; 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 above-mentioned."

WHEREFORE, the Court AFFIRMS with MODIFICATION the Resolutions of the Court of

Appeals in CA-G.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.
E. Separation of Property
Partosa-Jo v CA, GR No. 82606, 18 Dec 1992

PRIMA PARTOSA-JO, petitioner,
vs.
THE HONORABLE COURT OF APPEALS and HO HANG (with aliases JOSE JO and
CONSING), respondents.

CRUZ, J.:

The herein private respondent, Jose Jo, admits to having cohabited with three women and
fathered fifteen children. The first of these women, the herein petitioner, claims to be his legal
wife whom he begot a daughter, Monina Jo. The other women and their respective offspring are
not parties of these case.

In 1980, the petitioner filed a complaint against Jo for judicial separation of conjugal property,
docketed as Civil Case No. 51, in addition to an earlier action for support, also against him and
docketed as Civil Case No. 36, in the Regional Trial Court of Negros Oriental, Branch 35.

The two cases were consolidated and tried jointly. On November 29, 1983, Judge German G.
Lee, Jr. rendered an extensive decision, the dispositive portion of which read:

WHEREFORE, in view of all the foregoing arguments and considerations, this

court hereby holds that the plaintiff Prima Partosa was legally married to Jose Jo
alias Ho Hang, alias Consing, and, therefore, is entitled to support as the lawfully
wedded wife and the defendant is hereby ordered to give a monthly support of
P500.00 to the plaintiff Prima Partosa, to be paid on or before the 5th day of
every month, and to give to the plaintiff the amount of P40,000.00 for the
construction of the house in Zamboanguita, Negros Oriental where she may live
separately from the defendant being entitled under the law to separate
maintenance being the innocent spouse and to pay the amount of P19,200.00 to
the plaintiff by way of support in arrears and to pay the plaintiff the amount of
P3,000.00 in the concept of attorney's fees.

As will be noticed, there was a definite disposition of the complaint for support but none of the
complaint for judicial separation of conjugal property.

Jo elevated the decision to the Court of Appeals, which affirmed the ruling of the trial court in the
complaint for support.   The complaint for judicial separation of conjugal property was dismissed
1

for lack of a cause of action and on the ground that separation by agreement was not covered by
Article 178 of the Civil Code.

When their motions for reconsideration were denied, both parties came to this Court for relief.
The private respondent's petition for review on certiorari was dismissed for tardiness in our
resolution dated February 17, 1988, where we also affirmed the legality of the marriage between
Jose and Prima and the obligation of the former to support her and her daughter.

This petition deals only with the complaint for judicial separation of conjugal property.

It is here submitted that the Court of Appeals erred in holding that: a) the judicial separation of
conjugal property sought was not allowed under Articles 175, 178 and 191 of the Civil Code; and
b) no such separation was decreed by the trial court in the dispositive portion of its decision.
The private respondent contends that the decision of the trial court can longer be reviewed at this
time because it has a long since become final and executory. As the decretal portion clearly
made no disposition of Civil Case No. 51, that case should be considered impliedly dismissed.
The petitioner should have called the attention of the trial court to the omission so that the proper
rectification could be made on time. Not having done so, she is now concluded by the said
decision, which can no longer be corrected at this late hour.

We deal first with the second ground.

While admitting that no mention was made of Civil Case No. 51 in the dispositive portion of the
decision of the trial court, the petitioner argues that a disposition of the case was nonetheless
made in the penultimate paragraph of the decision reading as follows:

It is, therefore, hereby ordered that all properties in question are considered
properties of Jose Jo, the defendant in this case, subject to separation of property
under Article 178, third paragraph of the Civil Code, which is subject of separate
proceedings as enunciated herein.

The petitioner says she believed this to be disposition enough and so did not feel it was
necessary for her to appeal, particularly since the order embodied in that paragraph was in her
favor. It was only when the respondent court observed that there was no dispositive portion
regarding that case and so ordered its dismissal that she found it necessary to come to this Court
for relief.

The petitioner has a point.

The dispositive portion of the decision in question was incomplete insofar as it carried no ruling
on the complaint for judicial separation of conjugal property although it was extensively
discussed in the body of the decision. The drafting of the decision was indeed not exactly careful.
The petitioner's counsel, noting this, should have taken immediate steps for the rectification for
the omission so that the ruling expressed in the text of the decision could have been embodied in
the decretal portion. Such alertness could have avoided this litigation on a purely technical issue.

Nevertheless, the technicality invoked in this case should not be allowed to prevail over
considerations of substantive justive. After all, the technical defect is not insuperable. We have
said time and again that where there is an ambiguity caused by an omission or a mistake in the
dispositive portion of the decision, this Court may clarify such an ambiguity by an amendment
even after the judgment have become final.   In doing so, the Court may resort to the pleading
2

filed by the parties and the findings of fact and the conclusions of law expressed in the text or
body of the decision. 3

The trial court made definite findings on the complaint for judicial separation of conjugal property,
holding that the petitioner and the private respondent were legally married and that the properties
mentioned by the petitioner were acquired by Jo during their marriage although they were
registered in the name of the apparent dummy.

There is no question therefore that the penultimate paragraph of the decision of the trial court
was a ruling based upon such findings and so should have been embodied in the dispositive
portion. The respondent court should have made the necessary modification instead of
dismissing Civil Case No. 51 and thus upholding mere form over substance.

In the interest of substantive justice, and to expedite these proceedings, we hereby make such
modification.

And now to the merits of Civil Case No. 51.

The Court of Appeals dismissed the complaint on the ground that the separation of the parties
was due to their agreement and not because of abondonment. The respondent court relied
mainly on the testimony of the petitioner, who declared under oath that she left Dumaguete City,
where she and Jo were living together "because that was our agreement." It held that a
agreement to live separately without just cause was void under Article 221 of the Civil Code and
could not sustain any claim of abandonment by the aggrieved spouse. Its conclusion was that the
only remedy availabe to the petitioner was legal separation under Article 175 of the Civil
Code,   by virtue of which the conjugal partnership of property would be terminated.
4

The petitioner contends that the respondent court has misinterpreted Articles 175, 178 and 191
of the Civil Code. She submits that the agreement between her and the private respondent was
for her to temporarily live with her parents during the initial period of her pregnancy and for him to
visit and support her. They never agreed to separate permanently. And even if they did, this
arrangement was repudiated and ended in 1942, when she returned to him at Dumaguete City
and he refused to accept her.

The petitioner invokes Article 178 (3) of the Civil Code, which reads:

Art. 178. The separation in fact between husband and wife without judicial
approval, shall not affect the conjugal partnership, except that:

xxx xxx xxx

(3) If the husband has abandoned the wife without just cause for at least one
year, she may petition the court for a receivership, or administration by her of the
conjugal partnership property or separation of property.

The above-quoted provision has been superseded by Article 128 of the Family Code, which
states:

Art. 128. If a spouse without just cause abandons the other or fails to comply with
his or her obligations to the family, the aggrieved spouse may petition the court
for receivership, for judicial separation of property, of for authority to be the sole
administrator of the conjugal partnership property, subject to such precautionary
conditions as the court may impose.

The obligations to the family mentioned in the preceding paragraph refer to

martial, parental or property relations.

A spouse is deemed to have abondoned the other when he or she has left the
conjugal dwelling without any intention of returning. The spouse who has left the
conjugal dwelling for a period of three months or has failed within the same
period to give any information as to his or her whereabouts shall be prima
facie presumed to have no intention of returning to the conjugal dwelling.

Under the this provision, the aggrieved spouse may petition for judicial separation on either of
these grounds:

1. Abondonment by a spouse of the other without just cause; and

2. Failure of one spouse to comply with his or her obligations to the family without
just cause, even if she said spouse does not leave the other spouse.

Abandonment implies a departure by one spouse with the avowed intent never to return, followed
by prolonged absence without just cause, and without in the meantime providing in the least for
one's family although able to do so.   There must be absolute cessation of marital relations,
5

duties and rights, with the intention of perpetual separation.   This idea is clearly expressed in the
6

above-quoted provision, which states that "a spouse is deemed to have abandoned the other
when he or she has left the conjugal dwelling without any intention of returning."

The record shows that as early as 1942, the private respondent had already rejected the
petitioner, whom he denied admission to their conjugal home in Dumaguete City when she
returned from Zamboanguita. The fact that she was not accepted by Jo demonstrates all too
clearly that he had no intention of resuming their conjugal relationship. Moreover, beginning 1968
until the determination by this Court of the action for support in 1988, the private respondent
refused to give financial support to the petitioner. The physical separation of the parties, coupled
with the refusal by the private respondent to give support to the petitioner, sufficed to constitute
abandonment as a ground for the judicial separation of their conjugal property.

In addition, the petitioner may also invoke the second ground allowed by Article 128, for the fact
is that he has failed without just cause to comply with his obligations to the family as husband or
parent. Apart form refusing to admit his lawful wife to their conjugal home in Dumaguete City, Jo
has freely admitted to cohabiting with other women and siring many children by them. It was his
refusal to provide for the petitioner and their daughter that prompted her to file the actions
against him for support and later for separation of the conjugal property, in which actions,
significantly, he even denied being married to her. The private respondent has not established
any just cause for his refusal to comply with his obligations to his wife as dutiful husband.

Their separation thus falls also squarely under Article 135 of the Family Code, providing as
follows:

Art. 135. Any of the following shall be considered sufficient cause for judicial
separation of property:

xxx xxx xxx

(6) That at the time of the petition, the spouse have been separated in fact for at
least one year and reconciliation is highly improbable.

The amendments introduced in the Family Code are applicable to the case before us although
they became effective only on August 3, 1988. As we held in Ramirez v. Court of Appeals:  7

The greater weight of authority is inclined to the view that an appellate court, in
reviewing a judgment on appeal, will dispose of a question according to the law
prevailing at the term of such disposition, and not according to the law prevailing
at the time of rendition of the appealed judgement. The court will therefore
reverse a judgement which was correct at the time it was originally rendered
where, by statute, there has been an intermediate change in the law which
renders such judgement erroneous at the time the case was finally disposed of
on appeal.

The order of judicial separation of the properties in question is based on the finding of both the
trial and respondent courts that the private respondent is indeed their real owner. It is these
properties that should now be divided between him and the petitioner, on the assumption that
they were acquired during coverture and so belong to the spouses half and half. As the private
respondent is a Chinese citizen, the division must include such properties properly belonging to
the conjugal partnership as may have been registered in the name of other persons in violation
of the Anti-Dummy Law.
 The past has caught up with the private respondent. After his extramarital flings and a
succession of illegitimate children, he must now make an accounting to his lawful wife of the
properties he denied her despite his promise to their of his eternal love and care.

WHEREFORE, the petition is GRANTED and the assailed decision of the respondent court is
MODIFIED. Civil Case No. 51 is hereby decided in favor the plaintiff, the petitioner herein, and
the conjugal property of the petitioner and the private respondent is hereby ordered divided
between them, share and share alike. This division shall be implemented by the trial court after
determination of all the properties pertaining to the said conjugal partnership, including those that
may have been illegally registered in the name of the persons.

Maquilan vs Maquilan, GR No. 155409, 8 June 2007

VIRGILIO MAQUILAN, petitioner,
vs.
DITA MAQUILAN, respondent.

DECISION

AUSTRIA-MARTINEZ, J.:

Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court
assailing the Decision1 dated August 30, 2002 promulgated by the Court of Appeals (CA) in CA-
G.R. SP No. 69689, which affirmed the Judgment on Compromise Agreement dated January 2,
2002 of the Regional Trial Court (RTC), Branch 3, Nabunturan, Compostela Valley, and the RTC
Orders dated January 21, 2002 and February 7, 2002 (ORDERS) in Civil Case No. 656.

The facts of the case, as found by the CA, are as follows:

Herein petitioner and herein private respondent are spouses who once had a blissful married life
and out of which were blessed to have a son. However, their once sugar coated romance turned
bitter when petitioner discovered that private respondent was having illicit sexual affair with her
paramour, which thus, prompted the petitioner to file a case of adultery against private
respondent and the 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 pre-trial of the said case, petitioner and private respondent entered into a
COMPROMISE AGREEMENT in the following terms, to wit:

1. In partial settlement of the conjugal partnership of gains, the parties agree to the following:

a. ₱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;

xxxx

The said Compromise Agreement was given judicial imprimatur by the respondent judge in the
assailed Judgment On Compromise Agreement, which was erroneously dated January 2,
2002.2

However, petitioner filed an Omnibus Motion dated January 15, 2002, praying for the repudiation
of the Compromise Agreement and the reconsideration of the Judgment on Compromise
Agreement by the respondent judge on the grounds that his previous lawyer did not intelligently
and judiciously apprise him of the consequential effects of the Compromise Agreement.

The respondent Judge in the assailed Order dated January 21, 2002, denied the
aforementioned Omnibus Motion.

Displeased, petitioner filed a Motion for Reconsideration of the aforesaid Order, but the same
was denied in the assailed Order dated February 7, 2002.3 (Emphasis supplied)

The petitioner filed a Petition for Certiorari and Prohibition with the CA under Rule 65 of the
Rules of Court claiming that the RTC committed grave error and abuse of discretion amounting
to lack or excess of jurisdiction (1) in upholding the validity of the Compromise Agreement dated
January 11, 2002; (2) when it held in its Order dated February 7, 2002 that the Compromise
Agreement was made within the cooling-off period; (3) when it denied 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 cooling-off period
under Article 58 of the Family Code has no bearing on the validity of the Compromise
Agreement; that the Compromise Agreement is not contrary to law, morals, good customs, public
order, and public policy; that this agreement may not be later disowned simply because of a
change of mind; that the presence of the Solicitor General or his deputy is not indispensable to
the execution and validity of the Compromise Agreement, since the purpose of his presence is to
curtail any collusion between the parties and to see to it that evidence is not fabricated, and, with
this in mind, nothing in the Compromise Agreement touches on the very merits of the case of
declaration of nullity of marriage for the court to be wary of any possible collusion; and, finally,
that the Compromise Agreement is merely an agreement between the parties to separate their
conjugal properties partially without prejudice to the outcome of the pending case of declaration
of nullity of marriage.

Hence, herein Petition, purely on questions of law, raising the following issues:

I.

WHETHER OF NOT A SPOUSE CONVICTED OF EITHER CONCUBINAGE OR ADULTERY,

CAN STILL SHARE IN THE CONJUGAL PARTNERSHIP;

II

WHETHER OR NOT A COMPROMISE AGREEMENT ENTERED INTO BY SPOUSES, ONE OF

WHOM WAS CONVICTED OF ADULTERY, GIVING THE CONVICTED SPOUSE A SHARE IN
THE CONJUGAL PROPERTY, VALID AND LEGAL;

III

WHETHER OR NOT A JUDGMENT FOR ANNULMENT AND LEGAL SEPARATION IS A PRE-

REQUISITE BEFORE A SPOUSE CONVICTED OF EITHER CONCUBINAGE OR ADULTERY,
BE DISQUALIFIED AND PROHIBITED FROM SHARING IN THE CONJUGAL PROPERTY;

IV

WHETHER OR NOT THE DISQUALIFICATION OF A CONVICTED SPOUSE OF ADULTERY

FROM SHARING IN A CONJUGAL PROPERTY, CONSTITUTES CIVIL INTERDICTION. 5

The petitioner argues that the Compromise Agreement should not have been given judicial
imprimatur since it is against law and public policy; that the proceedings where it was approved is
null and void, there being no appearance and participation of the Solicitor General or the
Provincial Prosecutor; that it was timely repudiated; and that the respondent, having been
convicted of adultery, is therefore disqualified from sharing in the conjugal property.

The Petition must fail.

The essential question is whether the partial voluntary separation of property made by the
spouses pending the petition for declaration of nullity of marriage is valid.

First. The petitioner contends that the Compromise Agreement is void because it circumvents the
law that prohibits the guilty spouse, who was convicted of either adultery or concubinage, from
sharing in the conjugal property. Since the respondent was convicted of adultery, the petitioner
argues that her share should be forfeited in favor of the common child under Articles 43(2) 6 and
637 of the Family Code.

To the petitioner, it is the clear intention of the law to disqualify the spouse convicted of adultery
from sharing in the conjugal property; and because the Compromise Agreement is void, it never
became final and executory.

Moreover, the petitioner cites Article 20358 of the Civil Code and argues that since adultery is a
ground for legal separation, the Compromise Agreement is therefore void.

These arguments are specious. The foregoing provisions of the law are inapplicable to the
instant case.

Article 43 of the Family Code refers to Article 42, to wit:

Article 42. The subsequent marriage referred to in the preceding Article 9 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

xxxx

(e) Where no defaults allowed.— If the defending party in action for annulment or declaration of
nullity of marriage or for legal separation fails to answer, the court shall order the prosecuting
attorney to investigate whether or not a collusion between the parties exists if there is no
collusion, to intervene for the State in order to see to it that the evidence submitted is not
fabricated. (Emphasis supplied

Truly, the purpose of the active participation of the Public Prosecutor or the Solicitor General is to
ensure that the interest of the State is represented and protected in proceedings for annulment
and declaration of nullity of marriages by preventing collusion between the parties, or the
fabrication or suppression of evidence.10 While the appearances of the Solicitor General and/or
the Public Prosecutor are mandatory, the failure of the RTC to require their appearance does not
per se nullify the Compromise Agreement. This Court fully concurs with the findings of the CA:

x x x. It bears emphasizing that the intendment of the law in requiring the presence of the
Solicitor General and/or State prosecutor in all proceedings of legal separation and annulment or
declaration of nullity of marriage is to curtail or prevent any possibility of collusion between the
parties and to see to it that their evidence respecting the case is not fabricated. In the instant
case, there is no exigency for the presence of the Solicitor General and/or the State prosecutor
because as already stated, nothing in the subject compromise agreement touched into the very
merits of the case of declaration of nullity of marriage for the court to be wary of any possible
collusion between the parties. At the risk of being repetiti[ve], the compromise agreement
pertains merely to an agreement between the petitioner and the private respondent to separate
their conjugal properties partially without prejudice to the outcome of the pending case of
declaration of nullity of marriage.11

Third. The conviction of adultery does not carry the accessory of civil interdiction. Article 34 of the
Revised Penal Code provides for the consequences of civil interdiction:

Art. 34. Civil Interdiction. – Civil interdiction shall deprive the offender during the time of his
sentence of the rights of parental authority, or guardianship, either as to the person or property of
any ward, of marital authority, of the right to manage his property and of the right to dispose of
such property by any act or any conveyance inter vivos.
 Under Article 333 of the same Code, the penalty for adultery is prision correccional in its medium
and maximum periods. Article 333 should be read with Article 43 of the same Code. The latter
provides:

Art. 43. Prision correccional – Its accessory penalties. – The penalty of prision correccional shall
carry with it that of suspension from public office, from the right to follow a profession or calling,
and that of perpetual special disqualification from the right of suffrage, if the duration of said
imprisonment shall exceed eighteen months. The offender shall suffer the disqualification
provided in this article although pardoned as to the principal penalty, unless the same shall have
been expressly remitted in the pardon.

It is clear, therefore, and as correctly held by the CA, that the crime of adultery does not carry the
accessory penalty of civil interdiction which deprives the person of the rights to manage her
property and to dispose of such property inter vivos.

Fourth. Neither could it be said that the petitioner was not intelligently and judiciously informed of
the consequential effects of the compromise agreement, and that, on this basis, he may
repudiate the Compromise Agreement. The argument of the petitioner that he was not duly
informed by his previous counsel about the legal effects of the voluntary settlement is not
convincing. Mistake or vitiation of consent, as now claimed by the petitioner as his basis for
repudiating the settlement, could hardly be said to be evident. In Salonga v. Court of
Appeals,12 this Court held:

[I]t is well-settled that the negligence of counsel binds the client. This is based on the rule that
any act performed by a lawyer within the scope of his general or implied authority is regarded as
an act of his client. Consequently, the mistake or negligence of petitioners' counsel may result in
the rendition of an unfavorable judgment against them.

Exceptions to the foregoing have been recognized by the Court in cases where reckless or gross
negligence of counsel deprives the client of due process of law, or when its application "results in
the outright deprivation of one's property through a technicality." x x x x 13

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.

Noverras v Noverras, GR No. 188289, 20 Aug 2014

DAVID A. NOVERAS, Petitioner,
vs.
LETICIA T. NOVERAS, Respondent.

DECISION

PEREZ, J.:

Before the Court is a petition for review assailing the 9 May 2008 Decision  of the Court of
1

Appeals in CA-G.R .. CV No. 88686, which affirmed in part the 8 December 2006 Decision  of the 2

Regional Trial Court (RTC) of Baler, Aurora, Branch 96.

The factual antecedents are as follow:

David A. Noveras (David) and Leticia T. Noveras (Leticia) were married on 3 December 1988 in
Quezon City, Philippines. They resided in California, United States of America (USA) where they
eventually acquired American citizenship. They then begot two children, namely: Jerome T.

Noveras, who was born on 4 November 1990 and JenaT. Noveras, born on 2 May 1993. David
was engaged in courier service business while Leticia worked as a nurse in San Francisco,
California.

During the marriage, they acquired the following properties in the Philippines and in the USA:

PHILIPPINES

PROPERTY FAIR MARKET VALUE

House and Lot with an area of 150 sq. m. ₱1,693,125.00

located at 1085 Norma Street, Sampaloc,
Manila (Sampaloc property)
Agricultural land with an area of 20,742 sq. ₱400,000.00
m. located at Laboy, Dipaculao, Aurora
A parcel of land with an area of 2.5 hectares ₱490,000.00
located at Maria Aurora, Aurora
3
A parcel of land with an area of 175 sq.m. ₱175,000.00
located at Sabang Baler, Aurora
3-has. coconut plantation in San Joaquin ₱750,000.00
Maria Aurora, Aurora

USA

PROPERTY FAIR MARKET VALUE

House and Lot at 1155 Hanover Street, Daly

City, California
$550,000.00
(unpaid debt of $285,000.00)
Furniture and furnishings $3,000

Jewelries (ring and watch) $9,000

2000 Nissan Frontier 4x4 pickup truck $13,770.00

Bank of America Checking Account $8,000

Bank of America Cash Deposit

Life Insurance (Cash Value) $100,000.00

4
Retirement, pension, profit-sharing, annuities $56,228.00
The Sampaloc property used to beowned by David’s parents. The parties herein secured a loan
from a bank and mortgaged the property. When said property was about to be foreclosed, the
couple paid a total of ₱1.5 Million for the redemption of the same.

Due to business reverses, David left the USA and returned to the Philippines in 2001. In
December 2002,Leticia executed a Special Power of Attorney (SPA) authorizing David to sell the
Sampaloc property for ₱2.2 Million. According to Leticia, sometime in September 2003, David
abandoned his family and lived with Estrellita Martinez in Aurora province. Leticia claimed that
David agreed toand executed a Joint Affidavit with Leticia in the presence of David’s father, Atty.
Isaias Noveras, on 3 December 2003 stating that: 1) the ₱1.1Million proceeds from the sale of
the Sampaloc property shall be paid to and collected by Leticia; 2) that David shall return and
pay to Leticia ₱750,000.00, which is equivalent to half of the amount of the redemption price of
the Sampaloc property; and 3) that David shall renounce and forfeit all his rights and interest in
the conjugal and real properties situated in the Philippines.  David was able to collect
5

₱1,790,000.00 from the sale of the Sampaloc property, leaving an unpaid balance of
₱410,000.00.

Upon learning that David had an extra-marital affair, Leticia filed a petition for divorce with the
Superior Court of California, County of San Mateo, USA. The California court granted the divorce
on 24 June 2005 and judgment was duly entered on 29 June 2005.  The California court granted
6

to Leticia the custody of her two children, as well as all the couple’s properties in the USA. 7

On 8 August 2005, Leticia filed a petition for Judicial Separation of Conjugal Property before the
RTC of Baler, Aurora. She relied on the 3 December 2003 Joint Affidavit and David’s failure to
comply with his obligation under the same. She prayed for: 1) the power to administer all
conjugal properties in the Philippines; 2) David and his partner to cease and desist from selling
the subject conjugal properties; 3) the declaration that all conjugal properties be forfeited in favor
of her children; 4) David to remit half of the purchase price as share of Leticia from the sale of the
Sampaloc property; and 5) the payment of₱50,000.00 and ₱100,000.00 litigation expenses. 8

In his Answer, David stated that a judgment for the dissolution of their marriage was entered on
29 June 2005 by the Superior Court of California, County of San Mateo. He demanded that the
conjugal partnership properties, which also include the USA properties, be liquidated and that all
expenses of liquidation, including attorney’s fees of both parties be charged against the conjugal
partnership.9

The RTC of Baler, Aurora simplified the issues as follow:

1. Whether or not respondent David A. Noveras committed acts of abandonment and

marital infidelity which can result intothe forfeiture of the parties’ properties in favor of the
petitioner and their two (2) children.

2. Whether or not the Court has jurisdiction over the properties in California, U.S.A. and
the same can be included in the judicial separation prayed for.

3. Whether or not the "Joint Affidavit" x x x executed by petitioner Leticia T. Noveras and
respondent David A. Noveras will amount to a waiver or forfeiture of the latter’s property
rights over their conjugal properties.

4. Whether or not Leticia T. Noveras isentitled to reimbursement of onehalf of the ₱2.2

[M]illion sales proceeds of their property in Sampaloc, Manila and one-half of the ₱1.5
[M]illion used to redeem the property of Atty. Isaias Noveras, including interests and
charges.

5. How the absolute community properties should be distributed.

 6. Whether or not the attorney’s feesand litigation expenses of the parties were
chargeable against their conjugal properties.

Corollary to the aboveis the issue of:

Whether or not the two common children of the parties are entitled to support and presumptive
legitimes.
10

On 8 December 2006, the RTC rendered judgment as follows:

1. The absolute community of property of the parties is hereby declared DISSOLVED;

2. The net assets of the absolute community of property ofthe parties in the Philippines
are hereby ordered to be awarded to respondent David A. Noveras only, with the
properties in the United States of America remaining in the sole ownership of petitioner
Leticia Noveras a.k.a. Leticia Tacbiana pursuant to the divorce decree issuedby the
Superior Court of California, County of San Mateo, 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 whom
said properties are awarded;

3. One-half of the properties awarded to respondent David A. Noveras in the preceding

paragraph are hereby given to Jerome and Jena, his two minor children with petitioner
LeticiaNoveras a.k.a. Leticia Tacbiana as their presumptive legitimes and said legitimes
must be annotated on the titles covering the said properties.Their share in the income
from these properties shall be remitted to them annually by the respondent within the first
half of January of each year, starting January 2008;

4. One-half of the properties in the United States of America awarded to petitioner Leticia
Noveras a.k.a. Leticia Tacbiana in paragraph 2 are hereby given to Jerome and Jena,
her two minor children with respondent David A. Noveras as their presumptive legitimes
and said legitimes must be annotated on the titles/documents covering the said
properties. Their share in the income from these properties, if any, shall be remitted to
them annually by the petitioner within the first half of January of each year, starting
January 2008;

5. For the support of their two (2) minor children, Jerome and Jena, respondent David A.
Noveras shall give them US$100.00 as monthly allowance in addition to their income
from their presumptive legitimes, while petitioner Leticia Tacbiana shall take care of their
food, clothing, education and other needs while they are in her custody in the USA. The
monthly allowance due from the respondent shall be increased in the future as the needs
of the children require and his financial capacity can afford;

6. Of the unpaid amount of ₱410,000.00 on the purchase price of the Sampaloc property,
the Paringit Spouses are hereby ordered to pay ₱5,000.00 to respondent David A.
Noveras and ₱405,000.00 to the two children. The share of the respondent may be paid
to him directly but the share of the two children shall be deposited with a local bank in
Baler, Aurora, in a joint account tobe taken out in their names, withdrawal from which
shall only be made by them or by their representative duly authorized with a Special
Power of Attorney. Such payment/deposit shall be made withinthe period of thirty (30)
days after receipt of a copy of this Decision, with the passbook of the joint account to be
submitted to the custody of the Clerk of Court of this Court within the same period. Said
passbook can be withdrawn from the Clerk of Court only by the children or their attorney-
in-fact; and
 7. The litigation expenses and attorney’s fees incurred by the parties shall be shouldered
by them individually. 11

The trial court recognized that since the parties are US citizens, the laws that cover their legal
and personalstatus are those of the USA. With respect to their marriage, the parties are divorced
by virtue of the decree of dissolution of their marriage issued by the Superior Court of California,
County of San Mateo on 24June 2005. Under their law, the parties’ marriage had already been
dissolved. Thus, the trial court considered the petition filed by Leticia as one for liquidation of the
absolute community of property regime with the determination of the legitimes, support and
custody of the children, instead of an action for judicial separation of conjugal property.

With respect to their property relations, the trial court first classified their property regime as
absolute community of property because they did not execute any marriage settlement before
the solemnization of their marriage pursuant to Article 75 of the Family Code. Then, the trial court
ruled that in accordance with the doctrine of processual presumption, Philippine law should apply
because the court cannot take judicial notice of the US law since the parties did not submit any
proof of their national law. The trial court held that as the instant petition does not fall under the
provisions of the law for the grant of judicial separation of properties, the absolute community
properties cannot beforfeited in favor of Leticia and her children. Moreover, the trial court
observed that Leticia failed to prove abandonment and infidelity with preponderant evidence.

The trial court however ruled that Leticia is not entitled to the reimbursements she is praying for
considering that she already acquired all of the properties in the USA. Relying still on the
principle of equity, the Court also adjudicated the Philippine properties to David, subject to the
payment of the children’s presumptive legitimes. The trial court held that under Article 89 of the
Family Code, the waiver or renunciation made by David of his property rights in the Joint Affidavit
is void.

On appeal, the Court of Appeals modified the trial court’s Decision by directing the equal division
of the Philippine properties between the spouses. Moreover with respect to the common
children’s presumptive legitime, the appellate court ordered both spouses to each pay their
children the amount of ₱520,000.00, thus:

WHEREFORE, the instant appeal is PARTLY GRANTED. Numbers 2, 4 and 6 of the

assailedDecision dated December 8, 2006 of Branch 96, RTC of Baler, Aurora Province, in Civil
Case No. 828 are hereby MODIFIED to read as follows:

2. The net assets of the absolute community of property of the parties in the Philippines
are hereby divided equally between petitioner Leticia Noveras a.k.a. Leticia Tacbiana
(sic) and respondent David A. Noveras;

xxx

4. One-half of the properties awarded to petitioner Leticia Tacbiana (sic) in paragraph 2

shall pertain to her minor children, 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 them by petitioner annually
within the first half of January, starting 2008;

xxx

6. Respondent David A. Noveras and petitioner Leticia Tacbiana (sic) are each ordered
to pay the amount of₱520,000.00 to their two children, Jerome and Jena, as their
presumptive legitimes from the sale of the Sampaloc property inclusive of the receivables
therefrom, which shall be deposited to a local bank of Baler, Aurora, under a joint
account in the latter’s names. The payment/deposit shall be made within a period of thirty
 (30) days from receipt ofa copy of this Decision and the corresponding passbook
entrusted to the custody ofthe Clerk of Court a quowithin the same period, withdrawable
only by the children or their attorney-in-fact.

A number 8 is hereby added, which shall read as follows:

8. Respondent David A. Noveras is hereby ordered to pay petitioner Leticia Tacbiana

(sic) the amount of ₱1,040,000.00 representing her share in the proceeds from the sale
of the Sampaloc property.

The last paragraph shall read as follows:

Send a copy of this Decision to the local civil registry of Baler, Aurora; the local civil registry of
Quezon City; the Civil RegistrarGeneral, National Statistics Office, Vibal Building, Times Street
corner EDSA, Quezon City; the Office of the Registry of Deeds for the Province of Aurora; and to
the children, Jerome Noveras and Jena Noveras.

The rest of the Decision is AFFIRMED. 12

In the present petition, David insists that the Court of Appeals should have recognized the
California Judgment which awarded the Philippine properties to him because said judgment was
part of the pleading presented and offered in evidence before the trial court. David argues that
allowing Leticia to share in the Philippine properties is tantamount to unjust enrichment in favor of
Leticia considering that the latter was already granted all US properties by the California court.

In summary and review, the basic facts are: David and Leticia are US citizens who own
properties in the USA and in the Philippines. Leticia obtained a decree of divorce from the
Superior Court of California in June 2005 wherein the court awarded all the properties in the USA
to Leticia. With respect to their properties in the Philippines, Leticiafiled a petition for judicial
separation ofconjugal properties.

At the outset, the trial court erred in recognizing the divorce decree which severed the bond of
marriage between the parties. In Corpuz v. Sto. Tomas,  we stated that:
13

The starting point in any recognition of a foreign divorce judgment is the acknowledgment that
our courts do not take judicial notice of foreign judgments and laws. Justice Herrera explained
that, as a rule, "no sovereign is bound to give effect within its dominion to a judgment rendered
by a tribunal of another country." This means that the foreign judgment and its authenticity must
beproven as facts under our rules on evidence, together with the alien’s applicable national law
to show the effect of the judgment on the alien himself or herself. The recognition may be made
in an action instituted specifically for the purpose or in another action where a party invokes the
foreign decree as an integral aspect of his claim or defense. 14

The requirements of presenting the foreign divorce decree and the national law of the foreigner
must comply with our Rules of Evidence. Specifically, for Philippine courts to recognize a foreign
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 Rule 132, Sections 24 and 25, in relation to Rule 39,
Section 48(b) of the Rules of Court. 15

Under Section 24 of Rule 132, the record of public documents of a sovereign authority or tribunal
may be proved by: (1) an official publication thereof or (2) a copy attested by the officer having
the legal custody thereof. Such official publication or copy must beaccompanied, if the record is
not kept in the Philippines, with a certificate that the attesting officer has the legal custody
thereof. The certificate may be issued by any of the authorized Philippine embassy or consular
officials stationed in the foreign country in which the record is kept, and authenticated by the seal
of his office. The attestation must state, in substance, that the copy is a correct copy of the
original, or a specific part thereof, asthe case may be, and must be under the official seal of the
attesting officer.

Section 25 of the same Rule states that whenever a copy of a document or record is attested for
the purpose of evidence, the attestation must state, in substance, that the copy is a correct copy
of the original, or a specific part thereof, as the case may be. The attestation must be under the
official seal of the attesting officer, if there be any, or if hebe the clerk of a court having a seal,
under the seal of such court.

Based on the records, only the divorce decree was presented in evidence. The required
certificates to prove its authenticity, as well as the pertinent California law on divorce were not
presented.

It may be noted that in Bayot v. Court of Appeals,  we relaxed the requirement on certification
16

where we held that "[petitioner therein] was clearly an American citizenwhen she secured the
divorce and that divorce is recognized and allowed in any of the States of the Union, the
presentation of a copy of foreign divorce decree duly authenticatedby the foreign court issuing
said decree is, as here, sufficient." In this case however, it appears that there is no seal from the
office where the divorce decree was obtained.

Even if we apply the doctrine of processual presumption  as the lower courts did with respect to
17

the property regime of the parties, the recognition of divorce is entirely a different matter
because, to begin with, divorce is not recognized between Filipino citizens in the Philippines.
Absent a valid recognition of the divorce decree, it follows that the parties are still legally married
in the Philippines. The trial court thus erred in proceeding directly to liquidation.

As a general rule, any modification in the marriage settlements must be made before the
celebration of marriage. An exception to this rule is allowed provided that the modification
isjudicially approved and refers only to the instances provided in Articles 66,67, 128, 135 and 136
of the Family Code. 18

Leticia anchored the filing of the instant petition for judicial separation of property on paragraphs
4 and 6 of Article 135 of the Family Code, to wit:

Art. 135. Any of the following shall be considered sufficient cause for judicial separation of
property:

(1) That the spouse of the petitioner has been sentenced to a penalty which carries with it
civil interdiction;

(2) That the spouse of the petitioner has been judicially declared an absentee;

(3) That loss of parental authority ofthe spouse of petitioner has been decreed by the
court;

(4) That the spouse of the petitioner has abandoned the latter or failed to comply with his
or her obligations to the family as provided for in Article 101;

(5) That the spouse granted the power of administration in the marriage settlements has
abused that power; and

(6) That at the time of the petition, the spouses have been separated in fact for at least
one year and reconciliation is highly improbable.
In the cases provided for in Numbers (1), (2), and (3), the presentation of the final judgment
against the guiltyor absent spouse shall be enough basis for the grant of the decree ofjudicial
separation of property. (Emphasis supplied).

The trial court had categorically ruled that there was no abandonment in this case to necessitate
judicial separation of properties under paragraph 4 of Article 135 of the Family Code. The trial
court ratiocinated:

Moreover, abandonment, under Article 101 of the Family Code quoted above, must be for a valid
cause and the spouse is deemed to have abandoned the other when he/she has left the conjugal
dwelling without intention of returning. The intention of not returning is prima facie presumed if
the allegedly [sic] abandoning spouse failed to give any information as to his or her whereabouts
within the period of three months from such abandonment.

In the instant case, the petitioner knows that the respondent has returned to and stayed at his
hometown in Maria Aurora, Philippines, as she even went several times to visit him there after
the alleged abandonment. Also, the respondent has been going back to the USA to visit her and
their children until the relations between them worsened. The last visit of said respondent was in
October 2004 when he and the petitioner discussed the filing by the latter of a petition for
dissolution of marriage with the California court. Such turn for the worse of their relationship and
the filing of the saidpetition can also be considered as valid causes for the respondent to stay in
the Philippines.19

Separation in fact for one year as a ground to grant a judicial separation of property was not
tackled in the trial court’s decision because, the trial court erroneously treated the petition as
liquidation of the absolute community of properties.

The records of this case are replete with evidence that Leticia and David had indeed separated
for more than a year and that 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 back to the Philippines to set up his own business. Second, Leticia
heard from her friends that David has been cohabiting with Estrellita Martinez, who represented
herself as Estrellita Noveras. Editha Apolonio, who worked in the hospital where David was once
confined, testified that she saw the name of Estrellita listed as the wife of David in the Consent
for Operation form.  Third and more significantly, they had filed for divorce and it was granted by
20

the California court in June 2005.

Having established that Leticia and David had actually separated for at least one year, the
petition for judicial separation of absolute community of property should be granted.

The grant of the judicial separation of the absolute community property automatically dissolves
the absolute community regime, as stated in the 4th paragraph of Article 99 ofthe Family Code,
thus:

Art. 99. The absolute community terminates:

(1) Upon the death of either spouse;

(2) When there is a decree of legal separation;

(3) When the marriage is annulled or declared void; or

(4) In case of judicial separation of property during the marriage under Articles 134 to
138. (Emphasis supplied).
Under Article 102 of the same Code, liquidation follows the dissolution of the absolute community
regime and the following procedure should apply:

Art. 102. Upon dissolution of the absolute community regime, the following procedure shall apply:

(1) An inventory shall be prepared, listing separately all the properties of the absolute
community and the exclusive properties of each spouse.

(2) The debts and obligations of the absolute community shall be paid out of its assets. In
case of insufficiency of said assets, the spouses shall be solidarily liable for the unpaid
balance with their separate properties in accordance with the provisions of the second
paragraph of Article 94.

(3) Whatever remains of the exclusive properties of the spouses shall thereafter be
delivered to each of them.

(4) The net remainder of the properties of the absolute community shall constitute its net
assets, 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 of such share provided in this Code. For purposes of computing
the net profits subject to forfeiture in accordance with Articles 43, No. (2) and 63, No.
(2),the said profits shall be the increase in value between the market value of the
community property at the time of the celebration of the marriage and the market value at
the time of its dissolution.

(5) The presumptive legitimes of the common children shall be delivered upon partition,
in accordance with Article 51.

(6) Unless otherwise agreed upon by the parties, in the partition of the properties, the
conjugal dwelling and the lot on which it is situated shall be adjudicated tothe spouse with
whom the majority of the common children choose to remain. Children below the age of
seven years are deemed to have chosen the mother, unless the court has decided
otherwise. In case there is no such majority, the court shall decide, taking into
consideration the best interests of said children. 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 Court of Appeals on the trial court’s Decision with respect to liquidation.

We agree with the appellate court that the Philippine courts did not acquire jurisdiction over the
California properties of David and Leticia. Indeed, Article 16 of the Civil Code clearly states that
real property as well as personal property is subject to the law of the country where it is situated.
Thus, liquidation shall only be limited to the Philippine properties.

We affirm the modification madeby the Court of Appeals with respect to the share of the spouses
in the absolutecommunity properties in the Philippines, as well as the payment of their children’s
presumptive legitimes, which the appellate court explained in this wise:

Leticia and David shall likewise have an equal share in the proceeds of the Sampaloc
property.  While both claimed to have contributed to the redemption of the Noveras property,
1âwphi1

absent a clear showing where their contributions came from, the same is presumed to have
come from the community property. Thus, Leticia is not entitled to reimbursement of half of the
redemption money.

David's allegation that he used part of the proceeds from the sale of the Sampaloc property for
the benefit of the absolute community cannot be given full credence. Only the amount of
₱120,000.00 incurred in going to and from the U.S.A. may be charged thereto. Election
 expenses in the amount of ₱300,000.00 when he ran as municipal councilor cannot be allowed
in the absence of receipts or at least the Statement of Contributions and Expenditures required
under Section 14 of Republic Act No. 7166 duly received by the Commission on Elections.
Likewise, expenses incurred to settle the criminal case of his personal driver is not deductible as
the same had not benefited the family. In sum, Leticia and David shall share equally in the
proceeds of the sale net of the amount of ₱120,000.00 or in the respective amounts of
₱1,040,000.00.

xxxx

Under the first paragraph of Article 888 of the Civil Code, "(t)he legitime of legitimate children and
descendants consists of one-half or the hereditary estate of the father and of the mother." The
children arc therefore entitled to half of the share of each spouse in the net assets of the absolute
community, which shall be annotated on the titles/documents covering the same, as well as to
their respective shares in the net proceeds from the sale of the Sampaloc property including the
receivables from Sps. Paringit in the amount of ₱410,000.00. Consequently, David and Leticia
should each pay them the amount of ₱520,000.00 as their presumptive legitimes therefrom. 21

WHEREFORE, the petition is DENIED. The assailed Decision of the Court of Appeals in CA G.R.
CV No. 88686 is AFFIRMED.

F. Property Regime of Unions Without Marriage; 147-148

Agapay vs Palang, GR No. 116668, 28 July 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 CA-G.R. CV No.
24199 entitled "Erlinda Agapay v. Carlina (Cornelia) Palang and Herminia P. Dela Cruz" dated
June 22, 1994 involving the ownership of two parcels of land acquired during the cohabitation of
petitioner and private respondent's legitimate spouse.

Miguel Palang contracted his first marriage on July 16, 1949 when he took private respondent
Carlina (or Cornelia) Vallesterol as a wife at the Pozorrubio Roman Catholic Church in
Pangasinan. A few months after the wedding, in October 1949, he left to work in Hawaii. Miguel
and Carlina's only child, Herminia Palang, was born on May 12, 1950.

Miguel returned in 1954 for a year. His next visit to the Philippines was in 1964 and during the
entire duration of his year-long sojourn he stayed in Zambales with his brother, not in
Pangasinan with his wife and child. The trial court found evidence that as early as 1957, Miguel
had attempted to divorce Carlina in Hawaii.  When he returned for good in 1972, he refused to
1

live with private respondents, but stayed alone in a house in Pozorrubio, Pangasinan.

On July 15, 1973, the then sixty-three-year-old Miguel contracted his second marriage with
nineteen-year-old Erlinda Agapay, herein petitioner.  Two months earlier, on May 17, 1973,
2

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.  The parties therein agreed to
3

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.  Two years later, on February 15, 1981, Miguel died.
5

On July 11, 1981, Carlina Palang and her daughter Herminia Palang de la Cruz, herein private
respondents, instituted the case at bar, an action for recovery of ownership and possession with
damages against petitioner before the Regional Trial Court in Urdaneta, Pangasinan (Civil Case
No. U-4265). Private respondents sought to get back the riceland and the house and lot both
located at Binalonan, Pangasinan allegedly purchased by Miguel during his cohabitation with
petitioner.

Petitioner, as defendant below, contended that while the riceland covered by TCT No. 101736 is
registered in their names (Miguel and Erlinda), she had already given her half of the property to
their son Kristopher Palang. She added that the house and lot covered by TCT No. 143120 is her
sole property, having bought the same with her own money. Erlinda added that Carlina is
precluded from claiming aforesaid properties since the latter had already donated their conjugal
estate to Herminia.

After trial on the merits, the lower court rendered its decision on June 30, 1989 dismissing the
complaint after declaring that there was little evidence to prove that the subject properties
pertained to the conjugal property of Carlina and Miguel Palang. The lower court went on to
provide for the intestate shares of the parties, particularly of Kristopher Palang, Miguel's
illegitimate son. The dispositive portion of the decision reads.

WHEREFORE, premises considered, judgment is hereby

rendered —

1) Dismissing the complaint, with costs against plaintiffs;

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

3) Confirming the ownership of one-half (1/2) portion of that piece of agricultural land
situated at Balisa, San Felipe, Binalonan, Pangasinan, consisting of 10,080 square
meters and as evidenced by TCT No. 101736, Lot 1123-A to Erlinda Agapay;

4. Adjudicating to Kristopher Palang as his inheritance from his deceased father, Miguel
Palang, the one-half (1/2) of the agricultural land situated at Balisa, San Felipe,
Binalonan, Pangasinan, under TCT No. 101736 in the name of Miguel Palang, provided
that the former (Kristopher) executes, within 15 days after this decision becomes final
and executory, a quit-claim forever renouncing any claims to annul/reduce the donation
to Herminia Palang de la Cruz of all conjugal properties of her parents, Miguel Palang
and Carlina Vallesterol Palang, dated October 30, 1975, otherwise, the estate of
deceased Miguel Palang will have to be settled in another separate action;
 5) No pronouncement as to damages and attorney's fees.

SO ORDERED. 6

On appeal, respondent court reversed the trial court's decision. The Court of Appeals rendered
its decision on July 22, 1994 with the following dispositive portion;

WHEREFORE, PREMISES CONSIDERED, the appealed decision in hereby

REVERSED and another one entered:

1. Declaring plaintiffs-appellants the owners of the properties in question;

2. Ordering defendant-appellee to vacate and deliver the properties in question to herein

plaintiffs-appellants;

3. Ordering the Register of Deeds of Pangasinan to cancel Transfer Certificate of Title

Nos. 143120 and 101736 and to issue in lieu thereof another certificate of title in the
name of plaintiffs-appellants.

No pronouncement as to costs. 7

Hence, this petition.

Petitioner claims that the Court of Appeals erred in not sustaining the validity of two deeds of
absolute sale covering the riceland and the house and lot, the first in favor of Miguel Palang and
Erlinda Agapay and the second, in favor of Erlinda Agapay alone. Second, petitioner contends
that respondent appellate court erred in not declaring Kristopher A. Palang as Miguel Palang's
illegitimate son and thus entitled to inherit from Miguel's estate. Third, respondent court erred,
according to petitioner, "in not finding that there is sufficient pleading and evidence that
Kristopher A. Palang or Christopher A. Palang should be considered as party-defendant in Civil
Case No. U-4625 before the trial court and in CA-G.R. No. 24199. 8

After studying the merits of the instant case, as well as the pertinent provisions of law and
jurisprudence, the Court denies the petition and affirms the questioned decision of the Court of
Appeals.

The first and principal issue is the ownership of the two pieces of property subject of this action.
Petitioner assails the validity of the deeds of conveyance over the same parcels of land. There is
no dispute that the transfer of ownership from the original owners of the riceland and the house
and lot, Corazon Ilomin and the spouses Cespedes, respectively, were valid.

The sale of the riceland on May 17, 1973, was made in favor of Miguel and Erlinda. The
provision of law applicable here is Article 148 of the Family Code providing for cases of
cohabitation when a man and a woman who are not capacitated to marry each other live
exclusively with each other as husband and wife without the benefit of marriage or under a void
marriage. While Miguel and Erlinda contracted marriage on July 15, 1973, said union was
patently void because the earlier marriage of Miguel and Carlina was still subsisting and
unaffected by the latter's de facto separation.

Under Article 148, only the properties acquired by both of the parties through their actual joint
contribution of money, property or industry shall be owned by them in common in proportion to
their respective contributions. It must be stressed that actual contribution is required by this
provision, in contrast to Article 147 which states that efforts in the care and maintenance of the
family and household, are regarded as contributions to the acquisition of common property by
one who has no salary or income or work or industry. If the actual contribution of the party is not
proved, there will be no co-ownership and no presumption of equal shares. 9

In the case at bar, Erlinda tried to establish by her testimony that she is engaged in the business
of buy and sell and had a sari-sari store  but failed to persuade us that she actually contributed
10

money to buy the subject riceland. Worth noting is the fact that on the date of conveyance, May
17, 1973, petitioner was only around twenty years of age and Miguel Palang was already sixty-
four and a pensioner of the U.S. Government. Considering her youthfulness, it is unrealistic to
conclude that in 1973 she contributed P3,750.00 as her share in the purchase price of subject
property,  there being no proof of the same.
11

Petitioner now claims that the riceland was bought two months before Miguel and Erlinda actually
cohabited. In the nature of an afterthought, said added assertion was intended to exclude their
case from the operation of Article 148 of the Family Code. Proof of the precise date when they
commenced their adulterous cohabitation not having been adduced, we cannot state definitively
that the riceland was purchased even before they started living together. In any case, even
assuming that the subject property was bought before cohabitation, the rules of co-ownership
would still apply and proof of actual contribution would still be essential.

Since petitioner failed to prove that she contributed money to the purchase price of the riceland
in Binalonan, Pangasinan, we find no basis to justify her co-ownership with Miguel over the
same. Consequently, the riceland should, as correctly held by the Court of Appeals, revert to the
conjugal partnership property of the deceased Miguel and private respondent Carlina Palang.

Furthermore, it is immaterial that Miguel and Carlina previously agreed to donate their conjugal
property in favor of their daughter Herminia in 1975. The trial court erred in holding that the
decision adopting their compromise agreement "in effect partakes the nature of judicial
confirmation of the separation of property between spouses and the termination of the conjugal
partnership."  Separation of property between spouses during the marriage shall not take place
12

except by judicial order or without judicial conferment when there is an express stipulation in the
marriage settlements.  The judgment which resulted from the parties' compromise was not
13

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,  for otherwise, the condition of those who incurred guilt would turn out
15

to be better than those in legal union.16

The second issue concerning Kristopher Palang's status and claim as an illegitimate son and heir
to Miguel's estate is here resolved in favor of respondent court's correct assessment that the trial
court erred in making pronouncements regarding Kristopher's heirship and filiation "inasmuch as
questions as to who are the heirs of the decedent, proof of filiation of illegitimate children and the
determination of the estate of the latter and claims thereto should be ventilated in the proper
probate court or in a special proceeding instituted for the purpose and cannot be adjudicated in
the instant ordinary civil action which is for recovery of ownership and possession." 17
 As regards the third issue, petitioner contends that Kristopher Palang should be considered as
party-defendant in the case at bar following the trial court's decision which expressly found that
Kristopher had not been impleaded as party defendant but theorized that he had submitted to the
court's jurisdiction through his mother/guardian ad litem.  The trial court erred gravely.
18

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.  Petitioner's grave error has been
19

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.

Carino vs Carino, supra

Valdes vs RTC, supra
Salas, Jr. v. Aguila, GR No. 202370, 23 Sept 2013

JUAN SEVILLA SALAS, JR., Petitioner,

vs.
EDEN VILLENA AGUILA, Respondent.

DECISION

CARPIO, J.:

The Case

This petition for review on certiorari 1 assails the 16 March 2012 Decision2 and the 28 June 2012
Resolution3 of the Court of Appeals (CA) in CA-G.R. CV No. 95322. The CA affirmed the 26
September 2008 Order4 of the Regional Trial Court of Nasugbu, Batangas, Branch 14 (RTC), in
Civil Case No. 787.

The Facts

On 7 September 1985, petitioner Juan Sevilla Salas, Jr. (Salas) and respondent Eden Villena
Aguila (Aguila) were married. On 7 June 1986, Aguila gave birth to their daughter, Joan Jiselle.
Five months later, Salas left their conjugal dwelling. Since then, he no longer communicated with
Aguila or their daughter.

On 7 October 2003, Aguila filed a Petition for Declaration of Nullity of Marriage (petition) citing
psychological incapacity under Article 36 of the Family Code. The petition states that they "have
no conjugal properties whatsoever."5 In the Return of Summons dated 13 October 2003, the
sheriff narrated that Salas instructed his mother Luisa Salas to receive the copy of summons and
the petition.6

On 7 May 2007, the RTC rendered a Decision7 declaring the nullity of the marriage of Salas and
Aguila (RTC Decision). The RTC Decision further provides for the "dissolution of their conjugal
partnership of gains, if any."8

On 10 September 2007, Aguila filed a Manifestation and Motion 9 stating that she discovered: (a)
two 200-square-meter parcels of land with improvements located in San Bartolome, Quezon City,
covered by Transfer Certificate of Title (TCT) No. N-259299-A and TCT No. N-255497; and (b) a
108-square-meter parcel of land with improvement located in Tondo, Manila, covered by TCT
No. 243373 (collectively, "Discovered Properties"). The registered owner of the Discovered
Properties is "Juan S.Salas, married to Rubina C. Salas." The manifestation was set for hearing
on 21 September 2007. However, Salas’ notice of hearing was returned unserved with the
remark, "RTS Refused To Receive."

On 19 September 2007, Salas filed a Manifestation with Entry of Appearance 10 requesting for an
Entry of Judgment of the RTC Decision since no motion for reconsideration or appeal was filed
and no conjugal property was involved.

On 21 September 2007, the hearing for Aguila’s manifestation ensued, with Aguila, her counsel
and the state prosecutor present. During the hearing, Aguila testified that on 17 April 2007
someone informed her of the existence of the Discovered Properties. Thereafter, she verified the
information and secured copies of TCTs of the Discovered Properties. When asked to clarify,
Aguila testified that Rubina C. Salas (Rubina) is Salas’ common-law wife. 11

On 8 February 2008, Salas filed an Opposition to the Manifestation 12 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 through palpable mistake. Salas claimed
that Aguila waived her right to the Discovered Properties. Salas likewise enumerated properties
he allegedly waived in favor of Aguila, to wit:(1) parcels of land with improvements located in
Sugar Landing Subdivision, Alangilan, Batangas City; No. 176 Brias Street, Nasugbu, Batangas;
P. Samaniego Street, Silangan, Nasugbu, Batangas; and Batangas City, financed by Filinvest;
(2) cash amounting to ₱200,000.00; and (3) motor vehicles, specifically Honda City and Toyota
Tamaraw FX(collectively, "Waived Properties"). Thus, Salas contended that the conjugal
properties were deemed partitioned.

The Ruling of the Regional Trial Court

In its 26 September 2008 Order, the RTC ruled in favor of Aguila. The dispositive portion of the
Order reads:

WHEREFORE, foregoing premises being considered, the petitioner and the respondent are
hereby directed to partition between themselves by proper instruments of conveyance, the
following properties, without prejudice to the legitime of their legitimate child, Joan Jisselle Aguila
Salas:

(1) A parcel of land registered in the name of Juan S. Salas married to Rubina C. Salas
located in San Bartolome, Quezon City and covered by TCT No. N-259299-A marked as
Exhibit "A" and its improvements;

(2) A parcel of land registered in the name of Juan S.Salas married to Rubina C. Salas
located in San Bartolome, Quezon City and covered by TCT No. N-255497 marked as
Exhibit "B" and its improvements;

(3) A parcel of land registered in the name of Juan S.Salas married to Rubina Cortez
Salas located in Tondo and covered by TCT No. 243373-Ind. marked as Exhibit "D" and
its improvements.

Thereafter, the Court shall confirm the partition so agreed upon bythe parties, and such partition,
together with the Order of the Court confirming the same, shall be recorded in the Registry of
Deeds of the place in which the property is situated.

SO ORDERED.13
The RTC held that pursuant to the Rules,14 even upon entry of judgment granting the annulment
of marriage, the court can proceed with the liquidation, partition and distribution of the conjugal
partnership of gains if it has not been judicially adjudicated upon, as in this case. The RTC found
that the Discovered Properties are among the conjugal properties to be partitioned and
distributed between Salas and Aguila. However, the RTC held that Salas failed to prove the
existence of the Waived Properties.

On 11 November 2008, Rubina filed a Complaint-in-Intervention, claiming that: (1) she is Rubina
Cortez, a widow and unmarried to Salas; (2) the Discovered Properties are her paraphernal
properties; (3) Salas did not contribute money to purchase the Discovered Properties as he had
no permanent job in Japan; (4) the RTC did not acquire jurisdiction over her as she was not a
party in the case; and (5) she authorized her brother to purchase the Discovered Properties but
because he was not well-versed with legal documentation, he registered the properties in the
name of "Juan S. Salas, married to Rubina C. Salas."

In its 16 December 2009 Order, the RTC denied the Motion for Reconsideration filed by Salas.
The RTC found that Salas failed to prove his allegation that Aguila transferred the Waived
Properties to third persons. The RTC emphasized that it cannot go beyond the TCTs, which state
that Salas is the registered owner of the Discovered Properties. The RTC further held that Salas
and Rubina were at fault for failing to correct the TCTs, if they were not married as they claimed.

Hence, Salas filed an appeal with the CA.

The Ruling of the Court of Appeals

On 16 March 2012, the CA affirmed the order of the RTC.15 The CA ruled that 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 Reconsideration 17 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. N-259299-A and N-255497 in Quezon City
and as well as the property in Manila covered by TCT No. 243373 between petitioner and
respondent.

2. The Court of Appeals erred in affirming the trial 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 co-ownership. 19 Thus,
the settlement of the issue of ownership is the first stage in this action. 20

Basic is the rule that the party making an allegation in a civil case has the burden of proving it by
a preponderance of evidence.21 Salas alleged that contrary to 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. T-65876 – a parcel of land located at Poblacion, Nasugbu, Batangas,
registered in the name of Eden A. Salas, married to Juan Salas Jr. which is cancelled by
TCT No. T-105443 in the name of Joan Jiselle A. Salas, single;

(2) TCT No. T-68066 – a parcel of land situated in the Barrio of Landing, Nasugbu,
Batangas, registered in the name of Eden A. Salas, married to Juan S. Salas Jr.

Moreover, [Aguila] submitted original copy of Certification issued by Ms. Erlinda A. Dasal,
Municipal Assessor of Nasugbu, Batangas, certifying that [Aguila] has no real property (land and
improvement) listed in the Assessment Roll for taxation purposes, as of September 17, 2008.

Such evidence, in the absence of proof to the contrary, has the presumption of regularity. x x x.

Suffice it to say that such real properties are existing and registered in the name of [Aguila],
certified true copies thereof should have been the ones submitted to this Court. Moreover, there
is also a presumption that properties registered in the Registry of Deeds are also declared in the
Assessment Roll for taxation purposes.22

On the other hand, Aguila proved that the Discovered Properties were acquired by Salas during
their marriage.  Both the RTC and the CA agreed that the Discovered Properties registered in
1âwphi1

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 co-ownership.

In the absence of proof to the contrary, properties acquired while they lived together shall be
presumed to have been obtained by their joint efforts, work or industry, and shall be owned by
them in equal shares. For purposes of this Article, a party who did not participate in the
acquisition by the other party of any property shall be deemed to have contributed jointly in the
acquisition thereof if the 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. (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 co-ownership and not on the
regime of conjugal partnership of gains.

WHEREFORE, we DENY the petition. We AFFIRM the Decision dated 16 March 2012 and the
Resolution dated 28 June 2012 of the Court of Appeals in CA-G.R. CV No. 95322.

Ventura, Jr. v Spouses Abuda, GR No. 202932, 23 Oct 2013

EDILBERTO U. VENTURA JR., Petitioner,

vs.
SPOUSES PAULINO and EVANGELINE ABUDA, Respondents.

DECISION
CARPIO, J.:

The Case

This petition for review on certiorari seeks to annul the Decision 1 dated 9 March 2012 of the
Court of Appeals (CA) in CA-G.R. CV No. 92330 and the Resolution 2 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 Decision 3 dated 24 November 2008 of the
Regional Trial Court of Manila, Branch 32 (RTC-Manila).

The Facts

The RTC-Manila and the CA found the facts to be as follows:

Socorro Torres (Socorro) and Esteban Abletes (Esteban) were married on 9 June 1980.
Although Socorro and Esteban never had common children, both of them had children from prior
marriages: Esteban had a daughter named Evangeline Abuda (Evangeline), and Socorro had a
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 operated small business
establishments located at 903 and 905 Delpan Street, Tondo, Manila (Delpan property). 6

On 6 September 1997, Esteban sold the Vitas and Delpan properties to Evangeline and her
husband, Paulino Abuda (Paulino).7 According to Edilberto:

when Esteban was diagnosed with colon cancer sometime in 1993, he decided to sell the Delpan
and Vitas properties to Evangeline. Evangeline continued paying the amortizations on the two (2)
properties situated in Delpan Street. The amortizations, together with the amount of Two
Hundred Thousand Pesos (Php 200,000.00), which Esteban requested as advance payment,
were considered part of the purchase price of the Delpan properties. Evangeline likewise gave
her father Fifty Thousand Pesos (Php 50,000.00) for the purchase of the Vitas properties and
she shouldered his medical expenses.8

Esteban passed away on 11 September 1997, while Socorro passed away on 31 July 1999.

Sometime in 2000, Leonora Urquila (Leonora), the mother of Edilberto, discovered the sale.
Thus, Edilberto, represented by Leonora, filed a Petition for Annulment of Deeds of Sale before
the RTC-Manila. Edilberto alleged that the sale of the properties was fraudulent because
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 RTC-Manila

The RTC-Manila dismissed the petition for lack of merit.

The RTC-Manila ruled that the marriage between Socorro and Esteban was void from the
beginning.10 Article 83 of the Civil Code, which was the governing law at the time Esteban and
Socorro were married, provides:

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 daughter-in-law Conchita Ventura
(Conchita). In her first affidavit, Conchita claimed that Crispin, who was a seaman, had been
missing and unheard from for 35 years. However, Conchita recanted her earlier testimony and
executed an Affidavit of Retraction. 11

The RTC-Manila ruled that the lack of a judicial decree of nullity does not affect the status of the
union. It applied our ruling in 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
non-existent by the courts.13

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

Art. 144. When a man and a woman live together as husband and wife, but they are not married,
or their marriage is void from the beginning, the property acquired by either or both of them
through their work or industry or their wages and salaries shall be governed by the rules on co-
ownership.

Art. 485. The share of the co-owners, in the benefits as well as in the charges, shall be
proportional to their respective interests. Any stipulation in a contract to the contrary shall be
void.

The portions belonging to the co-owners in the co-ownership shall be presumed equal, unless
the contrary is proved.

The RTC-Manila then determined the respective shares of Socorro and Esteban in the
properties. It found that:
with respect to the property located at 2492 State Alley, Bonifacio St. Vitas, Tondo, Manila
covered by TCT No. 141782, formerly Marcos Road, Magsaysay Village, Tondo, Manila,
[Evangeline] declared that part of it was first acquired by her father Esteban Abletes sometime in
1968 when he purchased the right of Ampiano Caballegan. Then, in 1970, she x x x bought the
right to one-half of the remaining property occupied by Ampiano Caballegan. However, during
the survey of the National Housing Authority, she allowed the whole lot to be registered in her
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 D-9 and D-10. 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 D-9
as shown by the 37 pieces of receipts x x x and the aggregate amount of ₱188,596.09 for Unit D-
10, as evidenced by 36 receipts x x x.15

The RTC-Manila concluded that Socorro did not contribute any funds for the acquisition of the
properties. Hence, she cannot be considered a co-owner, and her heirs cannot claim any rights
over the Vitas and Delpan properties.16

Aggrieved, Edilberto filed an appeal before the CA.

The Ruling of the CA

In its Decision17 dated 9 March 2012, the CA sustained the decision of the RTC-Manila. The
dispositive portion of the CA Decision reads:

WHEREFORE, the Appeal is hereby DENIED and the challenged Decision of the court a quo
STANDS.

SO ORDERED.18

The CA ruled, however, that the RTC-Manila should have applied Article 148 of the Family Code,
and not Articles 144 and 485 of the Civil Code. Article 148 of the Family Code states that in
unions between a man and a woman who are incapacitated to marry each other:

x x x only the properties acquired by both of the parties through their actual joint contribution of
money, property, or industry shall be owned by them in common in proportion to their respective
contributions. In the absence of proof to the contrary, their contributions and corresponding
shares are presumed to be equal. The same rule and presumption shall apply to joint deposits of
money and evidences of credit.

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

The foregoing rules on forfeiture shall likewise apply even if both parties are in bad faith.
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 co-ownership and
equal contribution do not apply.25

This is a reiteration of Article 148 of the Family Code, which the CA applied in the assailed
decision:

Art 148. In cases of cohabitation [wherein the parties are incapacitated to marry each other], only
the properties acquired by both of the parties through their actual joint contribution of money,
property, or industry shall be owned by them in common in proportion to their respective
contributions. In the absence of proof to the contrary, their contributions and corresponding
shares are presumed to be equal. The same rule and presumption shall apply to joint deposits of
money and evidences of credit.

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

The foregoing rules on forfeiture shall likewise apply even if both parties are in bad faith.

Applying the foregoing provision, the Vitas and Delpan properties can be considered common
property if: (1) these were acquired during the cohabitation of Esteban and Socorro; and (2) there
is evidence that the properties were acquired through the parties’ actual joint contribution of
money, property, or industry.

Edilberto argues that the certificate of title covering the Vitas property shows that the parcel of
land is co-owned by Esteban and Socorro because: (1) the Transfer Certificate of Title was
issued on 11 December 1980, or several months after the parties were married; and (2) title to
the land was issued to "Esteban Abletes, of legal age, married to Socorro Torres." 26

We disagree. The title itself shows that the Vitas property is owned by Esteban alone.  The
1âwphi1

phrase "married to Socorro Torres" is merely descriptive of his civil status, and does not show
that Socorro co-owned the property.27 The evidence on record also shows that Esteban acquired
ownership over the Vitas property prior to his marriage to Socorro, even if the certificate of title
was issued after the celebration of the marriage. Registration under the Torrens title system
merely confirms, and does not vest title. This was admitted by Edilberto on page 9 of his petition
wherein he quotes an excerpt of our ruling in Borromeo:

Registration is not a mode of acquiring ownership. It is only a means of confirming the fact of its
existence with notice to the world at large. Certificates of title are not a source of right. The mere
possession of a title does not make one the true owner of the property. Thus, the mere fact that
respondent has the titles of the disputed properties in her name does not necessarily,
conclusively and absolutely make her the owner. The rule on indefeasibility of title likewise does
not apply to respondent. A certificate of title implies that the title is quiet, and that it is perfect,
absolute and indefeasible. However, there are well-defined exceptions to this rule, as when the
transferee is not a holder in good faith and did not acquire the subject properties for a valuable
consideration.

Edilberto claims that Esteban s actual contribution to the purchase of the Delpan property was
not sufficiently proven since Evangeline shouldered some of the amortizations. 28 Thus, the law
presumes that Esteban and Socorro jointly contributed to the acquisition of the Del pan property.

We cannot sustain Edilberto s claim. Both the RTC-Manila and the CA found that the Delpan
property was acquired prior to the marriage of Esteban and Socorro. 29 Furthermore, even if
payment of the purchase price of the Delpan property was made by Evangeline, such payment
was made on behalf of her father. Article 1238 of the Civil Code provides:

Art. 1238. Payment made by a third person who does not intend to be reimbursed by the debtor
is deemed to be a donation, which requires the debtor s consent. But the payment is in any case
valid as to the creditor who has accepted it.

Thus, it is clear that Evangeline paid on behalf of her father, and the parties intended that the
Delpan property would be owned by and registered under the name of Esteban.

During trial, the Abuda spouses presented receipts evidencing payments of the amortizations for
the Delpan property.  On the other hand, Edilberto failed to show any evidence showing Socorro
1âwphi1

s alleged monetary contributions. As correctly pointed out by the CA:

settled is the rule that in civil cases x x x the burden of proof rests upon the party who, as
determined by the pleadings or the nature of the case, asserts the affirmative of an issue. x x x.
Here it is Appellant who is duty bound to prove the allegations in the complaint which
undoubtedly, he miserably failed to do so.30

WHEREFORE, the petition is DENIED. The Decision dated 9 March 2012 of the Court of
Appeals in CA-G.R. CV No. 92330 is AFFIRMED.